“THE Western Cape Government is making progress with the creation of an innovative financing mechanism, the Sustainable Infrastructure Development and Financial Facility (SIDAFF) Programme, which will unlock both local and international funding for municipal water and wastewater infrastructure,” Anton Bredell, Western Cape Minister for Local Government, Environmental Affairs and Development Planning said in February, at a ceremonial signing where the partners recommitted to the next phase of the project.
Bredell said that high-performing non-metro municipalities such as Drakenstein, Stellenbosch, Overstrand, Mossel Bay, Swartland, Breede Valley, George, and Saldanha Bay were considered for this project. An initial cohort of 17 water and wastewater projects across the municipalities, totaling over R2,2-billion, have been identified and are currently in prefeasibility stages.
Grant funding of R72-million has been secured from the Swiss State Secretariat for Economic Affairs (SEC), and R35-million from the DANIDA Sustainable Infrastructure Finance (DSIF), a division of the Investment Fund for Developing Countries (IFU).
“These financial contributions are helping us to get to the R110-million required for the next phase of this project, where the identified projects will be taken from feasibility to bankability.
The French Development Agency also played a pivotal role in the successful completion of the first two phases of the project, and GreenCape has been a support partner throughout the entire project. We are thanking each role player for their input so far,” said Bredell.
The SIDAFF facility is unique in its capacity to aggregate projects from different municipalities into a unified portfolio. This aggregation allows the facility to access investment from major international funding institutions that may not be structured to support smaller-scale, individual projects.
“The facility will be able to blend local and international finance, grants, and donor money, introducing much needed additional funding into catalytic municipal water and wastewater infrastructure,” Minister Bredell added.
Bredell said that several factors are contributing to making water security and water quality the next major challenge for towns and cities in South Africa: “Climate change is anticipated to make the Western Cape hotter and drier, and our growing population continuously adds more pressure on the available water resources. Wastewater works that operate beyond their design capacity are polluting our rivers and ground water sources, which poses growing health and economic risks. In addition to these, is the deterioration of government finances, contributing to municipalities struggling, or failing, to keep up with water and wastewater infrastructure maintenance and development.”
“Our ambition is to scale the SIDAFF Programme to include all municipalities in the Western Cape, provided they meet prudent financial management criteria. To facilitate this, a municipal special-purpose vehicle will be established, transitioning responsibility from the Provincial Government to municipalities. This will enhance financial independence while maintaining investor confidence through WCG oversight,” Bredell said.
