Cross-border water and sanitation infrastructure development

More than 100-million people in the SADC region do not have access to safe drinking water and over half of the region’s population do not have access to improved sanitation facilities. These urban statistics exclude the poor living in informal settlements. The need for water and sanitation infrastructure in SADC is dire.

Presently we are dealing with so many water-related issues. “The one question we are all faced with is how we ensure the sustainable use and management of water resources because water is a finite resource,” says Graham Ching’ambu, regional fund manager at Development Bank Southern Africa (DBSA). The sustainability of water resources, both surface and groundwater, is especially acute when we experience the reality of climate change and the need to adapt and mitigate against that in terms of building resilience in the water sector.

Infrastructure needs to be developed, rehabilitated, expanded and climate proofed to be resilient to floods and droughts. The recent outbreak of the Covid-19 virus is a strong reminder of the importance of access to WASH facilities, especially for the poor, to ensure community resilience to adverse outbreaks or effects of climate.

“We also have the challenge that there is very, very limited access to water and sanitation in the world-at-large, the continent and particularly in the southern African region,” adds Ching’ambu. “And, of course, we always have the money issue. How do we sustainably finance all these needs?”

This is essentially what the SADC Water Fund seeks to respond to. In 2012, the SADC member countries established the SADC Water Fund as a regional development financing facility with the mandate of strengthening the coordinating function of SADC by funding projects to improve regional water and sanitation infrastructure and to facilitate information and knowledge sharing.

The Fund’s development objectives include climate resilience as well as the application of integrated water resources management principles for infrastructure developments in the SADC region.

Addressing such a colossal need presents both a challenge and opportunity for innovation in infrastructure technological approaches, financing and implementation models anchored on enabling policies and market structures within the region.

The SADC Water Fund Secretariat was mandated to ensure its operationalisation and it selected DBSA as an existing and reputable development finance institution to house the funds and to ensure its operation. This allows the Fund to leverage the bank’s institutional capacities and promote synergies with DBSA’s other activities. The DBSA also co-funds projects. The Funds’ seed financing of €15-million is a grant provided by Kreditanstalt für Wiederaufbau (KfW).

The Fund has three programmes that have a nexus approach with the following strategic priorities:

Cross-border WASH. To improve water and sanitation transboundary infrastructure along major trade corridors in the region, which is vital in promoting regional integration and addressing rapid urbanisation due to cross-border trade and traffic volumes.

Regional water utilities innovation resilience. To source and invest in pilot projects (locally-relevant innovative technology, financing and governance models) for a resilient water sector in major cities in transboundary catchments.

Transboundary water information system. To support transboundary hydrological and metrological data collection as well as the development of information for sustainable infrastructure, risk preparedness and climate adaptation.

The SADC Water Fund exists to capitalise partner funds and coordinate sector financing. It selects bankable project proposals (quality feasibility studies must be available), provides support to them in finalising project documentation and raises funds from development partners. The Fund facilitates, monitors and evaluates cross-border coordination during project preparation, implementation and post-implementation.

“Essentially, once we pull the money and resources together, we ensure that the Fund is appropriately invested in the priority projects in such a way that there is protection and promotion of the low-income communities, so that the heart of DBSA’s shared prosperity becomes a reality within the region,” says Ching’ambu.

TRANSBOUNDARY PROJECTS

Money is not the only difficulty when dealing with transboundary infrastructure. The policy and regulatory environment within the water sector is a challenge and so is preparing the right project.

“You could have the money, but if the project is not well prepared, there is a hindrance in terms of being able to move to implementation. We need to consider the right financing instrument that is appropriate for a project. There is no one-size-fits-all approach. We need to deal with each specific case separately. But, most important, is to ensure that we can implement these projects. This is a key passion for the bank,” he adds.

Mamarinyana Ratsaka, Head of Programme Management Services in the Infrastructure Delivery Division at DBSA, says that one of the lessons learnt about the fund is that implementing cross-border water projects is not an easy process. “The other big lesson that we have learnt is with the identification of projects. We have found that a lot of projects are not properly prepared.”

The DBSA provides transparent fiduciary management and assurance to stakeholders. “You must plan practically and in a structured way. This preparation gap, as Ratsaka highlights, has been of the most difficult challenges to overcome and hence our model is now to invite all partners around the table so that we can overcome this hurdle,” explains Ratsaka.

In a collaborative way, internally and with other external partners, the DBSA ensures projects are suitably prepared with appropriate investment. The bank has a rolling investment portfolio of prioritised projects in the region that it invests towards and can break the silos that exist between preparation and investments.

Ching’ambu says that many delivery hurdles exist. “Foremost are the institutional mechanisms, especially from a regional perspective. How do you bring the many stakeholders together in a mechanism that is institutionalised and that will drive the process forward? This is the gap that DBSA bridges. We can bring together multiple countries and have an institutionalised approach to collaboration for ventures, which allows for optimised investment.”

“The development impact and the shared prosperity only becomes a reality when there is actual implementation of the project,” he adds. The DBSA has a growth and financing sustainability strategy anchored on the diversification of portfolio, products (funding instruments) and partnerships. “If we have a portfolio that we roll and build into a solid pipeline, then we have a pipeline towards which we can structure appropriate financing products and in collaboration with partners, we are able to make maximum regional impact.”

INNOVATIVE INTEGRATION

“The Fund is a key financing facility within SADC’s vision of establishing a regional development fund, which is the instrument to promote socioeconomic development and integration within the area. We have this proper, strong focus added to our focus on safeguarding integrated water resource management for infrastructure development and therefore, we have espoused a thematic approach within the three broad cluster areas to make sure that we endorse regional innovation for resilience as well as to ensure that we have climate resilience systems in transboundary water information systems,” says Ching’ambu.

The DBSA works with the private sector in terms of delivering service in the implementation of the projects and those engaged in international competitive bidding processes. The bank is looking at innovating and is essentially looking to develop new delivery models that open the space for the private sector.

SUSTAINABILITY

Sustainability is one of the investment principles of the Fund, so the DBSA gauges the environmental, social and governance (ESG) aspects of the projects that it is involved in. In terms of sustainability, the bank looks for projects that will be well-managed post implementation and that will reap the intended benefits. The project sponsor’s capacity to sustain and maintain the operations and safeguard that investment for the people is considered. The development impact of a project is also regarded.

For example, the DBSA is currently working on a project in Kazungula, Zambia for the supply of water and sanitation infrastructure. The Kazungula Water Supply and Basic Sanitation Project has had its water treatment plant and water supply system as well as its storage reservoir and distribution networks upgraded. Kazungula is soon to be an upcoming town with a newly constructed Kazungula

Bridge that has seen an increase in trade volumes there. So, you see the regional multiplier potential of establishing a proper water supply service in a town like that because people from all around the region are trading. There is also growth in terms of industries and other activities in the area.

Another ongoing project is the Lomahasha Namaacha (LoNa) Water Supply Project where a bulk transmission line and distribution network is being constructed from the Simunye Water Treatment Plant in Eswatini to Namaacha town in Mozambique. Booster stations will provide rural offtakes for the communities along the way. A pumping main is being installed to Lomahasha and Namaacha Reservoirs. The Kazungula and LoNa projects should be completed in 2024 and in the first half of 2025 respectively.

Ching’ambu concludes that the SADC Water Fund has around €50-million and an active working pipeline of over €100-million of projects that it is looking to develop and see implemented within

the region itself. About €67-million of this sum represents projects that are ready for funding, including the second phases of LoNa and Kazungula.

DBSA PROJECT PIPELINE

Two projects with completed feasibility. Chirundu Cross Border (Phase 1: €7.6-million, Phase 2: €13-million) and Livingston Water Supply (€23-million).

Two projects currently being prepared with a DBSA-managed resource; the Project Preparation and Development Facility. Kazungula Phase 2 (€6-million) and LoNa Phase 2 (€12-million).

One innovative technology project. Ramotswa Aquifer between Botswana and South Africa which has been motivated for German government support in collaboration with KfW (€8-million).

SADC HYCOS project is being motivated for Green Climate Fund aid in collaboration with the DBSA Climate Finance Unit (€2-million for development and €40-million for implementation).

Read more in Green Economy Journal

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Premier’s Western Cape Energy Council seeks to make province energy resilient

This week, Premier Alan Winde hosted the first meeting of his newly established Energy Council. The meeting was held against the backdrop of the first round of stage 6 loadshedding for 2023, not even two weeks into the new year, and before intensive energy users have restarted operations.

The Council laid out the foundations for how it will be constituted and has fleshed out its priorities; namely to ensure that the Western Cape is energy resilient. Former Eskom manager Alwie Lester – who has been appointed as an energy advisor in the Office of the Premier was also officially introduced to other Council officials. “Mr. Lester has wasted no time and has hit the ground running,” the Premier pointed out.

“Urgency is required if we are to save our economy and push ahead with our Growth For Jobs strategy. Loadshedding is costing South Africa and our province billions in lost opportunities. It is conservatively estimated that stage 6 loadshedding is costing South Africa between four and six billion rand per day,” stressed the Premier. He added, “The urgency needed to address this catastrophe is painfully absent at national government. The Western Cape has to become independent of Eskom as quickly as possible”.

At the gathering a plan of action, both medium and long-term – was discussed, involving whatever resources the Western Cape Government (WCG) has at its disposal.

The council has resolved that:

  • its work must be data-driven;
  • a broad energy mix must be considered;
  • all viable opportunities must be explored; and
  • the most vulnerable in the province must always be borne in mind as they are suffering the most as a result of relentless power cuts, which are predicted to worsen this year.

“The same response the Western Cape Government applied to fight Covid-19 must be used in addressing the energy crisis.”

“A key approach is further opening up the market to Independent Power Producers to come on board to help us end loadshedding.”

Tertuis Simmers, Western Cape Infrastructure Minister

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Nersa approves 18.65% Eskom tariff hike for 2023/24 and 12.74% for the following financial year

The Eskom hole just keeps getting deeper. The state-run power provider, which is in full meltdown with Stage 6 rolling blackouts and a staggering R400-billion debt load, desperately needs cash from customers that it cannot supply to meet their demand.

By Ed Stoddard

Energy regulator Nersa has approved an 18.65% tariff hike for Eskom for the 2022/23 financial year and 12.74% for the next, heralding pain for consumers and industry alike. The 18.65% price increase for customers directly supplied by Eskom takes effect from 1 April, and the 12.74% from 1 April 2024. That translates into an increase of 31.39% over the next two years against the backdrop of high inflation, squeezed margins for power-intensive industries such as mining, and Eskom’s desperate bid to keep the lights on intermittently while preventing a full-scale blackout.  

In short, the Eskom hole just keeps getting deeper. The state-run power provider, which is in full meltdown with Stage 6 rolling blackouts and a staggering R400-billion debt load, desperately needs cash from customers that it cannot supply to meet their demand. 

The new increases — which are well above the current inflation rate of 7.4% — will just hasten a drive by households and industry alike to procure renewable and reliable sources of energy, depriving Eskom of more customers.  

It’s a business model made in hell which is hellish for customers and the company alike.  

Eskom had applied for a 32% increase for 2023/24, underscoring the scale of its dilemma as it scrambles to buy diesel for when its coal plants fail and attempts to pay independent producers to bring more power onto the ailing grid.  

Meanwhile, Finance Minister Enoch Godongwana told Reuters in an interview earlier on Thursday that the government would take on Eskom’s debt in a “staggered manner” to prevent the country’s debt-to-GDP ratio from going through the roof.  

The Treasury said in the October “mini-budget” that it would take on between one-third and two-thirds of Eskom’s debt to boost its balance sheet and set it on the road to financial viability.  

The tariff increase, while well short of Eskom’s request, will add to inflationary pressures in the economy — “administered prices” are part of the CPI basket — at a time when the South African Reserve Bank is in a hiking cycle in step with its global peers to contain rising prices.  

The best that can be said is that it could have been worse. 

Article courtesy of Daily Maverick

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Benefits of submetering office spaces

When thinking about submetering, images of large, industrial complexes or manufacturing facilities may come to mind. While it’s true that these places can benefit greatly from a comprehensive submetering program, the small or midsized office spaces can deploy submetering to greatly reduce total energy usage while simultaneously being a source of company pride and corporate responsibility.


What Uses the Most Energy in a Commercial Office?

Even though they are not full of industrial equipment, like motors, presses, metal working tools, or other heavy machinery, office spaces can still consume a significant amount of energy and warrant careful monitoring. Computers and lighting both contribute heavily to high consumption and are often overlooked by employees who may not realise how much energy they consume.

In addition, the HVAC system can often be the highest energy consumer in an office. These systems can run continuously, either intentionally or by mistake, so the system configuration and schedule lead to excessive energy usage.

Using Submetering to Monitor Office Energy Consumption

Submetering can be strategically deployed at an office’s electrical distribution board to track energy consumption around the clock. By using a multi-circuit submeter, energy consumption can be broken down by circuit, giving a clear idea of usage by department, floor, area, or specific load. Here are some of the ways office submetering can be useful.

Track Office Space Usage Patterns
Even though a monthly power bill will tell you the total energy consumed by an office, it will not break down the consumption by time of day or by department. The only way to get that level of detail is through submetering. By analysing the data collected with a submeter, it is easy to determine if the consumption is unusually high during off hours for lighting, peripheral equipment, and more. For example, if the lighting is left on overnight, it’s easy to make a quick adjustment to correct the problem to save energy.

Office Heating and Cooling Systems
Since most energy goes to power HVAC equipment, it makes sense to carefully track its consumption. Submetering HVAC systems can uncover excessive runtimes, maintenance issues, or scheduling problems. For instance, if the system is excessively cooling the office over the weekend or keeping the heat running through the night, the schedule should be adjusted to save energy. Submetering this system not only helps identify the problem but quantifies energy savings and helps to calculate the value of expensive maintenance plans or equipment upgrades.

Reduce Peak Demand Charges
Offices located in regions that implement peak demand charges can greatly benefit from tracking their consumption and understanding their load profile. By knowing how the office consumes energy as well as real-time consumption for a given timeframe, it is possible to adjust operations that reduce an office’s peak demand and avoid expensive demand fees.

Engage Employees
Employee behaviour has a direct impact on office energy consumption and keeping employees engaged in efficiency initiatives is key. While educating employees about turning off lights or unplugging equipment is a great first step, consider a submetering system with an easily accessible dashboard where employees can view real-time consumption, compare the current month with previous times, see historical trends, and more. By viewing the information as it happens, employees can take ownership of their consumption and pride in
conservation efforts.

Prove Corporate Responsibility
If company efforts include energy reduction or “going green,” a submeter is the ideal tool for proving that an office’s strategies for cutting energy usage are working. By tracking individual loads, it is easy to show how specific actions have had a direct impact on saving energy and showcase that information to customers or investors who may have their own initiatives for working with environmentally responsible companies.

Conclusion
Although office submetering may have an initial upfront cost, it is the best way to carefully track consumption and make intelligent energy decisions. Using the data collected through comprehensive submetering can help uncover inefficient equipment, reduce peak demand charges, and result in higher employee engagement in green initiatives.

To take the next step in your companies strive to energy efficiency and to improve your energy metering strategy, contact Accuenergy South Africa on +27 87 802 6136, info@accuenergy.com or visit our website at
www.accuenergy.com

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Agriculture, Land Reform and Rural Development gives climate advisory for 2022/23 summer

The majority of the country is currently reporting poor to reasonable veld and livestock conditions. Summer rainfall areas began receiving some rain, mostly later in October and farmers are preparing land for planting. Parts of the Western Cape, extreme western areas of the Northern Cape and the Sarah Baartman District of the Eastern Cape continue to experience dry conditions. The average level of major dams remains high in most provinces.

According to the Seasonal Climate Watch issued by the South African Weather Service, dated 1 November 2022, above-normal rainfall is expected for most parts of the country for the summer season. Minimum temperatures are expected to be above-normal countrywide, however, maximum temperatures are expected to be below-normal over large parts of the country during the entire summer.

The October Famine Early Warning Systems Network (FEWS NET) reported that Crisis (IPC Phase 3) outcomes are expected to become more widespread in areas of southern Madagascar, Malawi and Mozambique, as well as areas of Angola and much of Zimbabwe due to compounding impacts of poor 2021/22 rainfall, tropical cyclones, and domestic economic declines that started in October.

Food security outcomes are expected to be most severe in southwestern Madagascar, where Emergency (IPC Phase 4) outcomes also started in October. The population in need is likely to steadily increase through early 2023. Conflict in the Democratic Republic of the Congo (DRC) and northern Mozambique remains the primary driver of acute food insecurity with the disruption to livelihood activities. In Mozambique, the Cabo Delgado and Nampula provinces experienced an escalation of militia attacks in September.

According to the International Organization for Migration, more than 15 400 people were displaced between late August and late September. In the DRC, the security situation in the eastern provinces continues to deteriorate, especially in Ituri. Households in conflict-affected areas continue experiencing Crisis (IPC Phase 3) outcomes and face difficulty engaging in the upcoming agricultural season.

FEWS NET further reported that across the region, poor households are engaging in off-season income-earning activities. While opportunities are currently limited, they were expected to improve to near-normal levels in October as land preparation started in most areas. November through December will likely see further improvements in agricultural activities, including planting. Predicted La Niña conditions are typically associated with average to above-average rainfall in Southern Africa. They will likely improve the availability of agricultural labour opportunities in most of the region.

However, in areas like southern Madagascar, income from agricultural labour opportunities will remain lower than normal as better-off households have lower liquidity following consecutive droughts. Food prices are increasing as more households rely on markets for food, especially in areas where production deficits were observed in 2022.

This year, price increases have been accelerated by high fuel prices linked to high global prices, according to FEWS NET. Prices of maize grain are 70% to 180% above the five-year average in Malawi and up to 42% higher than the average in Mozambique. In the DRC and Zimbabwe, food prices are expected to remain above the five-year average throughout the lean season.

In Madagascar’s southern drought-affected areas, dried cassava prices are 67% higher than average. In most countries, inflation has also been increasing, likely triggering more price increases for food. Poor households in the most deficit areas will continue struggling to access food commodities on the market due to weak purchasing power.

[The IPC is a set of standardised tools that aims at providing a “common currency” for classifying the severity and magnitude of food insecurity.]

With the current conditions in mind, as well as the seasonal forecast, dryland farmers are advised to wait for sufficient moisture before planting and remain within the planting window. Farmers in areas that have been constantly experiencing dry conditions should prioritise drought-tolerant cultivars. In regions that are in reasonable condition, farmers are advised to prepare in line with the expected conditions, i.e., in line with the seasonal forecast.

However, they should not expand planting land unnecessarily. In addition, farmers should note that rainfall distribution remains a challenge, therefore not all areas might receive the anticipated above-normal rainfall that is well distributed.

Farmers are also advised to put measures in place for pests and diseases associated with wet and hot conditions as above-normal rainfall is anticipated. Moreover, it is important for farmers to follow the weather forecast regularly so as to make informed decisions. Farmers using irrigation should comply with water restrictions in their areas. Farmers must continually conserve resources in accordance with the Conservation of Agricultural Resources Act, 1983 (Act No. 43 of 1983).

Farmers are advised to keep livestock in balance with carrying capacity of the veld, and provide additional feed such as relevant licks. Livestock should be provided with enough water points on the farm as well as shelter during bad weather conditions. Winter rainfall areas are becoming drier, increasing favourable conditions for veld fires. Therefore, the creation and maintenance of fire belts through mechanical means should be prioritised along with adherence to veld fire warnings.

Episodes of flooding resulting from rain bearing weather systems have occurred and will continue; precautionary measures should be in place. Heat waves have been reported and will occur during summer and therefore measures to combat these should be prepared. Farmers are encouraged to implement strategies provided in the early warning information issued.

The department will partner with all relevant stakeholders to continue raising awareness in the sector and capacitation of farmers on understanding, interpretation and utilisation of early-warning information for disaster risk mitigation and response.

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SA’s new Just Energy Transition Investment Plan

Joint Statement

The International Partners Group, chaired by the UK and comprised of France, Germany, the UK, the US and the EU, jointly welcome and endorse South Africa’s Just Energy Transition (JET) Investment Plan.

At COP 26 in November 2021, the governments of South Africa, France, Germany, the United Kingdom and the United States of America, along with the European Union, issued a Political Declaration announcing a new ambitious, long-term Just Energy Transition Partnership (JETP). The Partnership aims to accelerate the decarbonisation of South Africa’s economy to help it achieve the ambitious goals set out in South Africa’s updated Nationally Determined Contribution emissions goals.

During the World Leaders Summit at COP27 on 7 November, President Cyril Ramaphosa of the Republic of South Africa launched the new JET Investment Plan prepared by the South African government as envisaged in the Political Declaration. The Plan covers three priority sectors – the energy sector as well as, electric vehicles and green hydrogen – for finance.

A ‘Just’ approach underpins the Plan, aiming to ensure that those most directly affected by a transition from coal – workers and communities including women and girls – are not left behind. It identifies $98-billion in financial requirements over five years to begin South Africa’s 20 year energy transition.  Investment will be required from both public and private sectors.

The IPG is mobilising an initial $8.5-billion to catalyse the first phase of the programme.

The funding package will be disbursed through various mechanisms over the five year period including grants, concessional loans and investments and risk sharing instruments. The IPG’s funding will align to the Investment Plan and be geared towards: coal plant de-commissioning; funding alternative employment in coal mining areas; investments which will facilitate accelerated deployment of renewable energy and investments in new sectors of the green economy.

The Chair of the International Partners Group, the United Kingdom’s Prime Minister Rishi Sunak, said: “I congratulate President Ramaphosa for the great progress that has been made on the South Africa Just Energy Transition Partnership. In one year since COP, South Africa, along with the UK and our friends in the International Partners Group, have shown how serious we are about making the changes we need to halt climate change. South Africa’s JET Investment Plan paves the way for a sustainable and fair transition away from coal and towards cleaner forms of energy, building the foundations for a strong green economy.”

The President of the United States of America, Joseph R. Biden, said:  “The United States is proud to partner with the Government of South Africa and the members of the International Partners Group to support South Africa’s just transition to a cleaner energy future. We welcome the comprehensive JET Investment Plan, and fully support South Africa’s economy-wide energy transformation. Our support for South Africa’s clean energy and infrastructure priorities, which include efforts to provide coalminers and affected communities the assistance that they need in this transition, will help South Africa’s clean energy economy thrive.”

The President of the Republic of France, Emmanuel Macron, said: “France is proud to work with South Africa on the implementation of this Just Energy Transition Partnership, which will help to strengthen the country’s energy security, green its electricity mix and set a benchmark for other countries around the world, while keeping at its core the just element of this transition in order to leave no one behind. I welcome the ambitious Just Energy Transition Investment Plan presented by South Africa and I am happy to confirm that France has just unlocked a concessional policy support of 300 M€ to South Africa, as a first step towards the fulfilment of our $1-billion commitment to support South Africa’s decarbonisation”

The Chancellor of the Federal Republic of Germany, Olaf Scholz, said: “Climate protection and economic prospects must go hand in hand. The adoption of the investment plan is a milestone on the path to a climate-neutral and – at the same time – socially just economy in South Africa. Germany is contributing 1 billion USD, including a substantial part through grants, to a support package from the international donor community worth 8.5-billion USD. This is an ambitious start. More needs to follow, particularly in collaboration with the private sector.”

European Commission President, Ursula von der Leyen, said: “For the EU, the climate transition needs to be just. This partnership, with new investments, is how we help ensure that nobody is left behind. Therefore I welcome the endorsement of this Investment Plan. It will now kick-start the Just Energy Transition Partnership with South Africa, a first of its kind global initiative for accelerating a just energy transition in countries that commit to phase out coal. It is a flagship of EU-supported multilateral cooperation to limit global warming to 1.5°C.”  

A joint 12-month update to leaders by South Africa and the IPG summarises key technical progress that has contributed to the development of the JETP Investment Plan. It, and the preceding six-month update to leaders, also outline measures undertaken by the government of South Africa to strengthen the enabling environment for South Africa’s long-term energy transition.

The IPG’s initial $8.5-billion funding package includes[1]:

  • $2.6-billion through the Climate Investment Funds Accelerating Coal Transition Investment Plan[2] (CIF ACT)
  • $1-billion from France[3]
  • $1-billion from Germany[4]
  • $1.8-billion from the UK[5]
  • $1-billion from the US[6]
  • $1-billion from the EU[7]

Some of this funding is already programmed while other parts of it have still to be finalised and programmed in line with the final Investment Plan. Work to programme the full $8.5-billion will continue in coming months.

In addition to the $8.5-billion, the World Bank Board has recently approved the Eskom Just Energy Transition project which is providing $0.5-billion of financing in support of South Africa’s Just Energy Transition.

INTERNATIONAL PARTNERS GROUP FINANCIAL SUPPORT

The IPG has supported South Africa’s Just Energy Transition in a variety of ways both directly and indirectly.  A fuller description of support is provided below.

Early progress in deploying the $8.5-billion support of Investment Plan

The Climate Investment Fund Accelerating Coal Transition (CIF ACT) Investment plan will provide $2.6-billion in total including $500-million of highly concessional Accelerating Coal Transition funding provided by the CIF. IPG members (Germany, the UK and the US) provide approximately 65% of funding for the overall CIF ACT programme. The CIF ACT Investment Plan will support the decommissioning and repurposing of three coal power stations, community development and energy efficiency projects in Mpumalanga. The World Bank’s Eskom Just Energy Transition project will provide finance for decommissioning and repurposing a further coal power station.

France and Germany are providing $600-million ($300-million each) for a concessional policy loan to South Africa to support the JETP.  The loan will be formally signed during COP27.

A number of IPG grant funded activities contributed to the development of the Investment Plan and will contribute to ongoing analytical and policy work as South Africa moves towards implementation.  These include:

  • The UK has funded work with municipalities and affected communities in the two most coal-dependant municipalities in Mpumalanga (eMalahleni & Steve Tshwete Local Municipality) to co-develop a coherent and inclusive just transition plan for each municipality.
  • Germany has funded the integration of renewable energy (particularly solar energy) into the existing energy grid. Measures to increase energy efficiency are being developed in cooperation with local authorities.
  • The US Trade and Development Agency funded a Clean Energy and Climate Infrastructure Event Series to promote cooperation on clean energy topics between the public and private sectors in the United States and South Africa.  The series inaugurated with a two-day workshop on green hydrogen, held last week [October 31 – November 1] in Cape Town.  USTDA also intends to support preparation of projects to strengthen South Africa’s grid and accelerate deployment of renewable energy.
  • The EU has awarded grants to increase the participation of South Africa’s civil society in reducing emissions and adapting to climate change, while enhancing gender equality and the participation of the youth by strengthening skills.
  • France has funded work for the development of a climate finance mapping and tracking tool, the execution of a study related to the localization potential for solar PV and storage value chains in South Africa as well as support to Eskom for the refinement of its JET strategy and implementation plan.

Elements of the $8.5-billion still to be programmed

A further $2.2-billion of sovereign loans will be programmed by France’s AfD, Germany’s KfW and the EU’s European Investment Bank in support of the Investment Plan.  The details of these loans will be announced as they are finalised.

$1.5-billion of Development Finance Institution support for private sector investment is available from the US and the UK. This will take the form of patient investments which will either seek to crowd in private sector investment to new and riskier areas or provide investment where the private sector is currently unwilling or unable to invest.  Details of these investments will be announced as they are finalised.

The UK is providing $1.3-billion of guarantees to enable enhanced AfDB lending in support of activities set out in the Investment Plan.  Details of the related loans will be announced once they have been agreed between the AfDB and the South Africa Government.

Additional IPG resources beyond the $8.5-billion

Further details of the $8.5-billion package are set out in the Investment Plan. In addition, the following additional resources are being made available by IPG members:

  • The US is making $45-million in highly concessional funding available through Power Africa
  • The European Investment Bank is making a €200-million loan to a South African bank for on-lending to eligible onshore wind and solar photovoltaic projects in South Africa.  Germany is providing €30-million to help South Africa develop Sustainable Aviation Fuel and €5-million to work on a Green LFG value chain.
  • In the second half of 2022, Germany offered 395 Million Euro to support the JET IP implementation, including 125-million grants.

[1] Some IPG contributions will be made in the provider’s domestic currency, which may be impacted by fluctuations in conversion against the dollar which means that the numbers may not total exactly $8.5-billion.  As of the date of finalising the Investment Plan they totalled $8.455 billion.  The country numbers in the press release have been rounded to the nearest $0.1-billion.

[2] The CIFs ACT Investment Plan is calculated on the basis that $500-million in ACT funding will leverage an additional $2.1-billion in finance including World Bank and African Development Bank loans as set out in the CIF ACT Investment Plan.

[3] $1.0025-billion

[4] $0.968-billion

[5] $1.824-billion

[6] $1.0215-billion, not including the additional $45-million of highly concessional funding (mentioned below)

[7] €1.03-billion via the European Investment Bank (EIB) and the Global Europe Programme. The European Investment Bank is planning to provide concessional loans up to 1-billion euros to decarbonise the South African Economy and promote the development of green hydrogen and the EU will further provide 35-million euros in support of Just Transition.

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COP27: The Investment Opportunities from Accelerated Climate Action

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SA is staring down the barrel of a water security crisis predicted decades ago – expert

Amid ongoing restrictions in Gauteng, experts have highlighted that water security in the whole of South Africa is under threat — a fact that has been known for the past two decades.

By Julia Evans Follow

“We are staring down the barrel,” said Professor Anthony Turton, a water resource management specialist at the University of Free State, at a public engagement on 26 October with Joburg residents and water specialists about the ongoing water crisis in Gauteng. This is despite Rand Water CEO Sipho Mosai emphasising at a media briefing recently that there is more than enough water going into the system.

The City of Joburg and Rand Water have been at pains to say that the recent water shortages in parts of Gauteng were initially caused by power failures (not scheduled load shedding) at two of Rand Water’s purification plants in Vereeniging in late September and then exacerbated by scheduled rolling blackouts.

Simon Xaba, the general manager of operations at Rand Water, told the press: “It is my opinion that if you have this frequent load shedding, you are technically fiddling with the stability of power.”

But while power plays an integral role in getting water pumped into reservoirs, Turton emphasised that experts in the water sector had known for the last two decades that South Africa would face a water deficit in the future.

They predicted in 2002 that by 2025 South Africa would need 63 billion cubic metres to service demand for the country despite only having 38 billion cubic metres of water accessible in dams.

Turton, the former vice-chair of the research advisory panel for the National Water Resource Strategy (NWRS) at the CSIR, explained that the first NWRS  — which was published in 2004, but the technical team had been workshopping the data since 2002 — is the most definitive study of the balance between water demand and supply South Africa has seen. At the time, the technical team quantified the country’s total water volume at 53 billion cubic metres.

The 2004 NWRS stated: “If we look forward to the year 2025, even if we factor in further infrastructure development, we find that several additional water management areas will most likely be in a situation of water deficit.”

There have been two NWRSes since, one in 2013 and one that came out this year, which is still under public review. Both used the same data as the first report.

Since then, independent peer-reviewed studies have used sophisticated mathematical modelling to revise SA’s total water volume from 53 billion cubic metres to 48 billion cubic metres. Turton explained that the number is lower in part because of climate change and the more sophisticated modelling system.

However, the accessible water in South Africa’s dams amounts to just 38 billion cubic metres.

This is because we can’t use water that is known in legal terms as the reserve. The reserve consists of two components: water in reserve needed for basic human needs, which is 25 litres per person per day that has to be left in the river if there is no piped water available in that area; and the ecological reserve, which is needed to sustain the ecological functionality of the ecosystem. 

So, assuming that the dams are full and that no storage capacity has been lost to sediment, South Africa has access to 38 billion cubic metres of water. But we need 63 billion cubic metres of water to service demand by 2025.

Even in 2008, WWF South Africa warned that 98% of available water resources was already fully used and the country could run out of water by 2025.

“This doesn’t mean the taps will run dry, but that water-intensive industries won’t be able to continue working as before and there may be water rationing,” said the chief executive of WWF South Africa, Morné du Plessis, in a media briefing in 2008.

“What we’re saying about water today [in 2008] is what the energy people were saying to the government 10 years ago,” Du Plessis said.


What does running out of water actually mean?

We’ve technically already run out of water.

Even though dams are full right now — the Vaal Dam is at 92% capacity — we’ve run out of water that is allowed to be allocated.

“When we say we ran out of water, we mean we have run out of water to allocate, that the demand for the licences for that water exceeds the available supply,” explained Turton. 

In 2002, the technical team working on the first NWRS said that 98% of the total volume available in SA’s 19 water management areas had already been allocated.

“We’ve given authorisations for water — for paper and pulp mills and oil refineries, etc — they’re all got their allocation of water, and then we’ve  allocated more water than we have available,” said Turton.

He explained that the allocation, known as ELU (existing lawful use), goes to lawful users of water as defined by the National Water Act.

“The sum of those ELU allocations equalled 98% of the known supply, with some water management areas being over-allocated by 120%,” said Turton. 

The first NWRS broke down SA’s water allocation to 62% for agricultural irrigation, 27% for domestic and urban requirements, 8% for mining, large industries and power generation, and 3% for commercial forestry plantations.

“The reason why the [Vaal] dam is full is because we’ve got to keep it for the years when we don’t have water — for the dry years,” explained Turton.

“We work on long-term averages and long-term trends. And the long-term trend was we ran out of water in 2002.”

Credit: National Water Resource Strategy 2004

As explained in the first NWRS, the “total water available includes the total local yield plus water transferred from elsewhere”. 

Turton said technical specialists in the water sector had known about this for 20 years but had been ignored.

Government needs to step up 

Dr Ferial Adam, manager of the civil action organisation WaterCAN, emphasised at the public meeting on 26 October that the problem lies in poor planning, failing infrastructure, underspending and sewage pollution. 

According to the Department of Water and Sanitation’s 2022 Blue Drop Report, 52% of SA’s water supply systems are in the medium to critical risk groups, 60% don’t comply with microbiological standards and 77% don’t comply with chemical standards.

The 2022 Green Drop Report classified about 60% of SA’s wastewater treatment works as being in a “poor to critical” state, and only 23 out of 995 wastewater systems qualified for Green Drop certification.

At its recent media briefing, Rand Water emphasised that South Africa, and Gauteng specifically, has high water consumption rates compared with the rest of the world, and while imploring the media not to make it seem that it was blaming consumers, encouraged a culture of conservation.

Rand Water reported that water consumption in South Africa is 233 litres per capita per day, which is relatively high compared with the world average of 173 per capita per day. 

And in Gauteng, 305 litres per capita per day is consumed during peak demand times.

However, Adam said Rand Water had failed to emphasise that this high consumption is because of extreme water losses — the last available Rand Water data indicates that 40% of water is lost due to leakages.

So, out of the 4 900 megalitres that Rand Water supplies every day, almost 2 000 megalitres are lost because of leaking pipes and ageing infrastructure.

Turton agreed that the consumption numbers Rand Water supplied were misleading — breaking down the numbers as such:

If Rand Water pumps 4.900-million litres to 17-million people, and 40% is lost to water leaks and 10% is allocated to commercial users, it’s actually 160 litres per person per day, which is below the global average and far below the estimated Gauteng consumption.

The 2019 National Water and Sanitation Master Plan reported that municipalities were losing about 1,660 million cubic metres of water per year.

As water costs R6 per cubic metre, this amounts to R9.9-billion lost annually.

Adam emphasised that only 46% of South Africans have a tap in their home and the government needs to step up, because we are “pumping water into an empty bucket”.

Solution

Turton said that even though it might seem that the situation is dire, there is a solution.

He emphasised that water is an infinitely renewable resource, and as a renewable source. “All we have to do is recycle our total national water resource 1.6 times, and then we won’t have a water crisis any more. In fact, we can then have full employment.”

We need to multiply the 38 billion cubic metres that are available in the dams by 1.6 to meet the upcoming demand of 63 billion cubic metres, which can be done by recycling the country’s total water resources.

However, to do that, we need policy certainty for the recovery, reuse and recycling of water — and at the moment we don’t have that policy.

Turton said that because we don’t have this policy, “we don’t have an enabling environment for capital and technology to come into the space”. 

“If we had to have a policy that accepts that water is an infinitely renewable resource, we would see targets being set. And so, for example, if you were to set a target that over the next 20 years we have to recycle our water source 1.6 times, but you start off with a smaller target and then ramp up over time to this bigger target.”

Turton explained that at the moment all of our water is treated to South African National Standard (Sans) 241.

“Whether you flush your toilet with it, whether you wash your car with it, whether you cool down your industrial process plant with it, whether you irrigate your garden with it, whether you drink it, it’s all the same standard water. 

“Now, that doesn’t make sense,” he said.

So, we need a policy change, which has to come from the government.

Turton added that we can recover water from sewage — SA produces five billion litres of sewage every day — and that water can be recovered, not as drinking water, but recycled back to non-drinking uses like cooling down boilers or irrigating public gardens.

Turton said we should also implement a “dual-stream reticulation economy”, which means having two pipes for every end user — one that supplies standardised drinking water and one that provides grey water.

“So, it will be safe to use, but it’s not drinking water. And that’s what you flush your toilet with, that’s what you want to water the garden with,” explained Turton.

Turton emphasised that all water supplied by entities like Rand Water or Umgeni Water is Sans 241 standard, but only 1% of that is for drinking.

Turton suggests that instead, we treat 1% to the highest standard, but then we treat the rest to a standard that is safe, but not necessarily a drinking standard. 

“That’s the direction we should go in,” said Turton. “And, at the moment, there’s just no insight into this possibility by any government leader. They keep on following the same old pattern of just building another dam and just blaming the public.” 

Article courtesy Daily Maverick

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Energy liberalisation to raise the country’s energy availability levels

Having exceeded the 150th day of loadshedding this year, South Africa’s economy continues to feel the strain of the energy availability factor, which is not able to reach the required levels. The South African Wind Energy Association acknowledges that while the problem is simple, developing solutions for the energy crisis is complex and requires the right expertise for planning.

At the heart of the plan, the Association is’ advocating for ‘Energy Liberalisation’ underpinned by a number of mechanisms. Specifically, Demand Side Management (DSM), where new generation capacity, for own use, must be considered as a mechanism to reduce demand and increase supply. “We believe that whilst the Electricity Regulation Act (ERA) amendment bill is the right policy intervention to support a liberalised energy market in South Africa, the removal of the license requirement for own use projects will not have the desired outcomes if not implemented efficiently and effectively,” explains Niveshen Govender, CEO of SAWEA.

He adds, “Policy alone is not enough, we must manage and improve the bureaucracy of the process required to build new generation capacity and renewable energy capacity specifically.”

The Association believes that there needs to be more and better coordination between stakeholders and that political will and regulatory frameworks should be forthcoming. The industry is calling for a clear, transparent and documented process to guide a number of blockages to delivering new generation.

“Our industry needs grid connection application, and wheeling conditions need to be standardised and finalised nationwide; as well as permitting requirements and processes that are accessible and practical,” says Govender.

Acknowledging that energy solutions will largely be funded privately, typical investor conditions should be encouraged to create investor confidence.

Private Power Purchase Agreements (PPAs) is new territory for South African Independent Power Producers and at this point still represents a fairly high risk for the producers, with contention around risk allocation between parties.

“Once we have the first few projects over the line, the industry will be able to iron out a number of the issues at play, but as it stands the industry needs to unpack a number of requirements for the private off-take market to achieve bankability,” concluded Govender.

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Crime, Covid and climate change: South African tourism faces many threats, but it’s resilient

Crime has resulted in negative media publicity recently, with a potentially adverse impact on the country’s image as a safe tourist destination. This comes at a time when the sector is recovering from the devastating effects of the Covid pandemic. Kaitano Dube, an expert in ecotourism, talks about tourism’s place in South Africa’s economy.

By Kaitano Dube, Ecotourism Management Lecturer, Vaal University of Technology


How important is tourism to South Africa’s economy?

Tourism is critical to South Africa’s socioeconomic development. It provides numerous benefits, including employment and entrepreneurship opportunities and much-needed foreign currency earnings. It also provides funding for conserving the country’s natural heritage in several protected areas.

In 2018, the tourism sector directly contributed 2.9% of South Africa’s gross domestic product (GDP) and 725,000 jobs. Its indirect contribution brought the share to 8.6% of GDP and 1.49 million jobs. Foreign visitors directly spent R82.5 billion, equal to 9.2% of national exports – the second most important export sector. Local tourists spent another R9.49 billion.

How has the sector grown – before and after Covid?

South Africa’s tourism industry had been growing steadily over the years before the outbreak of Covid in 2019. But the sector is vulnerable to disease outbreaks, economic downturns and other shocks such as climate threats. This was evident during the devastating 2018 “Day Zero” drought in Cape Town.

There was a dip in 2009 due to the 2008 global financial crisis. Before the Covid pandemic, the tourist arrivals stood at about 5.1 million. They plunged to about 2.4 million in 2020 before sliding further to about 930,000 in 2021.

Disease outbreaks on the continent also adversely affected the tourism sector around 2015 and in other periods due to the adverse impacts of Ebola in Guinea, Sierra Leone and Liberia.

The 2015-2018 drought in Cape Town also slowed tourism growth in the country, because the city is in one of the biggest tourism nodes.

As of the second quarter of 2022, the domestic tourism market had recovered by 139% as compared to 2019 base year which translates into 9 million domestic trips.

What are the main drivers of tourism in South Africa?

A rich cultural and natural heritage makes the country a must-visit tourist destination. The wildlife in 20 national parks and 10 UNESCO World Heritage sites ensures that tourists are spoiled for choice.

The coastline is another draw card. And South Africa is a gateway to other African tourist destinations.

Most tourists who come to the country travel for holidays (40%). Others visit friends and relatives (36.9%). Business meetings, incentives, conferences and exhibitions account for about 8% of visitors.

Prior to the COVID pandemic, most African tourists came from Zimbabwe (1,1 million), Lesotho (827 000) and Mozambique (681,530). The most important international markets outside africa were the US (183,134), Germany (149,531) and the UK (220,830). By the 2nd quarter of 2022 the domestic tourism market revenue grew to R24.4 billion representing a growth of 294.4% compared to 2019, while international market tourism spending went down to R11.1 billion marking a 36.4% decline.

What are the main threats to tourism and how are these being addressed?

The tourism sector in South Africa faces multiple threats, but nothing the country cannot handle. As noted earlier, climate change is an existential threat.

The deadly floods in KwaZulu-Natal province in 2022 also damaged the international airport and holiday homes and prolonged beach closures, with far-reaching implications for tourism recovery in the province and the country.

Diseases and pandemics remain a threat. The aftershocks of Covid can be seen in rising inflation, high interest rates and the fear of global recession. These threaten the sustainability of tourism in South Africa.

The political and social instability in the country, as seen in frequent mass protests and xenophobia, threaten the flow of African tourists. There is a clear decline in arrivals from countries such as Zimbabwe and Lesotho, which have been the targets of anti-immigrant rhetoric by some politicians.

Such hate campaigns against African countries threaten South Africa’s attraction as a destination for tourists from such places. Other negatives include the instability caused by infighting within the governing African National Congress – which resulted in the deadly July 2021 riots. This taints the country’s image and brand.

Other critical challengers include the knock-on effects of the Ukraine-Russia war. It has created uncertainties that have harmed the global tourism market, with implications for South African tourism. These can be worsened and compounded by internal challenges such as energy security.


The South African tourism market is quite resilient, but the issue of tourists’ security warrants attention. The country is generally perceived as a risky destination due to high crime levels.

Other concerns pertain to air connectivity after several airlines went under due to mismanagement and the Covid pandemic. Some local airlines were placed under administration or went insolvent – including SA Express and Comair. Mango, a subsidiary of South African Airways, is still battling to return to the skies after a severe cash burn. It is not clear what impact new airlines such as Lift, and the expansion of airlines such as AirlinkFlySAfair and Cemair will have on tourist movements across the country.

Article courtesy The Conversation

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