South Africa Water Expenditure Needs Rise to $71 Billion

South Africa will look to the bond markets, banks and increasing customer revenue to finance the 700 billion rand ($71 billion) needed to meet the country’s growing demand for water, the Department of Water Affairs said.

Africa’s largest economy raised the estimate for spending on water provision over the next 10 years from 570 billion rand after including sanitation, refurbishment of existing infrastructure and irrigation, Trevor Balzer, the department’s acting director general, said today in an interview. The country has budgeted for about 45 percent of the 700 billion rand needed, leaving a gap of 385 billion rand, he said.

South Africa’s water demand will outstrip its supply between 2025 and 2030, according to projections in the National Treasury’s 2012 Budget Review. The country, the world’s 30th driest, is “water stressed” and the current inability to provide clean water to communities contributes to poverty, inequality and poor health, a government strategy document said in June.

“We need to look at our current sources of funding and whether there’s an opportunity to increase funds from them,” Balzer said during the South African Water Energy and Food Forum in Johannesburg. “We need to look at opportunities from central government, in concessionary financing and we’ve got to push more on the private-sector funding through commercial banks.”

South Africa loses about 1.58 million cubic meters of water each year, or about a third of its urban supply, to leaks and theft, according to the second edition of the National Water Resource Strategy, published in June.

“We must improve on our revenue collection both at a national level for the department and at municipal level,” Balzer said. The department is putting together an investment plan that will have more detail on how the funding gap will be closed, he said.

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