Will we see a programmatic approach to water infrastructure? COP27

Thiago Almeida, Divisional Executive-Client Coverage, Nedbank Corporate Investment Banking, weighs in on Water Day at COP27, Sharm El-Sheikh, Egypt.

Excerpts from the interview with Thiago Almeida

Challenges that the water crises poses for South Africa 

It is a mammoth task and a significant issue for South Africa and also the rest of the continent. Every country across the continent has different challenges and some are better prepared and are being more active in resolving the issue. Unfortunately, South Africa has taken a while to wake up to the size of the issue and start doing something about it.

A programmatic approach to water infrastructure 

When we talk about the water sector across the continent, every country is very different and some are more open to private sector participation, others are more prepared. In the South African case, for example, what is very exciting is the work the BBSA says the Department of Water Safety have been doing around the National Water Programme in the Water Partnership Office, which is meant to be held at the BBSA. That is exciting and something the market is talking about quite a lot. Hopefully we are going to see a programmatic approach to water infrastructure and opportunities in this space. The office is likely to be held at the BBSA and it will have strong partnership with municipality and provincial governments to identify a number of bankable and well-developed opportunities.  

Infrastructure and supply challenges in SA 

The problem really is both and you cannot completely split the two apart. Investment in water has to happen from the infrastructure side, all the way down to society; green infrastructure, community level, through education, but also through smaller projects. On the infrastructure side, we definitely have a deficit, a lack of investment that we have had for years in South Africa. The National Water Masterplan, which was published in 2019, identified that South Africa needed about R899 billion of investment over a 10-year period. We have hardly seen that taking place. When the investment has happened, it usually went to projects that have not delivered the required outcome. So, for a year, we are probably missing about R33 billion in investments in this space, which makes it a significant infrastructure problem. We have a significant non-revenue water issue across most municipalities in South Africa, South Africa’s non-revenue water is currently sitting at over 40% and that is water lost through leakage, but also water that doesn’t generate revenue because it is not paid for. That is an infrastructure problem but we can’t ignore the supply issue. South Africa is a largely water scarce country. Seventy-seven percent of its water is surface water. This is about educating the community, removing invasive plant species that are water thirsty.

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