Climate Fund Managers (CFM), a climate-focused blended finance investment manager, has approved a USD 86.2 million mezzanine debt investment from the Construction Equity Fund of its EU-supported Climate Investor Two facility to support the first two stages of the Olifants Management Model Programme (OMMP) in South Africa. The investment will strengthen regional water security and climate resilience in one of the country’s most water-stressed regions.
The OMMP is a major bulk water initiative designed to address one of South Africa’s most persistent infrastructure challenges: the shortage of reliable water supply in regions experiencing rapid industrial expansion, population growth and climate-related drought. The OMMP is being developed by the Badirammogo Water User Association (BWUA), with the aim of expanding bulk raw water supply to commercial and industrial users, as well as potable water supply to communities, across the Northern and Eastern Limbs of the Bushveld Igneous Complex (BIC) – one of the world’s most important mineral regions. The BIC supports thousands of jobs and substantial export earnings, making reliable water supply essential to both local communities and the national economy.
Climate Fund Managers is a joint venture between South Africa’s Sanlam InfraWorks and Dutch development finance institution FMO.
Climate Investor Two (CI2) is a USD 1 billion blended finance fund formed in partnership with the European Commission and the Dutch Fund for Climate and Development (DFCD), that combines public and private capital to invest in and co-develop water, waste and oceans infrastructure in Africa, Asia and Latin America. The USD 86.2 million mezzanine investment from CI2 strengthens the OMMP’s bankability to unlock senior commercial debt from the appointed co-Mandated Lead Arrangers (MLAs) – Standard Bank, Nedbank and Absa – who are advancing the senior debt package for the commercial portion of the OMMP’s first stage, with subsequent stages to follow.
The OMMP responds to a long-recognised need to expand and modernise bulk water supply across the region, where infrastructure constraints have persisted for decades. As industrial activity and population have grown across the BIC, rising demand has placed increasing pressure on ageing systems, resulting in supply gaps for households, municipalities and industry.
To accelerate delivery, BWUA is collaborating with government and private sector partners and financiers, including CFM, to mobilise the expertise and capital required to implement the OMMP. The first two stages will expand the region’s bulk raw water backbone through new pipelines, water treatment works and supporting infrastructure, alongside renewable energy systems that will power the most energy-intensive components. These two stages form part of a six-stage programme planned for delivery over the next decade. Once operational, BWUA estimates that they will improve access to safe water for approximately 390,000 people – around 6 per cent of the Limpopo population – and ensure reliable supply for industrial and mining users central to the region’s economic activity.
The initiative aligns with South Africa’s National Water Resource Strategy and its Nationally Determined Contribution (NDC), which prioritise climate adaptation, improved water security and modernised bulk infrastructure.
Darron Johnson, Regional Head of Africa at Climate Fund Managers, said: “The OMMP tackles a long-standing barrier to South Africa’s development: securing reliable water supply in a region that is both economically important and increasingly exposed to climate-related water stress. This investment demonstrates how blended finance can accelerate the delivery of essential infrastructure where it is most needed. The mezzanine facility plays a catalytic role by enabling the full financing package required to advance construction of the OMMP’s first two stages. Through the OMMP, we are helping build climate resilience, safeguard jobs across the mining value chain and expand access to safe water for households throughout Limpopo.”
Dr Kobus van Duvenhage, CEO of Badirammogo Water User Association, said: “Water security is fundamental to the economic and social wellbeing of communities across the region. The OMMP is a significant step forward in meeting this need, made possible through close collaboration between BWUA, institutional and commercial collaborators and both government and private-sector financiers. The support provided through the Budget Facility for Infrastructure and the Infrastructure Fund, together with investment from Climate Fund Managers and the senior lending consortium, enables us to deliver large-scale water infrastructure more efficiently and sustainably. This approach will strengthen regional economic activity and ensure that communities, municipalities and industry have reliable access to the water resources they depend on.”
A Socio-Economic Development Programme has been developed and will be implemented alongside the OMMP, focusing on improving education, water access, sanitation, enterprise development and wellbeing in doorstep communities.
Earlier-stage development of the first stage of the OMMP was supported by a USD 800,000 investment from Climate Investor Two’s Development Fund, with an additional USD 1.8 million earmarked for finalising preparation of the second stage.
