1. Overview of the WPO
The Water Partnerships Office (WPO) was established following a partnership between the Department of Water and Sanitation (DWS), the Development Bank of Southern Africa (DBSA) and the South African Local Government Association (SALGA). The role of the WPO is to develop standardized programmes and assist municipalities to prepare and structure bankable projects within the standardized programmes for private sector participation. The main objective of the WPO is to create opportunities for the private sector to support municipalities with the provision of water services.
2. Background and purpose of the WRP
The WPO and the DBSA designed a Water Reuse Programme (WRP) for South Africa to support the scaled preparation and implementation of water reuse and reclamation projects across the country. The WPO in partnership with the DBSA completed the design of the WRP and secured grant and concessional loan funding of around R4.23 billion (USD235m @ R18/USD) from the Green Climate Fund (GCF) for the scaled implementation of water reuse projects across South Africa.
The WRP includes a standardized approach and includes various components:
- A strong focus on climate adaptation
- A blended finance solution
- A standardized project preparation approach
- Communications, environmental, social and gender focus
- Private sector participation in financing, implementing, operating and maintaining the infrastructure.
3. Why do we need to reuse and reclaim water?
SA is a water scarce country and is facing a projected 17% water deficit by 2030 – many cities in South Africa are however already experiencing a water deficit. Increasing climate variability is exacerbating this water problem. Water & sanitation services are essential basic services and an economic enabler; for public health, social inclusion, economic growth and job creation. The South African National Water and Sanitation Master Plan (2018) makes a specific note of the need to reduce water demand and increase water supply through the “re-use of effluent from wastewater treatment plants, water reclamation, as well as desalination and treated acid mine drainage”.
A paradigm shift – from “waste” to valuable resource
The WRP will support complete resources recovery from municipal waste water treatment works and support various archetypes including direct and indirect potable use, industrial use and agricultural use. Water reuse and reclamation projects will also consider energy generation and sludge beneficiation.
4. Support and funding available under the WRP
The WPO can assist municipalities and water boards with the preparation, design and structuring of water reuse and reclamation projects. Support includes the following:
- Sourcing of project preparation funding for the preparation and structuring of water reuse projects A paradigm shift – from “waste” to valuable resource The WRP will support complete resources recovery from municipal waste water treatment works and support various archetypes including direct and indirect potable use, industrial use and agricultural use. Water reuse and reclamation projects will also consider energy generation and sludge beneficiation. The South African Water Reuse Programme Water Partnerships Office
- Potential access to GCF grant funding for preparation of water reuse projects
- Potential access to GCF loan funding for water reuse project implementation
- Access to standardised documentation, terms of reference, templates and models developed as part of the WRP
- Assistance with procurement of transaction advisors, EPC and O&M, etc.
- Accelerating regulatory and other approvals from DWS and NT
- Support with the preparation, structuring and design of water reuse projects
- Funding applications through the Infrastructure Fund to the BFI at the National Treasury
Projects that meet the GCF eligibility criteria can benefit from GCF funding support for project preparation (grant funding available subject to co-funding secured) or implementation (concessional loan funding subject to co-funding arrangements in place). Projects that do not meet the eligibility criteria can still be supported, however without GCF funding support, in which case other options will be considered. The funding available from the GCF includes the following instruments:
- A grant component of around R630 million (USD 35m @ R18/USD) made up as follows:
- Project preparation component of around R540m (USD 30m @ R18/USD)
- Capacity building component of around R90 million (USD 5m @ R18/USD)
- Concessional loan component of around R3.6 billion (USD 200m @ R18/USD) – primarily intended for capex and to lower the blended cost of debt on qualifying projects
GCF funding is available on condition that co-funding (both grant and concessional loan) are mobilized and specific ratios and other conditions being met.
5. Eligibility criteria
Detailed criteria were developed to determine projects eligible for support from the GCF funding for project preparation and implementation. The eligibility criteria include the following:
- Primary screenings and detailed climate risk and vulnerability assessments (CRVA) to prove that water scarcity in a project area / municipality is driven by climate vulnerability
- Secondary screening criteria:
- WWTW design capacity >= 20 Ml/d
- Regulatory compliance (chemical) > 50%
- Waste water treatment technology type: only activated sludge plants (including MBR)
- Environmental safeguards: projects shall comply with both GCF and DBSA Environmental and Social Safeguards Standards, with only Category B and C levels of impact being acceptable
- Financial viability: projects that move beyond project preparation into implementation must be financially viable
Primary screenings and detailed CRVAs have been completed in 47 municipalities (8 metros and 39 intermediate cities) with 34 municipalities qualifying for further funding support from the GCF. Municipalities that do not qualify can still be supported by the WPO from other sources (excluding GCF funding under the WRP).
EXPRESSION OF INTEREST
Municipalities are invited to submit their water reuse/reclamation projects and apply for support from the WPO by responding to this Expression of Interest.
The zipped Expression of Interest form can be downloaded from the DBSA website (WRP Eol) and completed expressions of interest can be submitted to wrpapplications@dws-wpo.org.za
Expressions of interest must be accompanied by:
A letter signed by the City/Municipal Manager requesting support from the WPO under the WRP; and
Any existing studies/reports done on the reuse/reclamation project (where available)