- Blended finance investment to unlock construction of first two stages of the Olifants Management Model Programme.
- Project to improve water access for more than 390,000 people in Limpopo Province.
- Public and private capital combined to strengthen climate resilience in a key industrial region.
Climate Fund Managers has approved a USD 86.2 million mezzanine debt investment to support the first two stages of the Olifants Management Model Programme in South Africa, a large scale bulk water infrastructure initiative aimed at improving water security and climate resilience in Limpopo Province.
The investment is being made through the Construction Equity Fund of Climate Investor Two, a USD 1 billion blended finance facility supported by the European Union and the Dutch Fund for Climate and Development. The funding will help catalyse construction by strengthening the bankability of the project and unlocking senior commercial debt from mandated lead arrangers Standard Bank, Nedbank and Absa.
The Olifants Management Model Programme is being developed by the Badirammogo Water User Association to address long standing water supply constraints across the Northern and Eastern Limbs of the Bushveld Igneous Complex. The region is one of the most important mineral producing areas in the world and supports significant industrial activity, employment and export earnings, while also experiencing rising population growth and increasing climate related water stress.
Once operational, the first two stages of the programme are expected to improve access to safe and reliable water for approximately 390,000 people, representing around six per cent of Limpopo’s population. The infrastructure will also provide secure bulk water supply to mining and industrial users that underpin the regional economy.
The initial phases include the development of new bulk pipelines, water treatment works and supporting infrastructure. Renewable energy systems will be integrated to power the most energy intensive components, aligning the project with South Africa’s climate adaptation and emissions reduction priorities. The full programme will be delivered in six stages over the next decade.
Climate Fund Managers is a joint venture between Sanlam InfraWorks and Dutch development finance institution FMO. Its Climate Investor Two platform focusses on mobilising public and private capital for water, waste and ocean infrastructure across emerging markets.
According to Climate Fund Managers, the mezzanine investment plays a catalytic role by bridging the gap between public sector support and commercial finance. Earlier development of the programme was supported by USD 800,000 from the Climate Investor Two Development Fund, with a further USD 1.8 million allocated to prepare the second stage.
The project aligns with South Africa’s National Water Resource Strategy and its Nationally Determined Contribution, both of which prioritise water security, climate resilience and the modernisation of bulk infrastructure. A socio economic development programme will be implemented alongside the project, focusing on education, sanitation, enterprise development and improved wellbeing in surrounding communities.
The Olifants Management Model Programme is expected to become one of the largest and most significant water infrastructure initiatives in South Africa, demonstrating how blended finance can accelerate delivery of essential climate resilient infrastructure in water stressed regions.
Author: Bryan Groenendaal
