A South African state development bank said it has received $235 million (4.3 billion rand) in financing from the Green Climate Fund, which it estimates will allow it to create a water reuse infrastructure fund six times that size.
The South African Development Bank and Green Climate Fund said in a statement on Tuesday that the money will be channeled into the blended financing instrument, which brings together public and private funds, to address growing water shortages in South Africa through increased water reuse.
The cash injection is expected to help launch a water reuse program in South Africa.
“At the core of the Water Resources Program is a blended financing solution that brings together actors in the private and public sectors,” the foundations said in the statement. “As the WRP matures, the project’s bonds will be used” to raise financing, they said.
Years of neglect have left the country experiencing daily power outages, while the quality of water provision has declined. At the same time, South Africa is trying to make itself more resilient to climate change with most of its land expected to become hotter and drier over the coming decades. It is already the fifth water-scarce country in sub-Saharan Africa, according to the World Bank.
DBSA requested a mix of loans and grants from the Green Climate Fund when it applied. About $200 million will be in the form of a loan, while the remaining $35 million is a grant, according to the Green Climate Fund’s website.
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