Investment in Water Infrastructure Brief June 2025

It is widely recognised that South Africa is facing an increasingly serious water crisis. Unless this is addressed, it will not be possible to achieve South Africa’s economic growth and development goals. Traditionally, rising consumption of water has tracked the rate of economic growth. In order to decouple economic growth rates from rising demand for water, in a context of negative climate change impacts on the water supply system, it will be necessary to significantly increase investments in South Africa. This will mean increased capital investments in infrastructure assets, as well as increases in operational expenditure to significantly improve the overall quality of ongoing operations and maintenance. The report outlines three possible scenarios. The first is a ‘baseline’ scenario that essentially means achieving the water goals outlined in the Sustainable Development Goals (SDGs) and National Development Plan (NDP) using the existing combination of technologies and delivery processes. The total investment required to cover both capital and operational expenditure through to 2050 is R91 billion more per annum than current levels of investment. The second is the ‘sustainable scenario’, which entails various measures to use water resources more sustainably. The total investment required to cover both capital and operational expenditure for the sustainable scenario through to 2050 is lower than the ‘baseline’, at R75 billion more per annum than current levels of investment. Finally, a ‘worst scenario’ was assessed, which would essentially be business-as-usual but under worsening conditions, such as the continued decline of water services delivery at municipal level, or more severe climate impacts. The total investment required to cover both capital and operational expenditure for this ‘worst scenario’ through to 2050 is significantly higher than the ‘baseline’ at R149 billion more per annum than current levels of investment. In short, if nothing is done, costs will rise. Ten recommendations are provided to address the challenge of financing the lowest cost options that comprise the sustainable scenario.