SOUTH AFRICA: $250m Nedbank loan to support water supply in Limpopo

Faced with serious water shortages that are hampering industrial growth and limiting social development in the Limpopo region, one of South Africa’s nine provinces, the government is coming up with concrete solutions. To this end, in 2010 it launched the Mokolo Crocodile Water Augmentation Project (MCWAP) through the Trans-Caledon Tunnel Authority (TCTA), which aims to build two main bulk raw water transfer systems. Work on the first batch was handed over in June 2015. They included the construction of a pumping station at Mokolo Dam and 43km of new pipelines to Lephalale, which supply various end users.

The second phase of the drinking water project, MCWAP-2A, launched in June 2019, has just secured an additional R4.5 billion (around $250 million) in funding from Nedbank Corporate and Investment Banking (CIB). The loan was granted on 11 July 2024 by the South African bank. “We understand that access to water is a constitutional right, and this transaction is an example of how we are supporting the government to ensure the availability and sustainable management of water and sanitation for all,” said Phuti Mokwatedi, Nedbank’s Johannesburg-based Head of Public Enterprises. This component of the drinking water project is implemented by the GBN consortium, composed of three companies, namely: Gibb, Bigen Africa Services and Nyeleti Consulting.

According to TCTA, a total of 12.3 billion South African rand, or more than $674 million, will be needed to complete all the components of phase 2 of the drinking water project.

Production of 75 million m3 of water per year

Part of this water will be used to support two projects of the South African public electricity company Eskom. This is the Matimba coal-fired power plant with a functional capacity of 3,990 MW, commissioned in several phases between 1988 and 1993. The second project is the Medupi thermal power plant, still under construction, near the city of Illisras. It will have a capacity of 4,800 MW. More specifically, in the future Medupi power plant, the water will be used to operate the flue gas desulphurisation system.

Another part of the water pumped into the Crocodile River will go to the Grootegeluk open-pit coal mine in the Waterberg field, operated by South African mining giant Exxaro. The remaining water will be used to supply local municipalities.

“Water releases from dams on the Crocodile River (West) upstream of the Vlieëpoort catchment works will meet the water needs of MCWAP-2A. The dams identified as potential sources of primary water are Hartbeespoort and Roodekopjes on the Crocodile River (West), Roodeplaat and Klipvoor on the Moretele River (Pienaars) and Vaalkop on the Elands River. All current users expect demand for water to increase in the coming years,” says the TCTA.

After MCWAP-2A, two other phases will follow, involving the installation of an upstream pipeline to bypass the river if the conveyance losses prove excessive, and the implementation of a transfer scheme from the Klip River in Johannesburg to increase the flow from the Crocodile River if it turns out that the river’s surplus is insufficient to supply the system.

The people of the municipality of Lephalale in particular, and the Limpopo region in general, will be able to benefit from a continuous supply of drinking water from May 2026, the date of completion of the Mokolo Crocodile Water Augmentation Project (MCWAP).