South Africa’s ageing water and sanitation systems demand urgent investment, with government turning to the private sector and blended finance to secure R900 billion over the next decade.
SA’s Water Crisis: South Africa is staring down a monumental challenge: a decade-long, R900 billion mission to rescue its deteriorating water and sanitation infrastructure. Minister of Water and Sanitation Pemmy Majodina confirmed the staggering financial need, stressing that costs are likely to rise due to inflation, global market fluctuations, and supply chain volatility.
This projection—R90 billion per year over the next ten years—highlights the urgent need for a coordinated national response to ensure future water security for communities, industries, and agriculture.
Strategies for Securing Funding
Government is actively seeking innovative funding solutions. In a response to a parliamentary question, Majodina revealed that the Department of Water and Sanitation is joining forces with Cooperative Governance and Traditional Affairs (Cogta) and Human Settlements. Their aim: to consolidate grant funds such as the Regional Bulk Infrastructure Grant and Water Services Infrastructure Grant to maximise impact.
But public funding alone won’t cut it. “It is anticipated that the projected costs will rise over time,” Majodina said, citing inflation and volatile global conditions.
The Private Sector Steps In
Recognising fiscal constraints, the state is increasingly tapping into private finance. Majodina highlighted progress in attracting private investors to fund large-scale projects, facilitated through a soon-to-be-established National Water Resource Infrastructure Agency. This entity will be empowered to raise capital from commercial banks and development finance institutions.
In parallel, the Water Partnerships Office, launched in collaboration with the Development Bank of Southern Africa, is guiding municipalities in forming partnerships with private water service providers.
One example of this approach is the Vaal Gamagara Bulk Water Supply Project in the Northern Cape, where mining companies have teamed up with government to jointly fund the development of water systems benefiting both industry and local communities.
National Infrastructure Fund to Drive Momentum
To further entice private investment, the newly launched National Infrastructure Fund (NIF) is rolling out blended financing models, lowering risk for investors while keeping essential projects afloat.
“The country requires an ongoing and sustained mega water infrastructure build programme,” Majodina stated, “but due to fiscal constraints, we cannot rely only on government funding… the private sector has a significant role to play.”
South Africa’s water infrastructure overhaul is no longer optional—it’s a national priority. With bold partnerships and innovative financing models, the government hopes to turn the tide on the water crisis before it’s too late.
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