The Cape Water Outcomes-Based Bond, received a R50 million grant from the Development Bank of Southern Africa (DBSA).
The Bank announced on Wednesday that the amount is coming from its Green Fund to support the implementation of financing nature-based solutions, aimed at improving water security and restoring critical ecosystems in South Africa.
The Cape Water Bond offers a replicable model for financing large-scale ecological infrastructure by blending public, private, and concessional capital. The bond is expected to raise approximately R2.5 billion from investors under RMB’s Domestic Medium Term Note Programme, with strong market interest already demonstrated.
The initiative also builds on global precedents such as the Rhino Bond issued by the World Bank, adapting the model to the South African investment landscape and context.
Phindile Masangane, Group Executive Programmes at the DBSA, said by linking financial returns to the achievement of measurable environmental outcomes, the bond hopes to mobilise private sector capital to address the growing challenges of water scarcity, biodiversity loss, and land degradation.
“The DBSA is committed to pioneering innovative financing solutions that bridge the gap between public development priorities and private capital” said Masangane.
DBSA’s contribution will help to de-risk the transaction and crowd in private investment.
Picture: Supplied