Private-public co-investment can fund the water infrastructure communities need

South Africa’s new National Water Action Plan, released in July this year, has put greater infrastructure funding, including private-sector investment, firmly on the country’s water agenda. The opportunity now is to ensure that this capital does more than meet individual commercial requirements by helping to build critical water infrastructure that also expands supply to surrounding communities. As a person who grew up in the arid Northern Cape, it is difficult to emphasise how important water access is to improved living standards and running a business, big and small.

This is especially relevant when industrial users such as mines, farms, power stations, and factories operate alongside growing towns and rural communities. Their needs are different, but they often depend on the same regional water systems.

Where those requirements overlap, co-investment can make it possible to plan larger infrastructure from the outset, combining public funding with commercial and institutional capital to create capacity that both supports economic activity and wider access to water. In this way, one shared infrastructure programme can keep industry moving, create jobs, and provide reliable water to communities in need.

The policy foundation for co-investment

The National Water Action Plan provides an important policy foundation for this strategy. It sends a clear message that institutional reform, financing reform, and immediate service delivery belong in the same national plan, where private and public sector, and societal interests all align. It explicitly identifies increased infrastructure investment, including through private-sector participation, as part of South Africa’s response to its water challenges.

This opens the door to build on co-investment models that are already being implemented in major water projects, and to consider where they could be applied more widely.

A model for co-investing exists and can be applied more widely

For example, the Olifants Management Model Programme (OMMP) and the uMkhomazi Water Augmentation Projects, scheduled for completion in 2030 and 2032 respectively, demonstrate two different approaches through distinct co-investment structures.

The OMMP is funded on a 50:50 basis by government and commercial water users, predominantly mining companies. The programme is designed to expand bulk raw and potable water infrastructure in Limpopo, supplying both commercial users and communities.

The uMkhomazi Water Projects combine a 25% government grant and 25% interest-free government loan with the remaining 50% raised from financial markets. The project is expected to increase water available through the uMngeni system and support municipalities across KwaZulu-Natal.

What makes these models significant is that they bring different sources of capital together, and that they demonstrate how substantial commercial water demand and public water requirements can be incorporated into the same infrastructure planning. And when the public sector aligns commercial demand with surrounding public needs, the number of lives changed at a human and community impact is significant, as more households and small businesses gain access to clean running water.

Large industrial users have a clear interest in securing dependable long-term water supply. At the same time, new bulk capacity can create opportunities to improve water access across the surrounding region. The greatest value therefore comes when these requirements are considered together from the beginning.

As a result, applying this model across the infrastructure development sector may become the decisive solution to meeting rural South Africa’s water goals and needs. The public sector can identify regions where these interests overlap and ask: ‘Instead of separately solving the industrial water and the community water requirements, can one enlarged system address both, and are commercial stakeholders able and willing to help fund the project?’

Where the answer is yes, commercial participation can strengthen the investment case while government ensures that public needs remain central to how the infrastructure is planned and delivered. As a result, regions with major mines, agricultural operations, industrial developments, or other large water users should be assessed for opportunities where planned commercial demand could support broader infrastructure development.

Likewise, industrial leaders must look beyond their own operational requirements and ask what the surrounding public need is. Where the two overlap, they should be willing to approach the public sector with a co-investment proposal that secures the capacity their operations depend on while helping solve a bigger regional challenge.

Used in this way, private capital does not replace public investment. It complements it, helping South Africa build larger shared systems that support economic development while expanding reliable water access to the communities around them.

South Africa's shift towards co-investment in water infrastructure should therefore become a deliberate model for building shared regional capacity. No single establishment, public or private, can fund the country’s water needs alone. By bringing public funding, commercial users, and long-term institutional capital together, projects can serve both economic growth and communities, turning private demand for water security into wider public infrastructure that benefits all.