South Africa seeks new financing models to close water infrastructure gap

South Africa’s water and sanitation sector faces a massive funding shortfall, with an estimated R90 billion needed each year but average annual spending of only R17 billion between 2018 and 2022. Acting Head of Origination at the Development Bank of Southern Africa, Bothwell Manikai, says traditional on‑balance‑sheet financing has reached its limit and calls for innovative instruments such as public‑private partnerships, blended finance structures and credit‑enhancement tools – like the Credit Guarantee Vehicle being developed with the International Finance Corporation – to attract private and institutional investors.

At the Water Institute of South Africa conference, Minister of Water and Sanitation Pemmy Majodina urged stakeholders to adopt new governance, financing and technology approaches, emphasizing climate‑adapted infrastructure, digital solutions, groundwater development and water reuse. She warned that South Africa, one of the world’s driest nations, must treat water as strategic national infrastructure to safeguard agriculture, food production and economic growth, and reminded users to register water use by 23 July to avoid penalties.