Highlights
- Financiers have made it clear that they need governments to fix inefficient utilities—by plugging leaks and tightening billing—before new debt makes sense.
- Africa loses billions of dollars each year to non‑revenue water, according to estimates from regional water utilities and development finance institutions. Recovering those losses is the fastest and lowest‑cost way to unlock investment without paying interest.
- With over a trillion dollars in local pension and insurance assets, local‑currency bonds
- Introduction
At a packed side event during the Africa at World Bank Spring Meetings, a room full of investors, ministers, and development bankers gathered under a title that promised solutions: “Unlocking Capital for Africa’s Water Security and Sanitation.” What emerged from the discussion was more pragmatic. The financiers on stage did not call for additional borrowing. Instead, they emphasised the need for African governments to stabilise core utility operations before mobilising new capital. The World Bank estimates that delivering universal access to water and sanitation across Africa requires over $100 billion. Yet as Albert Zeufack, the Bank’s Country Director for the DRC and Angola, reminded the audience, global fiscal space is vanishing. The era of writing large checks from public balance sheets is over. The future of water finance, he argued, depends on leveraging private capital. In addition, private capital, as the panel made clear, is not sentimental. It demands certainty.
- Fixing the fundamentals
Alex Money, CEO of Watermarq. He illustrated the problem with the AUDA-NEPAD AIP pyramid—a framework that maps out where money for water actually comes from. At the very top sits the sliver of highly concessional aid and grants. In the middle lie climate funds and development bank loans. However, the massive, unglamorous base of the pyramid—the place with the most potential to close the spending gap—has nothing to do with new debt. It is about “sweating the existing asset base.” “Why pay interest? Why take loans and pay interest when you can get stuff done without having to do that in the first instance?” Money asked the room. He noted that Africa loses billions annually to non-revenue water from leaks and theft, and tariffs too low to fund repairs or new treatment plants. Before any investor will take a revenue risk, utilities must demonstrate they can collect what they are owed and charge what the service costs. Fixing the fundamentals is the hard prerequisite for bankability. Moreover, Don Christensen, Executive Chairman of InvestBank Corp., described the safeguards institutional investors require: blocked revenue accounts, water purchase agreements with the same covenants as power deals, and first-loss capital to cushion construction risk. Investors are not afraid of water—they are afraid of unpredictability. Give them a tariff locked in by a credible regulator and an off-taker that pays on time, and the money will move.
- Africa’s own capital, creatively structured
Crucially, that money does not need to come in dollars. Mahesh Kotecha, President of Structured Credit International Corp., reminded that Africa holds more than a trillion dollars in liquid assets on the continent. He cited Angola’s 2024 water bond—a local currency issuance equivalent to $20 billion, secured by subscriber revenues and structured off the government’s balance sheet. African pension funds and insurers, currently invested in government T-bills, could be redirected toward water infrastructure if the structures are right. The solution is not always foreign exchange; it is financial plumbing.
Ann Thomas, Senior WASH Advisor at UNICEF, indicated that over 80 percent of African households rely on onsite sanitation like pit latrines or septic tanks. However, the large-scale financing models discussed by the bankers in the room are still designed for centralised sewerage systems, a 19th-century solution for 21st-century African cities. “At current rates, it could take hundreds of years for this to ever take shape.” She warned. There is a glaring gap between how finance is structured and how people actually live. Bridging that gap will require the same creativity applied to bonds and guarantees to be applied to financing pit-emptying services, decentralised treatment, and household-level improvements. Sanitation cannot remain invisible in the investment conversation. The World Bank Group is signalling readiness. Dr Zeufack confirmed that the Bank is merging its guarantee platforms and that MIGA is committed to providing $1 billion in guarantees under the new Water Forward initiative. These guarantees are precisely the kind of credit enhancement that changes the risk-return calculus for a pension fund in Nairobi or Lagos. Nevertheless, they will only succeed if matched by political will.
Conclusion
The path forward was clear but demanding. African governments should use the Water Investment Scorecard not as a report card for donors but as a mirror to assess their own readiness. They should emulate Senegal’s country compact and the DRC’s corridor-based prioritisation of projects. In addition, they should accept that the most attractive signal they can send to the market is a utility bill that people trust enough to pay. The World Bank’s new goal is to achieve water security for an additional 400 million people by 2030. Africa’s water goals require fixing leaks, proper pricing, and mobilizing domestic savings, not more loans. Capital exists; certainty does not. Governments and regulators must close this gap to unlock investment.
