A FRAMEWORK FOR A JUST TRANSITION IN SOUTH AFRICA

South Africa is in a part of the world that is severely impacted by climate variability. The country frequently experiences droughts, floods, and other extreme weather events, with evidence that the frequency and intensity of such events are increasing because of climate change (IPCC 2022).

These events have already caused enormous damage to infrastructure, ecosystems, lives, and livelihoods, and displaced thousands of people, and continue to be a stark reminder that it is poorer communities –women and young people, the unemployed, those living in informal settlements – that are most vulnerable to climate change.

Climate change also places significant stress on food security and South Africa’s already-constrained water resources, creating knock-on impacts in other sectors (DFFE 2019; NPC 2020).

Climate change exacerbates South Africa’s triple challenges of poverty, unemployment, and inequality. South Africa is one of the most unequal countries in the world; the divide between the rich and the poor is larger than ever; currently, the unemployment rate, at over 35 percent, is at record levels (StatsSA 2022). The health impacts from the burning of fossil fuels (a major driver of climate change) also impacts poorer communities, further highlighting these inequities (Gray 2019; Madonsela et al. 2022).

The PCC’s community engagements in the early part of 2022 identified the hardships that many South Africans are experiencing. Workers, jobseekers, and community members have spoken passionately and articulately about the unfairness of their current situations, the inequalities they experience, and their visions for a more equal and more inclusive society (PCC 2022).

At the same time the capacity of the state to respond to these challenges has never been weaker, and communities have expressed the view that the state is failing them.

It is in South Africa’s national interests to join the world in combating climate change, in accordance with national circumstances and development priorities. This is not only an environmental imperative, but an economic one too, as countries around the world start to shift toward low-emissions policies, affecting global trade as well as demand for goods and resources. Addressing climate change means strengthening adaptation measures to improve the resilience to immediate events (e.g., extreme weather, disasters) as well as long-term climatic shifts that impact water security, food security, and human health (DFFE 2019), with a particular focus on vulnerable groups, particularly rural communities, the poor, women, the youth, and children.

Addressing climate change also necessitates sharp reductions in greenhouse gas emissions – the harmful pollutants that drive climate change. The scale of the challenge also demands an effective State, significant government capacity, and trust among all stakeholders, which has been significantly eroded in recent years because of the loss of accountability and professional ethos linked to state capture (The Presidency 2022).

Tackling climate change will require urgent, significant, and transformational changes across all sectors of the South African economy.

It will require innovations in urban and infrastructure planning; a massive shift to clean energy sources; and changes to how we use our land, water, and obtain our food (IPCC 2022).

The changes will be difficult for some, particularly the workers and communities whose lives and livelihoods are tied to fossil fuel industries, as well as the women, the youth, and the poor, who are already disproportionately bearing the brunt of South Africa’s hardships and triple challenges.

Managing the transition will require strategies that both deal with the unavoidable burdens arising from the transition, as well as strategies that seize the opportunities offered by the green economy, with wide sharing of benefits.

People must be at the centre of the climate change response (ILO 2015; DFFE 2022). Indeed, the aim is a just transition: seizing the opportunities and managing the risks associated with climate change, with an overarching goal of improving the lives and livelihoods of ALL South Africans, particularly those most impacted.

The scope of a just transition is wide, both in the focus on people, and on the time scales of action and delivery.

Improving water and sanitation infrastructure through SADC Water Fund

Southern Africa’s water supply is unequally distributed, with 70% of water resources shared between different countries. Transboundary water management is crucial for regional development. WASA speaks to the Development Bank of Southern Africa (DBSA) about its strategic partnership model to strengthen the implementation of various water and sanitation programmes within the SADC region.

What is the SADC Water Fund? The Southern African Development Community (SADC) Regional Fund for Water Infrastructure and Basic Sanitation (SADC Water Fund) is the financing facility for the development and integration of the water and sanitation sector in the Southern African region. The SADC Water Fund finances infrastructure projects to improve the supply of drinking water and water for agricultural use for the poor.

SADC member countries established the SADC Water Fund mainly as a regional development financing facility, with the mandate of strengthening the coordinating function of SADC by funding projects to improve regional water and sanitation infrastructure, as well as facilitate information and knowledge sharing.

What is the DBSA’s role within the SADC Water Fund? The DBSA, together with the SADC secretariat and the Kreditanstalt für Wiederaufbau (KfW) Development Bank, entered into a financing and project management agreement in December 2012. The DBSA is the mandated lead arranger that is responsible for managing its regional fund for water. As the project executing authority, the DBSA’s Infrastructure Delivery Division is responsible for the overall programme management and implementation of the Fund. This allows the Fund to leverage the bank’s institutional capacities and promote synergies with the DBSA’s other activities, such as receiving co-funding from the bank’s other product offerings.

What are some of the key objectives of the Fund? The Fund’s development objectives are to: • promote and support strategic transboundary and pro-poor water supply and sanitation infrastructure development in the SADC region • promote climate resilience in the water supply and sanitation sector in the SADC region • facilitate the application of integrated water resources management principles for infrastructure development.

How does the dedicated Fund Management Unit work? The Fund identifies bankable projects and provides support through the entire value chain. The SADC Water Fund supports the following activities: • identification and selection of bankable water and sanitation project proposals (quality feasibility studies must be available) • provision of support to the applicants in finalising project documentation • contract and procurement management under the Fund • raising of additional funding from other development partners • facilitation of cross-border coordination and agreements during project preparation and implementation • post-implementation monitoring and evaluation.

Member States

SADC

Agency Agreement Regional Mandate

Funding

FIGURE 1 How the SADC Water Fund works

DBSA

SADC Water Fund Project & Finance Agreement

Regional Projects

SADC- Southern African Development Community Objective: To achieve development, peace & security, economic growth, to alleviate poverty, enhance the standard and quality of life of peoples of SADC, support the socially disadvantaged through regional integration. Receipts & expenditures SADC relating to development of SADC region.

RDF shall be main SADC instrument for socio-economic development and integration of SADC region.

Water-Energy-Food NE Improve water and sanitation transboundary infrastructure along major trade corridors in the region key to promote regional integration and address rapid urbanization due to increased cross-border trade and traffic volumes X Border WASH facilities. However, these urban statistics generally exclude the urban poor living in informal settlements. That’s why there’s such a huge need for water and sanitation infrastructure in urban and rural areas in SADC. Infrastructure needs to be developed, rehabilitated, expanded and climateproofed to be resilient to floods and droughts. The recent Covid-19 pandemic is a strong reminder of the importance of access to WASH facilities, especially for the poor, to ensure community resilience to adverse events such as outbreaks or the effects of climate change. Addressing such a huge need also presents a challenge and opportunity for innovation in infrastructure technological approaches, financing and implementation models. The Fund’s sustainability and growth strategy is anchored on: • a diversified portfolio of projects within the water and sanitation sector • diversified and innovative funding instruments • diversified international and local Why is a Fund like this essential, development partners. especially for the SADC region? To achieve this, the Fund has More than a third of people in the developed a programmatic approach SADC region do not have access to with three programmes that have a safe drinking water and over half nexus approach. These are backed by of the region’s population do not an immediate financing pipeline of have access to improved sanitation about €120 million (R2.1 billion).

As the project executing authority, the DBSA’s Infrastructure Delivery Division is responsible for the overall programme management and Objective: SADC- Southern African Development Community implementation of the Fund. This To achieve development, allows the Fund to leverage the peace & security, economic bank’s institutional capacities and promote synergies with the DBSA’s growth, to alleviate poverty, enhance the standard and quality of life of peoples of other activities, such as receiving SADC, support the socially co-funding from the bank’s other product offerings. disadvantaged through regional integration. What are some of the key objectives of the Fund? The Fund’s development objectives are to: • promote and support strategic transboundary and pro-poor water supply and sanitation infrastructure development in the SADC region • promote climate resilience in the water supply and sanitation sector in the SADC region • facilitate the application of integrated water resources management principles for infrastructure development. How does the dedicated Fund Management Unit work? The Fund identifies bankable projects and provides support through the entire value chain. The SADC Water Fund supports the following activities: • identification and selection of bankable water and sanitation project proposals (quality feasibility studies must be available) • provision of support to the applicants in finalising project documentation • contract and procurement management under the Fund • raising of additional funding from other development partners • facilitation of cross-border coordination and agreements during project preparation and implementation • post-implementation monitoring and evaluation. SADC Regional Development Fund RDF

Receipts & expenditures of SADC relating to development of SADC region.

RDF shall be main SADC instrument for socio-economic development and integration of SADC region. SADC Regional Water Infrastructure and Basic Sanitation Fund

Key financing facility for development & integration of water sectorin SADC region. SADC Water Fund’s long-term vision is to become a special “water sector window” of RDF.

Water Fund hosted in DBSA Objectives:

•Strategic pro-poor WASH infrastructure development • Climate resilience in WASH sector •Application of IWRM to infrastructure development

Water-Energy-Food NEXUS Investment in pilot projects (locally relevant innovative technology, financing and governance models) for resilient water sector in major cities in transboundary catchments. Why is a Fund like this essential, especially for the SADC region? More than a third of people in the SADC region do not have access to safe drinking water and over half of the region’s population do not have access to improved sanitation

Improve water and sanitation transboundary infrastructure along major trade corridors in the region key to promote regional integration and address rapid urbanization due to increased cross-border trade and traffic volumes X Border WASH Regional Water Innova for Resilience tion Support to transboundary hydrological and metrological data collection &, development of information for sustainable infrastructure, risk preparedness and climate adaptation. facilities. However, these urban statistics generally exclude the urban poor living in informal settlements.

That’s why there’s such a huge need for water and sanitation infrastructure in urban and rural areas in SADC. Infrastructure needs to be developed, rehabilitated, expanded and climateproofed to be resilient to floods and droughts. The recent Covid-19 pandemic is a strong reminder of the importance of access to WASH facilities, especially for the poor, to ensure community resilience to adverse events such as outbreaks or the effects of climate change.

Addressing such a huge need also presents a challenge and opportunity for innovation in infrastructure technological approaches, financing and implementation models.

The Fund’s sustainability and growth strategy is anchored on: • a diversified portfolio of projects within the water and sanitation sector • diversified and innovative funding instruments • diversified international and local development partners. To achieve this, the Fund has developed a programmatic approach with three programmes that have a nexus approach. These are backed by an immediate financing pipeline of about €120 million (R2.1 billion). What projects are currently being financed under the Fund? As part of its programmatic approach, the Fund has the several ongoing activities: • Cross-border infrastructure for water supply: By 2042, approximately 76 000 people living below the poverty line and without access to water will benefit from the Kazungula Water and Sanitation Project in Zambia, as well as the Lomahasha and Namaacha water supply projects in Mozambique and Eswatini. • Innovation for climate resilience: The Ramotswa (in Botswana) Transboundary Aquifer – where in situ groundwater remediation typifies a conjunctive approach for improved water resource use and management – will boost water security for about 30 000 people in communities in Ramotswa. Through implementing innovative remediation and sanitation technology that combines in situ groundwater remediation with improved sanitation, thereby protecting this water resource, groundwater can be used as potable water after minimal treatment. • Regional transboundary water information systems: The Climate Resilience Information Systems Project (part of the overall Regional Water Investment Programme) will support sustainable investments for reliable climate information and early warning systems. This will encourage investments that promote water resilience. Any final thoughts? Achieving sustainable financing for investments in water supply, sanitation and for the development, protection and restoration of national and transboundary water resources is the core focus of the SADC Water Fund. Current institutional arrangements are often inadequate, and the financing of water investments is often unsustainable. Also worth noting is low public capacity to finance required investments in the development and management of water resources, including protection and restoration. Lack of investment in water infrastructure has led to significant, economic, social and environmental losses. For the SADC region to see improvement in the performance in the water sector, facilities such as the SADC Water Fund are important.

Transboundary Water Information System