Johannesburg — IN ORDER to manage a looming water crisis, SA must use water more efficiently and rely on additional supply sources, according to a report released yesterday by the World Bank and McKinsey & Co .

The report examines four developing regions -- SA, China, India and São Paulo state in Brazil -- and projects the gap between water demand and supply for each, as well as potential solutions for closing the gap and the cost of those solutions.

While India should address agricultural productivity and China should examine its industrial base in order to save water, SA needs to apply a combination of these measures, and will also have to find additional sources of supply, according to the report.

Centres of water demand are often distant from additional supply. One demand centre is the Olifants Basin, a rich source of coal and the location of future mines and power stations.

Additional local measures can go only 47% of the way to closing the projected gap between demand and supply, and expensive inter-basin transfer schemes may be needed.

SA needs to invest 365m annually in capital outlay in order to implement a least-cost solution by 2030. But this capital expenditure would result in net savings of 150m a year by 2030.

Seventy percent of the investment would go towards additional supply measures, 13% each for industry and agriculture, and 4% for domestic and municipal uses.

Unexpectedly high economic growth -- where consumption per person would increase by up to 30% -- presents a further threat, and could result in a 330m net cost a year, rather than the net savings of 150m a year.

Climate change -- which is predicted to affect water availability in southern Africa -- could also result in a higher cost solution.

This would see the projected water gap increasing 31% by 2030, with the overall solution resulting in only 38m in net savings.

In the case of industrial solutions, more efficient technology can result in a saving of up to 340m by 2030.

Demand for water in SA is projected to reach 17,7-billion cubic metres by 2030, with household demand accounting for 34%.

But current supply amounts to only 15-billion cubic metres, and is severely constrained by low rainfall, limited underground aquifers, and reliance on water transfers from neighbouring countries such as Lesotho.

The energy-water nexus presents a further challenge. SA plans to double its power-generation capacity by 2025 through a combination of coal, gas, hydro, wind and nuclear power plants.

According to the report, dry-cooling technology is expected to be used, which uses 90% less water. However, it also is less efficient in cooling, and produces higher emissions.

This is at a time when SA is under growing international pressure to cut carbon emissions.