The Development Bank of Southern Africa (DBSA) announced yesterday that the Water Reuse Programme (WRP) was approved for $235 million (R4.5 billion) funding by the Green Climate Fund (GCF) at the 36th GCF board meeting.
DBSA said in a statement that the GCF was the world’s largest climate fund dedicated to supporting adaptation and mitigation projects in developing countries.
The WRP will be a national programme to facilitates the preparation, implementation and scaling of water reuse projects in municipalities. Due to its novelty in the sector, its construct is a critical proof point of possible innovative, sustainable, and climate-resilient interventions for water services infrastructure in South Africa.
The approved capital will enable the WRP to coordinate a government-wide response that provides financial resources and builds institutional capacity.
DBSA project preparation group executive Catherine Koffman, said: "A critical focus point for this intervention will be at a municipal level, where climate-induced water insecurity has a debilitating effect on the lives of citizens. The programme expects to directly increase the resilience to climate change of 3.5 million beneficiaries.“
The group said several cities across South Africa faced the threat of the so-called ‘Day Zero’ when water runs out, most notably in Nelson Mandela Bay, in the Eastern Cape, where a severe drought had depleted the region’s dams.
"Observed water scarcity in South Africa is to a large extent attributable to physical causes. These are exacerbated by the impact of global climate change and increasing demand for available water resources," it said.
The WRP will comprise two components. Firstly, the Water Partnerships Office will house a Water Reuse Unit that supports the preparation, financing and implementation of municipal water reuse projects.
"This component is critical in supporting municipalities and (in) some instances water boards, the primary custodians of sewerage effluent reuse opportunities, to identify, prepare, finance and implement water reuse projects at scale.
"The WRP will, amongst other community engagement activities, run a national and regional public awareness and education campaign to ensure the successful scaling and implementation of water reuse projects in South Africa," the DBSA said.
The second component is the development of an alternative funding solution to support the scaled rollout of water reuse projects.
"This new asset class will offer an acceptable financial return in line with ESG impact tracking, simultaneously crowding in private sector funding. As the WRP matures, project bonds will define the asset class, driven to realise better development impact, particularly towards the UN’s Sustainable Development Goals 6, 14 and that speak to safe and clean water and sanitation, sustainable oceans, and the involvement of the private sector in development endeavours," the DBSA added.
Koffman said the reality was that the current water prices did not reflect the availability and cost of supply of water, and as a result the sector was not particularly attractive for private investment in water reuse infrastructure.
"Looking into the future, projections of water demand and supply are, however, showing a supply gap that can be met with private sector participation and investment in water services infrastructure.
"It is encouraging for the proliferation of public infrastructure that water tariffs are steadily trending upwards; but we do need to think several steps ahead and bring in that needed intervention right now, to start working on plugging that future gap whilst at the same time ensuring that affordability for the poor in our society is not compromised. The WRP is a key solution that makes it easier for numerous players to actively participate and ensure a minimum if any, potential water shedding in the future,” she said.
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