IFU has just signed a grant agreement with the Western Cape Government’s Sustainable Infrastructure Development and Financial Facility (SIDAFF) Programme to support the development of critical municipal infrastructure projects in the Western Cape.
Insufficient water infrastructure maintenance, underinvestment in new infrastructure, and droughts and floods intensified by climate change are currently leading up to an imminent water crisis in South Africa. With a population growth of around 1,3 per cent per year, the country’s water deficit is projected to reach 17 per cent by 2030, potentially worsened by climate change.
Moreover, local municipalities, responsible for delivering essential services, often require additional capacity to develop bankable projects and struggle to attract financing on favourable terms. While municipal infrastructure is typically funded through national investment grants, demand far exceeds the resources available at the national level.
To address these challenges, IFU has granted up to DKK 14 million to the SIDAFF Programme via GreenCape Sector Development Agency, the local not-for-profit implementing partner for the SIDAFF Programme. The grant will enable the SIDAFF Programme to financially support the development of water and wastewater projects in intermediate-sized municipalities in the Western Cape.
Public partnerships for greater impact IFU’s involvement in the SIDAFF Programme stems from the Danish Embassy’s Strategic Sector Cooperation (SSC) programme, which, through close collaboration with South African partners, laid the groundwork for IFU’s engagement. This achievement showcases how strong partnerships between local stakeholders, the SSC programme, and IFU’s investment mandate can deliver real impact, while advancing Denmark’s foreign policy, economic diplomacy, and development goals.
Working closely with the Danish Embassy, the Western Cape Government and co-sponsor Swiss State Secretariat for Economic Affairs (SECO), our support is especially tailored to benefit the poor and underserved part of the population, as well as supporting modern and energy efficient technologies.
Mobilising private capital Initially funded by the French Development Agency (AFD), the SIDAFF Programme has an ambition to attract private sector financing from local banks and institutional investors by setting up a financing mechanism to finance the projects being developed. The goal is to mobilise at least DKK 600 million, including capital from the private sector. By leveraging blended finance, this initiative enables SIDAFF to expand climate resilient infrastructure investments, narrowing the financing gap and improving water and sanitation access for the population in critical need.
South Africa is facing a water security crisis leaving millions without clean water and adequate sanitation. Innovation is needed to unlock the necessary financing for investments in water infrastructure. The SIDAFF Programme is an example of just that – playing an important role in developing a portfolio of bankable projects, which is needed to attract catalytic finance at scale. We are thrilled to participate in this innovative financing mechanism that aligns with IFU’s priority to support sustainable water infrastructure projects.
Managing Director and Co-head of Public Infrastructure Finance
Tina Kollerup Hansen
+45 33 44 12 35
