In line with its vision of creating a Common Future, ensuring economic well-being, improved living standards, freedom and social justice, and peace and security, the Southern Africa Development Community (SADC) established several financing windows under its Regional (Infrastructure) Development Fund. One of these is the SADC Water Fund, which became operational in 2015.
A main aim of the Fund, which finances transboundary infrastructure projects, is to address ageing and insufficient drinking water and sanitation systems, particularly in the region’s fastest growing towns and cities, while contributing to regional development and integration.
Hosted within the Development Bank of Southern Africa (DBSA), the Water Fund is an financing facility through which donors can channel funds that are then used in a coordinated manner to improve regional water infrastructure. KfW booted its initial seed funding of €10 million with an additional €5 million.
Combining NIRAS’s strengths in fund management and transboundary water infrastructure, a team of in-house and external consultants are providing technical support to the SADC Water Fund. NIRAS will develop the Water Fund’s operational procedures, support project applicants and project owners, and promote skills transfer to strengthen the capacity of the Water Fund staff to manage a diverse portfolio of these complex water infrastructure projects.
The Fund identifies bankable projects and provides supports through the structuring, transaction and post implementation phases. In detail, it supports the following activities:
- Identification and selection of bankable project proposals supported by feasibility studies;
- Provision of support to applicants in finalising project documentation;
- Manage the procurement and contract management under the Fund;
- Raise funding from development partners;
- Facilitate cross-border coordination and agreement during project preparation and implementation; and
- Post-implementation monitoring and evaluation.
Project activities eligible for financing under the Fund include investments in regional physical infrastructure for water supply and basic sanitation or mitigation of climate change impacts; consultancy services for the delivery of implementation-ready projects; and complementary or necessary micro studies for the completion of the preparation of the feasibility of the submitted project (e.g, environmental and social impact assessments).
Early in the process, two sites (Kazungula, Zambia, and a transboundary area between Mozambique and eSwatini) were identified as needing critical need for investment in infrastructure and the potential to contribute extensively to regional development objectives. Both are receiving support from the Fund.
The Kazungula water supply and basic sanitation project
Sitting on the crossroads of Zambia, Namibia, Botswana, and Zimbabwe, the town of Kazungula is perfectly situated to take advantage of a natural trade route between the countries. With the expected completion of a bridge spanning the Zambezi River in 2020 – and an ongoing trend of rural populations moving into cities – Kazungula is expected to grow and develop significantly in the years to come. However its water and sanitation system is not equipped to meet present demand, let alone future growth.
In its first phase, the Kazungula Water Supply and Basic Sanitation Project will ensure access to safe drinking water for as many urban residents as possible through the development of a new water intake on the Zambezi river, upgrading of the water treatment plant and delivering water to elevated areas. Longer term will focus on the related and important issue of sanitation. The town’s population density is insufficient to support a full sewerage system, but at present, there is extremely limited sanitation infrastructure. While some septic tanks have been installed, most residents rely on pit latrines or open defecation, with one public toilet block available in the town. Thus, significant investment must be made in constructing more communal sanitation facilities, ensuring that treatment of waste meets standards, and working with the local population to help change behaviours.
The Lomahasa-Namaacha Water Supply Project
Known as the “LoNa project” for short, this second project is ambitious: it will construct substantial transborder water infrastructure within and between the towns of Lomahasa in Eswatini and Namaacha in Mozambique, more than doubling the water supply available per capita.
During the intended project horizon, it is expected that the population of the impacted area will grow from around 32,000 residents to 46,500 and many people who presently live in rural areas will move to more urban areas. Without intervention, this will stretch the water supply to the breaking point, meaning that this project is critical to the continued development of the two towns – and the region as a whole.
Phase I of the project began in February 2020, with construction intended to wrap up within three years. During this period, a number of reviews will be conducted, design documents will be prepared, and construction will begin in both countries. This includes a new water pipeline and pumping stations in Eswatini and the construction of new reservoirs in both Eswatini and Mozambique.
The working project pipeline of the Water Fund is estimated to be about €120 million and includes six projects, at different stages of feasibility.
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