CONVERTING SOUTH AFRICA’S WATER CHALLENGES TO SUSTAINABLE
TECHNOLOGIESUNIDO WATER BUSINESS SEMINAR
13 November 2014
Green Innovation Expo 2014, TOKYO, JAPANMs. Tshepo Makhene
Managing Director, Afrolink Enterprises (Pty) Ltd.

Downtown Johannesburg from the top floor of Ponte City

SOUTH AFRICA AT A GLANCE

There are 54 countries in the African Continent!

INTRODUCTION TO

LOCATION:Southern Africa, at the southern tip of the continent of Africa

 Middle-income, emerging market with abundance of naturalresources.
 Well developed financial, legal, communitcations, energy andtransport sectors and JSE which is 16th largest in the world.
 GDP growth in 2014 projected at 1.4% - while growth isexpected to reach 3% according to the Medium Term Budget
Policy Statement by the Minister on Finance on 22/10/2014.
 25% Unemployment
Export partners:
China, US, Japan, Germany and India (2012)
Import partners:
China, Germany, Saudi Arabia, US and Japan

Source: CIA World FactBook

 According to Census 2011 data from Statistics South Africa,in 2011 the country's population was 51,770,560 of which
26,581,769 (51.3%) were female and 25,188,791 (48.7%)
were male. Africans are in the majority at just over 41million, making up 79.2% of the total population.
 13.3 million households have 1access to clean water (DWA)
 South Africa has 9 provinces and 283 municipalities.
 Gauteng province is the most densely populated at 12million people.

SOURCE: DEPARTMENT OF WATER AFFAIRS Water scarcity is one of the greatest challenges in the 21st century affecting
every continent.
 According to Research Channel Africa year book, It is estimated that by2025, about 2.8 billion people in 48 countries will face water scarcity.
 In terms of the Millennium Development Goals Report of 2014: “Access toan improved drinking water source became a reality for 2.3 billion people.
The target of halving the proportion of people without access to an
improved drinking water source was achieved in 2010, five years ahead ofschedule.
 In 2012, 89 per cent of the world’s population had access to an improved
source, up from 76 per cent in 1990. Over 2.3 billion people gained
access to an improved source of drinking water between 1990 and 2012.

 Water scarcity is one of the greatest challenges in the 21st century affecting
every continent.
 According to Research Channel Africa year book, It is estimated that by2025, about 2.8 billion people in 48 countries will face water scarcity.

South Africa’s situation: Water supply is limited and demand is increasing due to the growing
population.
 The country is challenged due to below average rainfall and thereby
depends much on the transfer of water from neighbouring Lesotho.
 The country faces various challenges with regard to the management of its
water resources.
 Security of supply, environmental degradation, resource pollution andineffiecient water use are some of the current challenges.
 Projections have indicated South Africa’s water demand could outstrip
supply between 2025 and 2030.

 Global experts convened under the auspices of the WEF, estimates thatdemand in South Africa will increase to 17.7-billion cubic metres in 2030
while supply will amount to only 15-billion cubic metres.
 A Johannesburg Water Report has warned that South Africa’s key businesshub could face water shortages by 2015, unless the City of Johannesburg’s
demand is reduced.
 Some experts have identified technical and institutional challenges as
undermining water service delivery.
 Government acknowledges that the sustainability of the country’s
freshwater resources has reached critical point and that water
management is at a crossroads.
 To deal with this eminent crisis, 89 hotpots requiring urgent attention wereidentified and a total of USD 65 million was allocated to municipalities anda part of which has been set aside for sanitation infrastructure.
 Water boards were appointed as implementing agents to drive the projects.

 As a water-scarce country, South Africa is facing funding challenges tobetter distribute water and improve water resource management.
 Non-revenue water is one of SA’s biggest challenges. A study conducted by
the Water Research Council (WRC) on 132 municipalities has shown that
37% of purified water destined for urban areas has been lost between 2008
and 2014 due to leaks, old and failing infrastructure and other reasons.
 This loss amounts to 1.6-billion cubic meters of water a year, valued at at
USD 1.1-billion worth of water a year.
 The WRC also states that on average small municipalities lose 72.5% ofwater, medium sized 30.5% - 41.3% and metros about 34.3%.
 Government is now putting measures in place to try and reduce thiswastage of water.

 DRINKING WATER SOURCE:
Improved:
Urban: 99.2% of the population
Rural 88.3% of the population
Total: 95.1 of the population
Unimproved:
Urban: 0.8% of the population
Rural: 11.7% of the population
Total: 4.9% of the population 2012 (est.) SANITATION FACILITY ACCESS:
Improved:
Urban: 81.7% of the population
Rural: 62.4% of the population
Total: 74.4% of the population
Unimproved:
Urban: 18.3% of the population
Rural: 37.6% of the population
Total: 25.6% of the population 2012 (est.) The world average water consumption is 173 litres per person perday. The average per capita water consumption in South Africa is235 litres.
 SA has an average annual rainfall of ~500mm (60% of the worldaverage) Only 9% rainfall reaches the rivers, compared to a world averageof 31%.
 Orange River has the highest discharge at 22% of total water inSA, this includes the Vaal River which is a tributary Acid mine drainage in Gauteng, especially West and East Rand ofCity of Johannesburg – a metro Incapacitated water treatments such as Umgeni River (KwaZulu
Natal), resulting in constant contaminated by sewage The National Development Plan (NDP) identified the need to
expand water access along the supply chain starting withinvestments in dams, bulk water supply schemes and waste
water infrastructure.
 Developing and maintaining new and existing water andwaste water infrastructure is one of government’s priorities
and the Presidential Infrastructure Coordinating Committee(PICC) has listed water and sanitation among its 18
strategic infrastructure projects.
 Government plans to increase water infrastructure
investments over the medium term expenditure framework
period with bulk water infrastructure identified as priority
investment area.

PROJECTS ON THE GO:
 In March 2014, the USD 1.5 billion, 2nd Phase Lesotho
Highlands Water Project (LHWP) was launched. This phasealso includes the construction of a hydropower generation
system.
 In April 2014, the USD 1.2 billion Mzimvubu water project waslaunched in the Eastern Cape. The project includes theconstruction of two dams and hydropower and the project isabout to start.

TCTA
 is a state owned entity, and it provides project finance and project
management for bulk water infrastructure projects.
 Since its inception it has implemented a number of bulk waterprojects.
RAND WATER
 is an organ of state, reporting to the Department of Water &Environmental Affairs.
 Throughout its long history, Rand Water has remained financiallyself-sustaining. Its financials are affirmed by Standard & Poor’s
rating of its long-term local currency, corporate credit rating as A+
and its long-term foreign currency, corporate credit rating as BBB+.

Area Of Supply Rand Water’s distribution network includes over 3,056 kilometersof large diameter pipeline, feeding 58 strategically located service
reservoirs. Its customers include metropolitan municipalities,
local municipalities, mines and industries and it supplies on
average 3,653 million liters of water to these customers daily.
 Its customers include metropolitan municipalities, local
municipalities, mines and industries and it supplies on average
3,653 million liters of water to these customers daily.

Berg Water Project
The R1.6- billion flagship Berg Water Project in Franschhoek augments the supply of water
to the City of Cape Town. In March 2009 it was officially inaugurated by former President
Kgalema Motlanthe. It was mandated in May 2002 and became operational in December
2007.
Source: TCTA website

Komati Water Scheme Augmentation Project
The Komati Water Scheme Augmentation Project (KWSAP) has been designed to resolve
the water supply problems to Eskom's Duvha and Matla power stations in Mpumalanga. It
augments the Komati Water Scheme from the Vaal Eastern Subsystem for the sole benefit ofEskom.
Source: TCTA website

Acid Mine Drainage
Acid Mine Drainage is a project aimed at implementing the short term action plan, as
recommended to the Inter-Ministerial Committee on Acid Mine Drainage, in the Western,
Central and Eastern Basins of the Witwatersrand Goldfields. Construction Started inNovember 2011 on the refurbishing the Rand Uranium plant in the Western Basin andcommissioning was due to commence in April 2012.

Lesotho Highlands Water Project Phase 1
The Lesotho Highlands Water Project was instituted as a bi-national project spanning theborders of South Africa and Lesotho in accordance with a treaty signed in 1986. This almost
miraculous engineering feat diverts water from the Senqu River System in Lesotho to South
Africa's economic hub, the water-stressed Gauteng region.
Source: TCTA website

 National statistics reveal that 85% of households haveaccess to RDP acceptable levels of water. However, inKwaZulu Natal, 14.1% of households never had access towater.
 National statistics also revealed that over 70% ofhouseholds in South Africa have access to RDP acceptable
sanitation. However, 12.5% of households in the Eastern
Cape do not have access to any sanitation.
 The above implies that private sector investors should
consider partnering with Government to close the gap in thequest to provide universal access to the population andmake a reasonable return.

 Recent interruptions in the water supply in Gauteng is proof that
opportunities exist for private sector participation especiallyforeign investors who bring with them advanced technologies
and technical know-how which is highly needed to deal with thecurrent water crisis.
REQUIREMENTS FOR PRIVATE SECTOR PARTICIPATION:
 Registered company in South Africa
 BEE compliant
 Projects are on a tender system
 Tax registration a must
Government support for investors:
 There are a number of incentives provided by government toassist interested companies and potential investors.

 Top ranked universities State of the art airports
 State of the art golf courses
 Estate residences
 Shopping centers
Japanese companies in SA:
Toyota, Nissan, Mitsui, Sumitomo, Sunace, Bridgestone,Kansai Paint, NTT to name a few

Is your company ready to live the South African dream? If so,stand up and be counted!!!

AFROLINK ENTERPRISES (PTY) LTD. as a PARTNER
Afrolink Enterprises (Pty) Ltd. was established in September
2013. It is a 50 - 50 joint venture partnership.
Shareholders:Ms. Tshepo Makhene 50% ownership
Mr. Ryo Sasaki, Group CEO of Sunace - 50% ownership
Services rendered:Investor services
Business to business matchingResearchBusiness tourism
Equity partnership sourcing
Access to Afrolink’s networks both in government and private
sectorAFROLINK ENTERPRISES (PTY) LTD as a PARNTER
Afrolink Enterprises’ mission is to deliver World Class and quality
service to our clients
STRATEGIC PARTNERSHIPS:
Water & Sanitation Infrastructure projects:
Ms. Khumbuzile Zuma, MSc Management of Social Change andAgricultural Systems, Wageningen Agricultural Research University(WUR), the Netherlands
Energy & Construction Infrastructure projects:
Ms. Lorato Dlamini – Electrical Engineer
KPES (Pty) Ltd.
www.kgatelelopele.co.za

AFROLINK ENTERPRISES (PTY) LTD. as a PARTNER (Cont’d.)Academic Partnerships:
Prof. Sabelo Mhlanga, PhD (WITS)Associate Professor: Department of Applied Chemistry
University of Johannesburg
sdmhlanga@uj.ac.za
Japan link: Currently in negotiation with a local partner to offer awhole suit of services (turn-key solutions) to Japanese investors
Clients:
A. Hartrodt SA (Pty) Ltd – Afrolink is offering advisory services

The DARK continent

The Economist May2000

If you want real growth Africa is the place
to be!
The happening continent

THANK YOU