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Underinvested water sector in Africa discussed at AGES: PPPs give private sector access

The session focusing on “Uber Water Resilience” at Africa’s Green Economy Summit in Cape Town this week heard that private-public partnerships (PPPs) are popular for accessing private capital for water projects.

Over 220 million Africans lack secure water due to insufficient investment in resilient infrastructure. Funding is far below the required annual $64 billion, as estimated by the AfDB for water security by 2025. This session focused on actions that are underway to revamp investments, establish climate-resilient water systems, and foster cross-regional collaborations for reliable, affordable water in urban areas.

“Cities rely on water for so many things, from productivity to health issues, to many, many economic sectors,” said the moderator of the panel, Pablo Lazo, Director of Urban Development at the World Resources Institute.

Benefits of PPPs for water projects
Ernest Poku, Executive Director at Africa Water Infrastructure Development Ltd (AWID), based in Dubai has seen the many benefits of developing water projects through PPPs.

“We provide a quarter of the water supply in Kigali. It is a project we built from scratch and that has been operating for two years now and has transformed the water sector there.” They also supply water to a number of hotels in Sharm El-Sheikh in Egypt. Poku said that the private sector is increasingly interested in getting involved in water projects.

Poku explained that performance standards are one of the key advantages of PPPs in water development and raising the standard of water projects.

“In Kigali, we have performance standards which are 10 times higher than the city. We can be penalised, so we are incentivised to perform.” He added that thanks to the improved water quality in that part of the city, people are moving there and property prices are going up.

More pro-active
“Governments need to be more pro-active in structuring programmes that will facilitate PPPs,” was the opinion of Johann Lubbe, Head of the Water Partnerships Office for the DBSA in South Africa.

“We are often sitting back and waiting for projects to come to us. That is what South Africa is doing now with its Water Partnerships Office. We are structuring programmes that are designed to accommodate the private sector.

“Hopefully over time, we will be able to build a stronger pipeline of PPPs in water projects.”

Water is available
On the topic of water security and transboundary collaboration, Cecil Nundwe, Principal Water Resources Management Officer at the AfDB said “there is a huge opportunity to address the water security situation within the region.”

He said that both South Africa and Botswana experience water security challenges. “But if you look at it regionally, extending northwards into Zambia and other countries, water is available, and there is an engineering available for it.” An example of this is the Lesotho-Botswana Water Transfer Project.

“The constraints I see,” Nundwe explained, “is with the transboundary discourse itself. It creates limitations through the basic concept. We really need to rethink some of these theories that we have been applying.

“I don’t see why South Africa shouldn’t confidently seek to access water from the Zambezi. I don’t see why South Africa shouldn’t positively seek to secure hydropower development on the Zambezi River or any other source. It all depends on the right kind of relationship you can have with the countries; on the right kind of benefits you share with the countries, and of course, the distribution of the benefits and burdens of the economic activity.”

Nature-based solutions
“Why is water being underinvested?” asked Kerry Max, Deputy Director Partnering for Climate, International Development Partnerships and Operations, Global Affairs Canada. According to Max it is because both water and climate change adaption are seen as non-income generating.

“Water is seen as a public service. So, it is very hard for private investors outside of the PPP structure to get a line of sight on an income stream.

“That is why I am thumping this nature-based solutions bible in this room right now, because I think if you marry what you do in water with other climate agendas, such as pollution and biodiversity, and you add nature-based solutions into the mix, you end up having revenue streams that might make it far more appealing as an investment.”

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