Water treatment and management opportunities in South Africa

Water treatment and management opportunities in South Africa

Sep 22, 2016
Clean water
Water technology
South Africa

South Africa has limited water resources. Hence, the government of South Africa has sited water issues as a top priority in its long-term National Development Plan 2030.

The country aims to ensure that all of its citizens have an access to clean water. According to the development plan, public infrastructure investment at 10 per cent of GDP will focus on transportation, energy and water. Business opportunities for water treatment and management solutions are found in the whole country, especially in the Western Cape and Rustenburg area.

The interest for Finnish solutions is two-fold.

Firstly, opportunities are identified in the local mining sector, where significant challenges for industrial water treatment are present. Secondly, plenty of potential is embedded in the municipal water treatment, where an upgrade is needed in many places.

Mines and municipalities

The mining industry – main industry sector in the country – needs water for its processes. At the same time, pressure on the mining companies to fulfill environmental licenses of the mines is growing. The South African Ministry of Water Affairs is working to get the mines to follow the National Water Act. In March 2015, 96 mines were still operating without valid water-use licenses, and 56 of them had not yet applied for a license. There are international companies that fulfill the requirements but many others still have a lot of work to do. Mining companies can lose their license if they don't fulfill government's demands.

At the municipal level there are remarkable water supply breaks even in the modern cities, such as Johannesburg. In most of the municipalities waste water treatment is unsatisfied and solutions are needed. Municipalities are struggling to maintain the high quality of drinking water and to fulfill expected service delivery. Certain municipalities and private developers are seeking alternatives to large, centralized and capital-intensive wastewater treatment systems, due to the plant capacity constraints and limited budgets. These alternatives include small-scale distributed solutions, which are particularly relevant for the urban fringe areas. In addition, smart metering and ICT in the water sector seem to get more common, and thus provide opportunities.

Focus of the public sector

The 2016 budget of the Ministry of Water Affairs allocates around EUR 870 million (ZAR 15 billion) to water and sanitation projects in the medium term. Ultimately, it is estimated that the capital investments in new water and sanitation infrastructure will be as much as EUR 39 billion (ZAR 670 billion) for the entire value chain, including the refurbishment of existing infrastructure over the next ten years.

In 2015, about 45 percent of the projected budget allocations were funded. In general, these investments are funded from on- and off-budget sources through partnerships with the private sector.

The focus of the South African investment in the water sector:

Institutional capacity building, operations and maintenance, water demand and asset management, financial planning and management, policies and planning for an enabling environment
Unsatisfactory (waste) water treatment, acid mine drainage, droughts and floods due to climate change
Infrastructure backlogs, service delivery, promoting sanitation and health.

Next steps

Deputy Minister for External Economic Relations, Under Secretary of State Matti Anttonen will travel with a Team Finland company business delegation to South Africa between the 17th and 21th of October.

The company delegation to South Africa is planned to have a focus on the mining, water and energy sectors.

There has been interest from Western Cape Government's non-profit Green Cape as well as from City of Tswane / Pretoria to see how Finnish solutions could help to resolve water and waste water challenges.

The BEAM program can offer a good start up financing for common project development in the water sector. Innovative Finnish technology is in a new environment, where cooperation with local partner is definitely needed.

There is also a Team Finland business delegation with Minister Kai Mykkänen travelling to Egypt in end of September.

More information

Heta Pyhälahti

Head of Trade Center

Companies in the sector