Page 43 - IDC

6 CITY PRESS, 23 JULY, 2017

business

A
PROJECT IN

PARTNERSHIP
WITH THE
ater is life. It can also drive WATER IN
economic growth – or constrain it
severely. IDC
Recognising water’s integral role NUMBERS
in advancing the industrialisation
Wof South Africa’s economy, the
Industrial Development Corporation (IDC) has put the SA’s average rainfall is
development and rehabilitation of water-related
infrastructure close to its heart. 490mm a year – 50%
Lizeka Matshekga, the IDC’s divisional executive of agro, of the world average
infrastructure and new industries, says the corporation
has realised it has to be more “deliberate in focus” to
60%
drive businesses to think differently about water.
“When it comes to water, people think of it as a 60%
natural resource; an act of God. But we must do what
we can to catch water and to also unlock existing water OF WATER IN SA IS USED FOR AGRICULTURE
capacity,” she says.
However, changing consumer attitudes towards
18%
conserving what many consider to be a free and always COMMITTED The IDC’s Lizeka Matshekga says there are many opportunities for entrepreneurs to help fix the worsening water
available resource seems to be an enormous task. situation in the country PHOTO: ELIZABETH SEJAKE 18%
“Water supply and stable infrastructure is a catalyst
for industrial development,” says Matshekga, adding
that three of the IDC’s core value chains – IS FOR ENVIRONMENTAL USE; 10.5% FOR MINING
agroprocessing and agriculture, metal industries, and The AND INDUSTRY; 11.5% IN HOUSEHOLDS
chemical industries – are reliant on a stable supply of
water.
305
“No matter how great a business proposal is, we will
only consider funding a new mining or agriculture- 305
related business if its owners have a water use licence.”
This is to comply with the regulatory framework. DAMS – OR 70% OF DAM CAPACITY – IN SA
Alluding to the devastating drought in the Western BELONG TO THE DEPARTMENT OF
Cape, she says this challenge can be successfully WATER AND SANITATION
harnessed to help drive a shift in attitudes towards the business
business opportunities it uncovers in the water sector.
40%
She cites Eskom’s load-shedding crisis, which
effectively wiped out the country’s first-quarter GDP for 40%
2008, as one of the biggest challenges in recent times
that helped transform consumer attitudes towards
preserving resources. OF THE WATER IN THE VAAL SYSTEM
“Those who didn’t see the value of mounting solar (GAUTENG’S WATER SOURCE) ORIGINATES IN
panels on their rooftops suddenly had to think about LESOTHO
where the power to run their businesses optimally of water
would come from.”
15%
The upside to this crisis, Matshekga says, is that it
helped to galvanise the IDC and private sector 15%
participation in government’s renewable energy
programme. Having helped derisk (removing business OF THE COUNTRY’S TOTAL WATER CONSUMPTION
risk) the renewable energy industry, the IDC has – in IS OBTAINED FROM GROUNDWATER
the past six years – commited R15.7 billion in support of The resource may fall from the sky, but when it
31 projects in the department of energy’s Renewable
4%
Energy Independent Power Producer Procurement
Programme. comes to harnessing its economic power, we have 4%
While a full-blown water crisis would spell doom for
many productive sectors of the local economy, she sees challenges to overcome, writes Gayle Edmunds
a silver lining. OF WATER RESOURCES ARE CONSUMED BY
“We need to encourage companies to adopt water- INVASIVE ALIEN PLANTS
efficient policies and programmes – to see the valve that stops toilet cisterns from leaking – all it does The other role the IDC will play is in facilitating the
opportunities in recycling water, like for use in the is stop the toilet from filling up past at a set level. It is participation of the private sector in solving the
37%
mines, or look at how acid mine drainage programmes both a quick fix and a preventative measure. challenges that an insecure water supply presents.
have unlocked opportunities for entrepreneurs.” Matshekga makes it clear that, when it comes to Getting business to work with government on solving 37%
The IDC has since identified opportunities for maximising our water usage across the spectrum, water supply problems will also have the effect of
entrepreneurs looking for a break in the water and anything that fulfils the IDC’s manufacturing mandate taking some of the strain off government when it OF WATER IS LOST IN URBAN AREAS DUE TO
sanitation management space. will be considered. The IDC is also developing comes to fulfilling its mandate to supply water to all LEAKS AND THEFT OF INFRASTRUCTURE
It is planning to use agroprocessing as a guinea pig programmes in place to ensure that companies that are South Africans as a basic human right.
15 000
to help draw potential and existing black industrialists heavy water users are more efficient. Although the IDC hasn’t yet had as much uptake in
to such projects. Usually, Matshekga explains, it takes 10 to 15 years the investment of bulk water infrastructure as it had 15 000
“We will be asking participants in this sector to for investors to reap dividends from a big infrastructure hoped, Matshekga sees opportunity. Just as insufficient
approach the IDC to help replace aged infrastructure. project, which is why the structure of the IDC’s power supply was a risk to the economy that the IDC
This is because 60% of the water in South Africa is packages are aimed at including traditionally excluded helped businesses transform into an opportunity, so PLUMBERS ARE BEING TRAINED TO HELP
used for agricultural purposes, such as for irrigating groups – black industrialists, youngsters and women. water has the same potential. It can kick-start new REPAIR AND MAINTAIN INFRASTRUCTURE
crops, and, if the system is old, water loss is extensive.” To reduce the barriers to entry, the corporation is ventures and drive innovation, which, in turn, will grow
1 900l
To illustrate just how water-intensive agriculture can working on structuring funding products that unlock the economy and see more people get jobs.
be, according to waterfootprint.org, it takes a whopping benefits for targeted participants during the “Authorities in the Western Cape recently announced 1 900l
1 222 litres of water to produce 1kg of mealies, 4 325 engineering, procurement and construction phases of plans to partner with the private sector to create a short-
litres to produce 1kg of chicken and 2 495 litres for one the long-term infrastructure projects, as well as during term emergency water supply using desalination, storm OF WATER IS USED TO PRODUCE ONE STEAK
cotton shirt. the operations and maintenance phases. In this way, it water capture or aquifer extractions as a stopgap to ease
One of the biggest obstacles to incentivising creates benefits for participants from inception, rather the crisis in that region. These are opportunities for
250l
companies to become more sustainable in their use of than expecting businesses to lock up capital for business to solve a problem and, in the process, facilitate
water is that the tariffs are so low. upwards of a decade. the creation of jobs,” she says. 250l
“It is a constraint to getting the private sector to
invest in upgrading infrastructure. Drought causes
people to think about water differently and we need to EXPERT OPINION OF WATER IS USED TO PRODUCE ONE
change people’s mind-sets – from water being free to it GLASS OF MILK
being a necessity. There are growing investment opportunities in the water sector sewage works in Amanzimtoti, a paper mill and a local oil
“If you consider water to be a commodity that could in South Africa, especially when taking into account that we will refinery. The mill and the refinery are buying treated sewage
35l
undermine the potential of your business, that should need 63 billion cubic metres of water a year by 2030. At the water – which costs less than potable water – for their industrial
change your perspective and how you use it.” moment, we have only 38 billion cubic metres available, says processes. Before this agreement was reached, the treated water 35l
To prepare for a programme to help people reassess local water expert Dr Anthony Turton, as parts of the country was discharged into the ocean.
how they think about water and how it affects their begin to recover from the worst drought in living memory. Turton also believes that the mining sector, especially coal OF WATER IS USED TO PRODUCE ONE APPLE
business, Matshekga says the IDC has spent the past It will cost about R700 billion to refurbish our current water mines, can become “producers rather than polluters” of water as
two years scoping out the external environment. It has infrastructure and, due to ratings downgrades, government part of their processes of dewatering their operations. SOURCES: DWS, WWF
explored acid mine drainage opportunities with private institutions might find it difficult to raise capital on the bond According to Turton, current legislation and regulations limit
sector developers an has looked at desalination market for big projects. business opportunities because the resource has been
opportunities with municipalities. It is also cooperating The decision makers in boardrooms are further realising that nationalised by the Water Act of 1998 with no official
with manufacturers who wish to use water more they can no longer regard water as a “given resource” that commercial value. He advises investors to make sure a secure TALK TO US
efficiently, and is looking for quick wins in the area of government will provide in abundance, so they are becoming offtake agreement is in place, and to internalise the risk If you were in charge of using our water resources
water infrastructure. more open to new approaches, says Turton. associated with having to renew water licences every five years. more efficiently, where would you start? SMS us
An example of a simple fix is a youth-owned One example is the offtake agreement between Durban south – Liezel de Lange 35697 with the keyword WATER SMS cost R1.50
company that the IDC funded. This company makes a

WE MUST ACT NOW TO TURN THE DROUGHT CRISIS AROUND

LIZEKA MATSHEKGA fresh water. The bulk of the water consumed in the
business@citypress.co.za province is drawn from the Maluti Mountains in Lesotho.
Added to this is the threat of ageing infrastructure and
South Africa is in the middle of a water crisis. You the widespread prevalence of acid mine drainage across
would assume that, after repeated warnings over the the Vaal Reef, which means the bulk of water in Gauteng
past few years by industry stakeholders, we would have is highly contaminated. Investing in the country’s water
changed our attitudes, heeded the call to preserve water security is certain to become a huge challenge, especially
and perhaps have invested in future-proofing the water as the crisis becomes replicated across other mining
needs of the country. towns in Mpumalanga, Limpopo and North West.
You would be wrong. Unlike electricity generation and Instead of focusing on the doom and gloom, this
supply, which requires copious investment of capital by should be a rallying cry for consumers, business and
power utility companies, water is considered to be a free civil society to invest in modern infrastructure and also
resource that can be tapped from a river, the sea or a help change consumer attitudes towards this resource.
borehole. Even better, rainfall is the primary source of Although the regulatory framework requires work,
this resource. existing legislation is a sufficient springboard to galvanise
Throw consumer and rights groups into the fray, and action.
the clamour of entitlement to this resource grows loud. 160 million cubic metres of usable water left – improving the quality of life and to poverty reduction, Policies such as the carbon tax also offer the private
Is it really necessary, then, for consumers to start paying representing a deficit of 84 million cubic metres of the may be undone by a double whammy of a possible sector the required impetus to be innovative in how it
tariffs for a resource that is considered to be a basic resource that must sustain the province until the next introduction of higher tariffs coupled with drastic water invests in infrastructure and saves water – after all, the
right? rainy season. Simply put, the Western Cape will require rationing. While this crisis is largely confined to the tax is aimed at encouraging sustainability and this
These attitudes typically sum up the mindset of South three consecutive years of above average rainfall to fully Western Cape right now, rising water demand across the should, in turn, create an environment for new
African water consumers. But this is already changing, recover from this drought. country – the result of an increasing population and the industries.
especially in the wake of a crippling drought in the The severe rationing of the water supply in the growth in the number of households using flushing Most of all, though, I would argue that the solutions to
Western Cape. Sadly, though, we are learning the hard Western Cape and other parts of the country is an toilets – makes this a national crisis. preventing a full-blown and nationwide water crisis are
way. For perspective, each person in the Western Cape indicator that water shedding in South Africa is a reality. Further compounding this is the rapidly depleting great opportunities for entrepreneurs with the
is currently allowed to use only 87 litres of municipal And it could fast become a regular occurrence. supply of fresh water – a challenge confronting the innovation and drive to build world-class water supply
water a day for drinking and washing. In some townships such as Gugulethu (where I come country’s economic hub, Gauteng. The province has a and treatment infrastructure.
Having used 243 million cubic metres of water in the from), Langa, Nyanga and Khayelitsha, years of progress massive population whose livelihoods are dependent on . Matshekga is the IDC’s divisional executive for
past year, the province now has slightly more than in the delivery of piped water, which has contributed to water-intensive industries, yet it barely has a source of agroprocessing, industrial infrastructure and new industries