At least R900 billion needed to fix SA’s water woes

South Africa needs R900 billion over the next decade to fix its ageing water and sanitation systems.

Minister of Water and Sanitation Pemmy Majodina confirmed that the previous projection of R90 billion annually over ten years remains relevant, though costs are expected to rise.

“It is anticipated that the projected costs will rise over time due to factors of increases in terms of, amongst others, inflation, prices of material, global volatility affecting supply chain,” Majodina stated in response to a parliamentary question from DA MP Stephen Moore.

Finding the money for water infrastructure

The government is looking at several ways to find this massive funding.

The Department of Water and Sanitation is working with other departments like Cooperative Governance and Traditional Affairs (Cogta) and Human Settlements to combine their grant funding for greater impact.

These combined resources include the Regional Bulk Infrastructure Grant and Water Services Infrastructure Grant from the water department, along with municipal grants from Cogta.

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Turning to the private sector

With limited government funds available, private investment has become essential.

“Inroads are also being made in leveraging private sector finance to supplement the funding required for many of our water resource infrastructure projects,” Majodina explained.

The government is setting up a National Water Resource Infrastructure Agency to raise private money for large water projects.

This agency will be able to access funding from commercial banks and development finance institutions.

The water department is also creating partnerships with industries and businesses.

“The department has agreements with industries such as the mines. For example, Vaal Gamagara Bulk Water Supply project in the Northern Cape where mines will jointly fund projects providing bulk water to industry and water infrastructure for communities,” the minister said.

She said a Water Partnerships Office has been established with the Development Bank of Southern Africa to help municipalities work with private water providers.

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NIF to the rescue

The recently launched National Infrastructure Fund will help make water projects more attractive to private investors through blended financing arrangements.

“The country requires an ongoing and sustained mega water infrastructure build programme to effectively maintain existing assets and ensure water security in the future,” Majodina concluded.

“However, due to fiscal constraints, we cannot rely only on government funding to develop the required infrastructure, and the private sector has a significant role to play.”

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