Seth Onyango, bird story agency

Investors are diving into Africa's water sector, with Metito Utilities Limited (MUL) and British International Investment (BII) being the latest to announce their entry into the market.

The UK's development finance institution and the multinational utility firm have unveiled the Africa Water Infrastructure Development (AWID) venture that will develop climate-smart water projects at scale and increase water security across the continent.

AWID's innovative approach to water infrastructure and provision in Africa is expected to set a sustainable commercial model, boosting long-term investment in the sector.

The platform will incorporate cutting-edge green technologies and alternative energy components, reducing environmental impact for water infrastructure projects, according to officials at the launch of the initiative in Cairo on Monday (March 13).  

As it eyes promising returns, the platform –– the first of its kind in Africa –– will focus on countries most vulnerable to the climate crisis.

"As Africa undergoes rapid urbanisation, there is a pressing demand for water infrastructure. Such projects are particularly capital intensive," noted Rami Ghandour, Managing Director of Metito.

"An increasing funding gap requires mobilising sustainable investments into the sector. Our partnership with BII will leverage our high-value engineering and use of innovative technologies with access to unrivalled financial resources and support."

The launch came as Belgian impact investor Incofin Investment Management said it plans to open an investment to tap water funds in more African markets.

"Currently, we have identified Kenya, Senegal and South Africa as priority countries. We also have experience working in Nigeria, Rwanda and Uganda and believe that these countries align with our investors' risk appetite," Dina Pons, managing partner at Incofin, told the publication, How We Made it Africa.

"Additionally, we consider the presence of a robust pool of potential private sector companies and impact investor ecosystem when choosing which countries to invest in."

AWID's launch comes as climate-induced changes in the water cycle are impacting the provision of water supply to health, economies, and food, increasing inequality of water access.

The consortium aims to mitigate these impacts by integrating green technologies and alternative energy components, reducing the environmental footprint of water infrastructure projects.

One of the key assets under the new platform is an operational bulk surface water treatment plant in Kigali, which currently provides over 25% of the city's potable water supply, meeting the needs of 500,000 domestic, commercial, and industrial consumers.

The Kigali water treatment plant is a public-private partnership, the first of its kind under this business model outside South Africa.

With the launch of AWID, the consortium of investors aims to demonstrate that investing in water infrastructure can be both profitable and sustainable, providing a blueprint for other investors, governments, and operators to deliver operationally efficient and high-impact water infrastructure projects at scale.

However, investing in the water sector in Africa comes with unique challenges, including regulatory uncertainty and limited infrastructure.

With the launch of AWID, investors hope to overcome these obstacles and help increase access to water for millions of people in Africa.

In 2012, the British Geological Survey published a report that indicated that Africa has vast underground reserves of water spread throughout the continent, even under the Sahara Desert.

These aquifers hold an estimated 660,000 cubic kilometres of water, more than 100 times more than what is currently available through renewable sources such as lakes and rivers.

Still, according to the United Nations, over 300 million people in Africa lack access to safe drinking water and over 700 million lack access to essential sanitation services, making investing in Africa's water infrastructure not just a moral imperative but also a profitable business opportunity, as cities and towns grow.

According to the data platform Statista, the global water and wastewater treatment market had a value of 263 billion US dollars in 2020 and is projected to reach nearly 500 billion US dollars by 2028, due to the growing demand for clean water.

bird story agency