SMART CITIES
A bankable, non-revenue water project using technology While reducing non-revenue water (NRW) is a high priority for most municipalities, the capital requirement to address this problem typically exceeds the available municipal budget. With this in mind, the Development Bank of Southern Africa (DBSA) assisted the City of Tshwane in preparing an NRW project from the concept phase to bankability. Konstant Bruinette, senior deal originator at the Development Bank of Southern Africa
Leaking pipe at Moreleta Reservoir
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unicipalities often have to prepare an NRW programme and go to market for funding. However, financiers look for a holistic solution when tackling NRW, and municipalities usually focus on a single element like replacing meters or pipes,” says Konstant Bruinette, senior deal originator at the DBSA.
City of Tshwane With a 700 km pipeline and water infrastructure valued at R22 billion, the City of Tshwane loses millions of rand annually due to water losses in the transmission and distribution network, and has poor cost recovery (86%). Estimates of physical losses (leaks) in the municipality’s network range between 25% and 40%. The metro consumes approximately 1 000 Mℓ/day of water. The impact of deteriorating water distribution and transmission infrastructure was not limited to physical losses only. In an environment of limited maintenance, water meters were typically the type of device where maintenance falls short or is neglected completely. As a result, the proportion of non-functional water meters had grown rapidly. This had a direct impact on billing and cost recovery.
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IMIESA June 2022
Lesego Lekubu, programme manager: WC/WDM Programme, City of Tshwane
“We were fortunate to receive project preparation assistance from the DBSA. A lot of time and effort was directed towards identifying potential interventions to address water losses holistically with the NRW project,” explains Lesego Lekubu, programme manager: WC/WDM Programme, City of Tshwane.
Funding The City of Tshwane’s NRW project is designed to allow for phased financing and implementation. It is a hybrid between conventional balance sheet finance and project finance. The intention is to strengthen the financial position of the metro by increasing cash flows stemming from the interventions that are implemented on a sub-project level. Funding for future sub-projects will be Construction of new bunkers
progressively advanced to the municipality in tranches by the participating financiers against strict criteria for the achievement and maintenance of key performance indicators of the sub-projects already implemented. As the programme is rolled out, less debt will be required to finance the new subprojects, because the municipality will be able to fund a larger portion through its own funds generated from the savings and improved revenues stemming from already implemented interventions. “We received grant funding (R34 million) from the Investment Infrastructure Programme for South Africa (IIPSA) in 2019 to start a feasibility study for a water conservation and water demand management (WC/WDM) programme. Additional funding of R6 million Fixing PRVs
