HomeIndustry SectorsAsset MaintenanceSouth Africa’s water sector ripe with investment opportunities

South Africa’s water sector ripe with investment opportunities

Equitable access to water and sanitation for all South Africans comes with a multi-billion rand price tag. But for willing investors, and businesses in the urban water space, the opportunities are substantial.

By Di Caelers

Water efficiency, GreenCape water analyst Ashton Mpofu told yesterday’s session of the Water Institute of Southern Africa’s (WISA) 2020 annual conference, is one of three significant investment opportunities in the sector highlighted for inclusion in GreenCape’s 2021 Water Market Intelligence Report (MIR).

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“We need to reduce water losses due to ageing infrastructure. But large amounts of water are also stolen, lost through leakages or faulty metering,” he stressed. In the 2018/19 financial year, these losses amounted to R6.6 billion.

Describing this opportunity as “low-hanging fruit”, Mpofu urged municipalities to focus their efforts – and investment – on addressing the situation, which he said would contribute positively to ensuring sufficient water supplies for the nation.

“Among the current barriers to success is that 41% is the current national average loss of non-revenue water, and the master plan wants to the see the country reduce that figure by 15% by 2030.

The lack of access to safe sanitation opens up business opportunities

“To reduce that figure to 26% by that time, we need investment. For this opportunity, we need investment of just R676million, but that will translate to potential savings of R6 billion a year,” Mpofu pointed out.

This would require efforts to overcome shortcomings in terms of technical capacity, but also a focus on locally-proven technologies that enjoy broad public acceptance.

Meanwhile, with 14 million South Africans living without access to safe sanitation, the status quo presented a second significant opportunity with a market potential of some R41.4 billion, Mpofu continued.

This was in reference to non-sewered sanitation systems, more commonly known as “alternative sanitation”. 2.8 million households do not have access to safe and dignified sanitation, according to the 2018 General Household Survey.

He explained that this situation is driven by issues including informal settlements on private land, lack of bulk infrastructure, problematic maintenance of that infrastructure, and the increasing migration of people to urban areas.

“But if 2.8 million households don’t have access to safe sanitation, that translates to a market potential of R41.4 billion. Cape Town has the largest investment potential for non-sewered sanitation systems, at almost R2 billion in capital investment,” he added.

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Mpofu also pointed to the lack of wastewater sludge beneficiation, or using the sludge for a beneficial purpose, as the third significant investment opportunity. Currently, most wastewater sludge ends up in landfills in South Africa, when it could be diverted to be turned into fertilisers and similar useful products.

“We need to promote acceptance of such value-added products in the market. Tshwane has an agreement to provide sludge to be used to produce fertilisers, but it’s something we can do as a country,” he said, adding that the aim was to achieve 50% diversion for South Africa by 2022. If all sludge from the metros, excluding Tshwane, were beneficiated, this would save South Africa average annual disposal costs of R330 million.

These major opportunities, Mpofu stressed, not only offered significant investment opportunities, but could play a key role going forward as South Africa innovated in order to provide safe water and sanitation for every one of its citizens.

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