Transfrontier Projects: SADC Water and Sanitation Fund

SADC, KfW and the DBSA entered into a financing and project agreement on 18 December 2012, mandating the DBSA to serve as project executing agency responsible for managing its Regional Fund for Water. SADC and the DBSA further entered into an agency agreement on 5 May 2014, which mandates the DBSA to manage and implement the start-up phase of the Regional Fund for Water infrastructure and basic sanitation. The fund was established to strengthen the water sector coordination function of SADC and create an instrument to channel international cooperating partner contributions to the SADC water sector.

Its objective is to develop regional water and sanitation infrastructure. Through IDD, the DBSA is responsible for overall programme management and implementation of the fund. This responsibility entails the establishment and supervision of the project implementing unit, procurement, provision of back-office support, reviewing regional investment project proposals, and concluding financing agreements with the governments of the relevant countries and the project sponsor.

Project objectives

  • Facilitate the implementation of integrated water resources management and develop related infrastructure in SADC
  • Improve collaboration of member states on joint water sources
  • Provide affordable, economically viable and socially sustainable access to safe water supply to the poor in SADC member states.

At the end of 2017, the programme identified and approved two projects - one in the Zambian border town of Kazungula, and a cross-border project in the border towns of Lomahasha in Swaziland and Namaacha in Mozambique.

The criteria used to select these projects included:

  • Pro-poor impact
  • 10% co-contribution from member states
  • Projects that are part of an integrated national or regional water masterplan
  • Projects that are aligned with the integrated water resources management concept
  • Environmental and social impact assessment aspects
  • Economic viability.

Kazungula Water Supply Project

Kazungula Water Supply Project is situated in the small border town of Kazungula in Southern Province of Zambia where Zambia, Botswana, Zimbabwe and Namibia converge. The project comprises the construction of water treatment works, bulk water supply works and a water reticulation network. The current water and sanitation infrastructure is not adequately serving the town’s population of about 5 500 people. The project is expected to benefit approximately 12 500 people by 2024. The geographic location of the project is significant, as the construction of a new cross-border bridge over the Zambezi River will connect Zambia and Botswana, opening a regional trade corridor. The project will ensure that the town is able to cope with the demand for water and sanitation services by locals and people in transit. A feasibility study was prepared in March 2018 and will be updated with the assistance of the Climate Resilient Infrastructure Development Facility of the Department for International Development UK.

Lomahasha-Namaacha cross-border water supply project

Located in the mountainous region between Swaziland and Mozambique, the project will provide water services to both Lomahasha in Swaziland and Namaacha in Mozambique as well as the population in transit between the two countries. Both border towns are located on the top of a mountain range, making water supply difficult and expensive. The project will comprise the installation of rising mains from Simunye to Namaacha Reservoir in Mozambique and Lomahasha Reservoir in Swaziland, and includes construction of two booster-pumping stations along the pumping main, construction of a reservoir in each town and the rehabilitation of the distribution systems in each town.

Review of progress

The project management board established with KfW agreed to finance phase one of the project to the value of €8 million. A financing agreement between the DBSA and the governments of Mozambique and Swaziland is currently being finalised. Due to the complexity of implementing a regional project with cross-border and international stakeholders, the SADC Regional Fund for Water Infrastructure has put in place comprehensive implementation and oversight structures. SADC established a project steering committee to supervise the fund and provide strategic oversight. Funds are channelled to the DBSA as project executing agency.

The DBSA established a programme implementation unit (PIU) to oversee day-to-day coordination, implementation and management responsibilities. Over the past four years, IDD has packaged the projects and facilitated signing of the funding agreements with member countries.

Progress in identifying quality projects that meet the SADC fund’s criteria has been very slow due to inadequate technical capacity at implementing agent and utility levels in the countries concerned, and complexities associated with cross-border stakeholders’ mobilisation. However, although the projects are still in initiation and implementation, progress achieved to date indicates the fund’s objectives are most likely to be met. Going forward, to ensure the success of this programme, the fund will intensify stakeholder mobilisation to sensitise member states, emphasising the benefits of the fund and their role in accessing the benefits.

Lessons learnt

  • Implementation of regional projects requires the commitment of national governments and country contributions in the form of staff, finances and tax exemptions, which are achieved through negotiations and signing of formal cooperation agreements such as financing, implementation and water sharing
  • Financing through a fund structure allows for collaboration and harmonisation of standards and benefits across the region as opposed to a project-financing approach
  • The coordination of cooperation and collaboration in a transfrontier project requires an executing agency to be sensitive to the dynamics of individual member states.