Investors eye projects to quench Africa’s thirst for safe water
With rapid urbanisation and the pressing demand for water infrastructure, investors are looking to quench Africa’s thirst for sustainable and safe water.
Businesses are diving into the sector, with Metito Utilities Limited (MUL) and British International Investment (BII) being the latest to announce their entry into the market.
The UK’s development finance institution and the multinational utility have unveiled the Africa Water Infrastructure Development (AWID) venture, which will develop climate-smart water projects at scale and increase water security across the continent.
AWID’s innovative approach to water infrastructure and provision in Africa is expected to set a sustainable commercial model, boosting long-term investment in the sector.
The platform will incorporate cutting-edge green technologies and alternative energy components, reducing environmental impact for water infrastructure projects, according to officials at the launch of the initiative in Cairo on March 13.
As it eyes promising returns, the platform — the first of its type in Africa — will focus on countries most vulnerable to the climate crisis.
“As Africa undergoes rapid urbanisation, there is a pressing demand for water infrastructure.
Such projects are particularly capital intensive,” noted Rami Ghandour, MD of Metito.
“An increasing funding gap requires mobilising sustainable investments into the sector.
“Our partnership with BII will leverage our high-value engineering and use of innovative technologies with access to unrivalled financial resources and support.”
The launch came as Belgian impact investor Incofin Investment Management said it plans to open an investment to tap water funds in more African markets.
“We have identified Kenya, Senegal and SA as priority countries.
“We also have experience working in Nigeria, Rwanda and Uganda and believe that these countries align with our investors’ risk appetite,” Dina Pons, managing partner at Incofin, told the publication, How We Made it Africa.
“Additionally, we consider the presence of a robust pool of potential private sector companies and impact investor ecosystem when choosing which countries to invest in.”
AWID’s launch comes as climate-induced changes in the water cycle are affecting the provision of water supply to health, economies, and food, increasing inequality of water access.
The consortium aims to mitigate these affects by integrating green technologies and alternative energy components, reducing the environmental footprint of water infrastructure projects.
One of the key assets under the new platform is an operational bulk surface water treatment plant in Kigali, which now provides more than 25% of the city’s potable water supply, meeting the needs of 500,000 domestic, commercial, and industrial consumers.
The Kigali water treatment plant is a public-private partnership, the first of its type under this business model outside SA.
With the launch of AWID, the consortium of investors aims to demonstrate that investing in water infrastructure can be both profitable and sustainable, providing a blueprint for other investors, governments, and operators to deliver operationally efficient and high-impact water infrastructure projects at scale.
In 2012, the British Geological Survey published a report that indicated that Africa has vast underground reserves of water,
holding an estimated 660,000km³ of water, more than 100 times more than what is now available.
According to the UN, more than 300m people in Africa lack access to safe drinking water and more than 700m lack access to essential sanitation services.