A South African state development bank said it has received $235 million (R4.3 billion) in finance from the Green Climate Fund, which it estimates will allow it to create a water reuse infrastructure fund six times that size.
The money will go toward a blended finance instrument, which combines public and private funds, to address South Africa’s growing water shortage by increasing water reuse, the Development Bank of Southern Africa and the GCF said in a statement on Tuesday.
The cash injection is expected to help kickstart South Africa’s Water Reuse Program.
“At the core of the WRP is a blended finance solution that brings together private and public sector players,” the institutions said in the statement. “As the WRP matures, project bonds” will be used to raise finance, they said.
Years of neglect have left the country suffering power outages on a daily basis while the quality of water provision has slumped.
At the same time, South Africa is trying to make itself more resilient to climate change, with much of its territory expected to become hotter and drier over the coming decades.
It’s already the fifth-most water-scarce nation in sub-Saharan Africa, according to the World Bank.
The DBSA requested a mixture of loans and grants from the GCF when it applied.
Some $200 million (R3.7 billion) will be in the form of a loan, while the remaining $35 million (R645 million) is a grant, according to the GCF website.