Economic Accounting for Water to show these relationships.
The sources of finance for projects in the SADC Water Sector can be summarised as follows:
Domestic investors who bring debt and equity finance;
International power developers who bring equity finance as well as the capacity to borrow the
debt finance;
Multilateral financing agencies such as the World Bank, AfDB;
Development banks such as the DBSA;
Commercial banks that can offer long‐term financing;
Donor funding usually available for capacity building and enhancement, studies and
institutional start‐up co‐finance;
Private funding;
Public‐private partnerships;
Concessional loans;
Domestic fiscals (budgets); and
The clean development mechanism (carbon credits) for hydropower projects.
One key issue about investment is that the returns must be commensurate with the risks that are
being offered. It is therefore critical that when projects are being developed, there must be a clearly
defined strategy that can show that the project makes business sense, and that its promoters have a
good understanding of the risks and have identified the measures required to mitigate those risks.
Further, there has to be a sufficient revenue stream to cover all the financial demands of the project,
including a return for the investor. The risks should be borne by the institution or organisation best
placed to manage the risk. The timely provision of finance will also be a major challenge for the
implementation of all funded projects.
Table 3.7: Sources of ICA Funding to the Water Supply Services Sector. (Adapted from ICA 2011)
6
FINANCING RECEIVED US$(x10 )
REGION
2006
2007
2008
2009
AVERAGE
POPULATION (x106)
$/CAPITA
Central Africa
229
252
359
347
297
39
7.62
East Africa
489
708
625
374
549
193
2.84
North Africa
360
619
722
450
457
213
2.14
Southern Africa
233
636
354
431
414
260
1.59
West Africa
553
588
514
586
560
302
1.85
3.2
Linkages to other RIDMP Sectors
The Water Sector, being a crosscutting sector, is linked directly or indirectly to all the other RIDMP
Sectors (Energy, ICT, Meteorology, Tourism and Transport) as follows:
3.2.1
Energy Sector
Water is required in the generation of hydropower, thermal power and in other renewable energy
generating sub‐sectors such as wave energy. Most multipurpose dams, if appropriately designed,
can produce hydropower through mini‐hydro installations. For development purposes, energy and
water are necessary core ingredients. For the SADC RIDMP, some of the Water Sector projects are
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