Bucket list: The solution to Africa’s water problems lies not only in building more infrastructure but in innovation and investment, the writers say. Photo: Delwyn Verasamy
For too long, the narrative surrounding water in Africa has been one of need — or excess — and crisis. That’s about to change.
A fundamental issue at the recent African Union-AIP Water Investment Summit in Cape Town was the immense commitment of $30 billion annually by 2030, set some years ago by the High-Level Panel of the Africa Water Investment Programme, to secure the continent’s water future.
The Global Outlook Council on Water Investments, a G20 Presidential Legacy Initiative, was launched at the summit, repositioning the African Water Investment Platform as the Global Water Investment Platform, marking a pivotal mindset shift.
The goal is to turn water provision from fragmented crisis into coordinated opportunity, not just in Africa, but around the world. With a pipeline of 80 priority projects across 38 countries already identified, Africa is poised for this paradigm shift.
However, this transformation cannot be achieved simply by building more water infrastructure. The true opportunity lies in embedding engineering innovation in this investment drive and proving we can deliver measurable social, economic and environmental returns.
Securing the scale of investment needed requires more than innovative engineering, however. It demands financing models that are credible, bankable and aligned with the developmental realities of each country involved. A commitment to efficiently and effectively managing existing infrastructure must be demonstrated.
The principle is simple — it is cheaper to maintain than to repair and cheaper to repair than to replace.
Water is a public good, yet the infrastructure that delivers it must be financed, built and maintained in a way that balances commercial viability with the imperative of social impact. Investors need to be confident that their capital will be used effectively, not simply poured into a leaky bucket.
The following form part of an investor’s “checklist”: technical feasibility; revenue model; governance and management; risk allocation; environmental and social impact; regulatory framework; capacity for operations and maintenance and monitoring and reporting.
To achieve investment in water provision as a social, rather than commercial, endeavour, traditional project finance structures are not feasible. Blended financing structures become increasingly important.
Public-private partnerships, where municipalities and water boards collaborate with private operators, can deliver much-needed investment if the risks are fairly allocated.
Municipal and green bonds, linked to measurable outcomes such as reduced non-revenue water or improved Blue and Green Drop scores, offer another avenue for raising capital through domestic markets.
Development finance institutions also play a crucial role by providing concessional loans or guarantees that reduce investor risk and crowd in private capital.
In parallel, innovative approaches, such as results-based financing, where disbursements are tied directly to performance indicators such as water quality improvements, can introduce greater accountability and transparency into the sector.
South Africa, for example, has a water landscape plagued by issues in need of fixing. The Department of Water and Sanitation’s (DWS) 2023 No Drop Report revealed a staggering statistic — national non-revenue water — treated water that is lost before it reaches the consumer — stood at 47.4%, a significant increase from 37% in 2014. This is far above the international average of 30%.
Declining water quality is another critical challenge. The DWS’s latest Blue Drop Report, which assesses drinking water quality, found 46% of water supply systems had poor or bad water quality, a dramatic deterioration from 5% in 2014. Only 26 systems achieved Blue Drop certification, down from 44.
The latest Green Drop report, on wastewater treatment, showed that most treatment works are at high or critical risk of polluting our rivers and environment.
These are management problems stemming from ageing infrastructure, a lack of technical skills in municipalities, illegal connections and a culture of non-payment for services. These fundamental issues must be rectified if we are to realistically expect investment.
Future funding and investment should be directly linked to measurable outcomes, as reflected in these reports. Municipalities and metros could be incentivised to achieve and maintain high Blue and Green Drop scores, effectively turning these reports into key performance indicators for investors.
This would create a clear line of sight between funding and public health, environmental protection and good governance.
Much of the solution lies not just in new infrastructure, however, but in new intelligence. Smart management, powered by technology, offers a path to optimise our existing systems. The focus must be on both the quantity and quality of our water resources.
Smart asset management is key for investors, too. It optimises returns by minimising risks through strategic allocation across asset classes and improves the overall financial health of their portfolio.
It provides comprehensive information, allowing for a data-driven approach to making informed decisions about capital growth and alignment with both long-term financial objectives and potential environmental, social and governance principles.
This is where engineering becomes transformative. The Internet of Things is a critical enabler. By deploying networks of sensors, we can gain a real-time view of water distribution systems. These sensors can detect leaks with pinpoint accuracy, monitor pressure to prevent pipe bursts and track water quality.
A data-driven approach to water management allows for proactive, predictive maintenance rather than costly reactive repairs (or systemic breakdown), providing investors with assurance that their capital is being used optimally.
Forward-thinking infrastructure planning will allow Africa to leapfrog to the forefront of global water management, rather than just catch up.
While South Africa might be years away from full-scale “digital twins” — virtual replicas of our physical water networks — it’s time to lay the groundwork. A digital twin integrates sensor data, hydraulic models and AI to precisely simulate network performance (eg identifying leaks), test scenarios and optimise operations. By embedding sensors and smart meters today, we build the foundational data layer for tomorrow’s digital twins.
A core component, too, of Africa’s water investment programme drawing investment and succeeding must be commitment to upskilling our labour force and building technical capacity in local government. Even the most advanced Internet of Things network or Digital Twin will fail without skilled technicians and engineers operating and maintaining it.
From an investor’s perspective, water projects will only attract capital if they demonstrate technical feasibility, financial soundness and institutional credibility. Risk allocation must be clearly defined, with transparency on how construction, operational and political risks are mitigated.
Lenders and investors will look closely at the strength of the revenue model (if shortfalls are present, government stopgap is expected), the health of the municipality or water board and the robustness of governance and management systems.
Financiers are also insisting on strong environmental and social impact frameworks, with alignment to environmental, social and governance principles and the UN Sustainable Development Goals. There must also be evidence of capacity on the ground for adequate maintenance and monitoring.
The AU-AIP Water Investment Summit has given us a bold vision: to turn Africa’s water crisis into a driver of opportunity. We can deliver a sustainable water future and attract investors, by designing smarter, better-maintained and more transparent new and existing systems.
Bonga Ntuli is the director of strategy & commercial and water at engineering consulting firm Atana. He brings a deep understanding of the forces shaping African infrastructure to Atana’s strategic and commercial direction. David Sawyerr is a development finance specialist with over a decade of experience in structuring and implementing public infrastructure projects across Africa. The views expressed are his own.