water
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In addition to Market Intelligence Reports on South Africa’s energy sector, GreenCape has delved into the investment opportunities present in the country’s water sector.

The 2021 water Market Intelligence Report (MIR) goes into detail about opportunities in conservation and water demand management (i.e. non-revenue water); alternative sanitation (non-sewered sanitation systems); and resource recovery (beneficiation or alternative disposal methods that address wastewater sludge).

The MIR also expands on estimated market size, drivers and barriers. Ashton Mpofu, GreenCape water sector analyst, says reducing non-revenue water (NRW) losses is important to achieve security and reliability of supply, municipal revenue recovery for maintenance and to off-set future capital expenditure.

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“Investing in NRW could realise savings of R7.3 billion per year in bulk water costs. Non-sewered sanitation systems can address the challenge of delivering sustainable sanitation services in new property developments, rural communities and low-income and informal settlements,” said Mpofu. He pointed out an investment potential of R41.4 billion is estimated as necessary in order to achieve universal access to safe sanitation for the country.

Managing water lost before reaching the customer could make for good business opportunities

Rudi Botha, GreenCape water sector analyst, said business models exist for a variety of stakeholder business in NRW reduction.

Technology providers that install flow and pressure metering and monitoring devices can benefit from tenders by municipalities determined to reduce their NRW. “This is because the key to reducing NRW is measuring the quantity of water entering the system and being used in the system in order to calculate the lost water.

“A more advanced step may include the installation of leak detection technologies, such as ultrasound devices and risk models, which can reduce leak repair response times as well as predict pipes at risk of bursting.”

Database and account management services are required to improve accuracy in meter reading and recording, as well as billing systems. This is to manage unpaid accounts, notify households of identified leaks and create awareness of where internal municipal water use can be reduced.

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Data management service providers usually offer data-as-a-services as an ongoing service contract, rather than upfront capital cost, which can be lucrative because there are few costs once the data platform is set up. Consultants to design these systems and assist with tender specifications as well as financial services providers offering loans also play a significant role in NRW reduction.

“If the implementation of a NRW reduction project follows a performance based contracting approach, as was done in Polokwane, a municipality may offer a percentage of their bulk water cost savings to the service provider. These contracts can be beneficial to both parties – the service provider can achieve a significant profit on the cost of project implementation while the municipality will receive the biggest bulk water cost saving as there is incentive for the service provider to achieve this,” said Botha.

Liquid waste ban opens up all sorts of business opportunities

Botha explained that beneficiation or alternative disposal solutions for wastewater sludge must be developed due to the national ban on liquid wastes at landfills which was put in place in August 2019.

“There are opportunities to transport and beneficiate sludge to the value of about R330 million per year across all metros, excluding Tshwane, with approximately R86 million in the Western Cape,” she said.

Developed annually in partnership with the Western Cape Government’s Department of Economic Development and Tourism the MIRs highlight investment opportunities and highlight relevant legislation context, potential market barriers and risks in energy services, utility-scale renewable energy, electric vehicles and water.

GreenCape also publishes a Sustainable Agriculture MIR in partnership with the Western Cape Department of Agriculture and a Waste MIR in partnership with the City of Cape Town. You can read the 2021 water MIR online.