Southern Africa: SADC Member States Calls for the Establishment of an International Blended Investment Facility

26 September 2024
Namibia Economist (Windhoek)

By Michel Haoses.

Namibia, and 12 Southern African Development Community (SADC) Member States have called for the establishment of an international blended investment facility to unlock innovative finance solutions for long-term water security and climate resilience.

The initiative seeks to bolster the region's climate resilience by improving water management systems and is expected to benefit approximately 140 million people across the SADC region. The Project Preparation Facility (PPF) of the GCF will help develop the investment programme for leveraging at least USD 117 million.

According to SADC, the Member States include Angola, Botswana, Eswatini, Lesotho, Malawi, Mauritius, Mozambique, Namibia, Seychelles, South Africa, the United Republic of Tanzania, Zambia, and Zimbabwe.

These Member States, as well as the SADC Secretariat, Development Bank of Southern Africa (DBSA), and the Global Water Partnership Southern Africa (GWPSA), are working together to develop a coordinated regional approach to climate-resilient water investment as part of the SADC Regional Climate Resilient Water Investment Programme (SADC-AIP): Climate Hydrological Cycle Observation System, which is funded by the Green Climate Fund (GCF).

The SADC-AIP initiative is part of the Continental Africa Water Investment Programme (AIP), adopted by the African Union Heads of States Summit in 2021 whose goal is to bridge the water investment gap, enhance climate resilience, and promote sustainable sanitation for a prosperous and peaceful SADC region.

While attending the programme's three-day inception training and workshop in South Africa, Pretoria, Member State representatives noted the region's over-reliance on external funding sources, including grants and official development assistance, to finance hydro-climatic information and hydrological monitoring systems, highlighting the urgent need for more sustainable and innovative financing solutions.

The delegates agreed that private sector involvement in climate-resilient water investments remains limited due to the perceived risks, long payback periods, and challenges in predicting returns.

The meeting also discussed various other options including Blended Water Financing Platforms which aggregate resources from multiple public and private sources to finance a portfolio of water projects; and Water Credit Enhancement Mechanisms which act as guarantees and insurance to reduce the risk for private investors in water projects.

Moreover, the United Nations Capital Development Fund (UNCDF) announced its availability to leverage its Flagship Catalytic Blended Financing, to crowd in finance for the scaling of development impact where the needs are greatest, and support country efforts for the establishment of a blended investment facility.

Read the original article on Namibia Economist.

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