Establish Water Reuse Infrastructure as an asset class to improve sector resilience and attract private sector capital to close the financial gap
7 Nov, 2023

Johann Lübbe – Head: Water Partnerships Office, Development Bank of Southern Africa (DBSA)


Water scarcity and climate change pose unprecedented challenges to our region’s sustainability. Addressing these challenges demands innovative approaches that go beyond traditional technical and funding mechanisms. To tackle these issues effectively, we must establish water reuse infrastructure as an asset class, attracting private sector capital and ensuring sector resilience.


Unlocking private sector investment for climate change initiatives


The financial gap in addressing water-related issues and climate change is undeniable. Public funding alone cannot bridge this gap. To truly make a difference, we need to leverage private sector investment in a blended finance manner by developing bankable projects with innovative financial instruments that encourage private participation across key sectors.


At the DBSA, we have successfully implemented programmatic approaches for initiatives like the Climate Finance Facility (CFF), Embedded Generation Investment Programme (EGIP), and the Water Reuse Programme (WRP). These experiences have demonstrated the effectiveness of structured, systematic, and comprehensive strategies to mobilise private investment in critical and strategic infrastructure. By building on these successes, we aim to expand our efforts to transform water reuse infrastructure into an investable asset class.


Programmatic approach – the proven path to success


Our experience with the CFF, EGIP, and Water Reuse Programme has revealed several key insights that can be applied to establishing water reuse infrastructure as a new asset class:


  1. Structured framework – a structured framework / standardised approach allows us to set clear objectives and define the rules of engagement, creating a level playing ground for all stakeholders. This standardised approach / framework provides the necessary certainty to attract private sector investment.
  2. Risk mitigation – understanding and mitigating risks are important in gaining the confidence of private investors. We have seen that comprehensive risk assessments and appropriate risk-sharing and mitigation mechanisms can significantly reduce investment hesitancy.
  3. Incentivising investment – tailored solutions , such as grants, concessional funding and regulatory support, can make investing in water reuse projects more attractive to the private sector.
  4. Data-driven decision making – robust data and analytics are essential for effective programme implementation. They help identify investment opportunities, measure outcomes, and adjust strategies as needed.


Water reuse infrastructure as an asset class – the way forward


By establishing water reuse as an asset class, we are laying the foundation for a sustainable, resilient water sector, by diversifying the water supply mix. Private sector investment will not only contribute towards filling the financial gap but also bring in expertise, innovation, and efficiency. A programmatic approach, similar to our previous successes, can guide us on this transformative journey.


Conclusion – a brighter future through water as an asset class


As we stand at the crossroads of water scarcity and climate change, the journey to establishing water reuse infrastructure as an asset class is an imperative one. The financial gap we face demands innovative solutions, and catalysing and leveraging private sector investment is the key.


Our proven programmatic approach, as seen in the successes of the Climate Finance Facility (CFF), Embedded Generation Investment Programme (EGIP), and Water Reuse Programme, provides a clear roadmap. By applying a structured framework and standardised approach, mitigating risks, incentivising investment, and utilising data-driven decision-making, we can transform the water sector.


The Development Bank of Southern Africa (DBSA) is committed to this transformative journey. We understand the significance of water as more than a resource, it is an opportunity for change, resilience, and sustainability. Together with private sector partners, government institutions, and our communities, we can bridge the financial gap, enhance sector resilience, and secure a brighter and more sustainable future for all.


By establishing water reuse infrastructure as an asset class, we not only address the challenges of today but also build a legacy for generations to come, ensuring that water remains a cornerstone of prosperity, resilience, and sustainability in South Africa and the Southern African region.






@Johann Lübbe
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