Investing in water security for climate resilient growth and development

This briefing outlines the financial requirements and strategies for achieving water security and climate resilience in Africa. It estimates the significant annual costs involved and proposes a blended financing approach that combines traditional water finance, official development assistance, and specialized climate funds to bridge the current investment gap.

• Achieving water security in Africa requires an estimated annual investment of US$30–50 billion for capital expenditure and US$5–15 billion for recurrent budgets. Adding 'climate resilience' to these expenditures could increase the annual cost by another US$10–15 billion.
• A study on the costs of climate-proofing the Millennium Development Goals (MDGs) in Africa indicated that external financing for 'climate resilient' MDGs is approximately 40% higher than for the MDGs alone. Specifically for water and sanitation, the additional external public funding needed for climate resilience is estimated between US$2.9 and 7.2 billion annually.
• The document proposes a systematic approach to bridging financing gaps by minimizing costs and fixing realistic service standards, then maximizing internal cash flow through 'the 3Ts': tariffs, taxes, and transfers (external funds from ODA and philanthropic sources). This cash flow can then be used to leverage repayable funds like bonds, loans, and private equity.
• Financing strategies for water security should be diversified based on the type of service: 'public goods' like flood risk management and strategic water storage require public financing, while household, industrial, and agricultural water supplies should attract commercial loans and equity.
• Specialized climate finance is currently a minor source of water funding and is primarily directed toward mitigation. However, it can play a critical role in supporting the early stages of the adaptation project cycle, such as project preparation, innovation, and piloting, to leverage larger-scale implementation funding.
• The Green Climate Fund (GCF) is identified as a potential major source of funding for African water, though its disbursement timeline and the equitable allocation for adaptation remain key points of negotiation for African climate finance negotiators.
• Recent global financial events have decreased the availability of commercial bank loans and private equity, leading to a higher reliance on state budgets and loans from International Financing Institutions (IFIs) and non-OECD emerging markets, specifically China.

APA

Climate and Development Knowledge Network (n.d.). Investing in water security for climate resilient growth and development. https://cdkn.org/sites/default/files/files/WaterSecurity_Brief5_pr3.pdf

Chicago

Climate and Development Knowledge Network. Investing in water security for climate resilient growth and development. n.d. https://cdkn.org/sites/default/files/files/WaterSecurity_Brief5_pr3.pdf.

Wikipedia

{{cite report |author=Climate and Development Knowledge Network |title=Investing in water security for climate resilient growth and development |url=https://cdkn.org/sites/default/files/files/WaterSecurity_Brief5_pr3.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{climateanddevelopmentknowledgenetworkndinvesting, author = {{Climate and Development Knowledge Network}}, title = {{Investing in water security for climate resilient growth and development}}, institution = {Climate and Development Knowledge Network}, url = {https://cdkn.org/sites/default/files/files/WaterSecurity_Brief5_pr3.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }