Benefits Flow from Public-Private Water Partnerships

March 24, 2022

Across Africa innovative partnerships between governments and private operators manage sewage and deliver water to vulnerable communities    

Clean water. It is a basic requirement for health and prosperity that should be available to everyone.

However, worldwide, about 771 million people lack basic access to improved water and sewage services. In sub-Saharan Africa, just over half the population use safe drinking water, while in vulnerable and predominantly rural areas the number is less than a quarter.

Providing reliable, affordable water services has proved a longstanding challenge for many African countries. This is because modern sewage and water purification plants and associated delivery networks are complex and require significant capital investment, which impacts the fiscal space of most African governments. The fallout from inadequate water infrastructure can include numerous health issues. A lack of easy access to water also places an oversized burden on women and girls, who are often tasked with the tough and time-consuming job of collecting fresh water from wells and boreholes, distracting them from study or other work.

African governments are increasingly looking at public-private partnerships, known as PPPs, to improve access to water and sewage services.  PPPs combine the skills and resources of the public and private sectors, with private investors delivering capital and know-how, and governments providing water rights, land, and other services.

“A public-private partnership presents a number of benefits such as, but not limited to, increased transparency of procurement processes, access to private sector finances and expertise and better allocation of risk between partners,” says Dennis Gatera,  Head of the Transaction Structuring Division at the Rwanda Development Board, a government entity that supports private investment in the country.  

In Africa, IFC’s PPP Transaction Advisory team is working with governments, including Rwanda, to craft well-structured, high impact water and sewage projects, and to attract private partners to deliver them.

In Uganda,  for example, IFC supported the government to implement a project to pipe water in Busembatia through 700 distribution stations, eliminating the town’s reliance on contaminated dug-out well sources that had led to disease and economic decline.

For Kasifa Naiumesi, a street food vendor in Busembatia, the system reduced the time it takes her to collect water and ensures her food is safe to eat. “Everything I prepare in my business uses water,” she said.

Water is also essential for agriculture. In central Morocco, the landscape and economy was transformed by the world’s first irrigation PPP. IFC structured the drip irrigation project that brought nearly $40 million in private investment into the region. A consortium led by Omnium Nord-Africain (ONA), a Moroccan industrial conglomerate, won the 30-year concession to bring water to Guerdane, where citrus farmers had depleted underground aquifers and reduced groundwater.

“Many people, especially the farmers, left the region because they couldn’t make a living,” said Youseff Jebha, from the Guerdane farming cooperative.   

Now, more than a decade after the PPP was launched, the community is producing more and better quality citrus fruit on 10,000 hectares of land irrigated by surface water from a dam 90 kilometers away. Jobs within the Guerdane cooperative more than tripled to 500 as the irrigation system enabled production to rise from $5 million to $25 million annually.

Fast-growing cities

Sewage treatment is another vital part of water systems. In Egypt’s satellite city New Cairo, a water treatment plant is managing the community’s wastewater and sewage, while also supplying treated wastewater to irrigate farms. The PPP, Egypt’s first, was designed, constructed, and is being operated by a private company. Well-crafted sewage projects can provide treated wastewater not only to farmers, but to industries for their manufacturing processes, freeing up potable water for homes, schools, and food preparation facilities.

These PPPs not only provide water services, they create jobs and opportunities for all, including women. In Rwanda, Michael Opagi, Africa regional manager of IFC’s PPP Transaction Advisory, was inspired when he saw a women engineer in charge of crucial aspects of the construction of Africa’s largest competitively sourced bulk water supply PPP.

“The project sponsor prioritized employment of women, ensuring PPP water projects support communities on multiple levels by providing quality jobs to talented professionals,” he said.

The Kigali bulk water project is boosting the city’s potable water supply by 40 percent by providing the national utility with 40,000 cubic meters of potable water every day – equivalent to 16 Olympic-sized swimming pools.

The plant, the first competitively selected bulk surface water supply PPP in sub-Saharan Africa outside of South Africa, is helping Rwanda reach its goal of universal water access by 2030. It is an example of how bulk water PPPs help reduce water shortages by providing more water to the public distribution system.

The project was competitively awarded to Abu Dhabi-based Metito Group, a global provider of water management systems with a focus on sustainability. Metito designed, built and now operates the $61 million project under the concession.

IFC provided advisory support to help Rwanda’s government structure the project and run the competitive tender.

“When I look at the Kigali project, I can see that this is a better path for future of Africa’s growing cities. It’s not just water – it’s growth, it’s health, it’s opportunities for women, and for a better future for all,” said Opagi.

Published March 2022