During October 2016, the eThekwini Municipality entered into 15-year loan agreements with the DBSA and the French Development Agency (AFD) to the total value of R700 million. These long-term loans were made possible by the Infrastructure Investment Programme for Southern Africa (IIPSA) with a contribution of a R93 million grant to eThekwini Municipality. The IIPSA programme is funded by the European Union and administered and managed by the DBSA’s Project Preparation Unit. The IIPSA programme is primarily aimed at preparing infrastructure projects but also has a component directed towards the implementation of projects that are ready for investment and meets the IIPSA criteria. This allowed the DBSA to crowd in and partner with other funders (IIPSA and AFD), thereby contributing towards funding a portion of the larger R3 billion Aqueducts Project.
The funding secured by eThekwini Municipality through the loans and grant will be directed towards the implementation of the Western and Northern Aqueducts project in eThekwini. The Aqueducts project is a bulk water supply pipeline that will improve the delivery of potable water to the western and northern regions within the Metro for the next 30 to 50 years. Funding provided will enable the eThekwini Municipality to also address backlogs for free basic water provision to around 100 000 indigent people. Completion of the Western and Northern Aqueduct projects will result in an assured water supply to over a million previously disadvantaged people living in the region who at present are faced with daily water interruptions as a result of capacity problems in the existing supply system.
The purpose of the IIPSA funding is, amongst others, to improve the affordability of water services to the communities within eThekwini Municipality, to fast track the implementation of the project as well as to enable the implementation of other critical water projects within the municipality. A portion of the IIPSA funding is earmarked for investment in ecological infrastructure linked to the Aqueducts project. This is the first IIPSA project that has resulted in a lending opportunity being created for the IIPSA participating DFIs.
The DBSA is proud to have partnered with IIPSA and AFD on this project and to be playing a part in providing much needed water infrastructure capacity within the eThekwini Municipality.