Greater Cape Town Water Fund (GCTWF)

Cape Town does not have enough water to meet the needs of its rapidly increasing population at a rate of about 2.6% a year. Forecasts from 2019 suggest that an additional 300–350 million litres (0.3–0.35 million cubic meters) of water a day will be needed by 2028 to ensure that supply meets demand of Cape Town. Additionally, climate models show decreased rainfall accompanied with increased temperatures in the future, increasing the risk of water shortages. Furthermore, in 2015–2018 the Greater Cape Town Region experienced the impacts of the worst drought in a hundred years, exacerbating the impact of these factors and seriously threatening the city’s water security. The period city managers had feared that the taps would run dry, dubbed “Day Zero”, was narrowly avoided in 2018, but the threat remains. Water demand management, addressing water leaks, maintaining and upgrading water infrastructure and water augmentation options, such as groundwater abstraction, water re-use and desalination to a secure water future, are important next steps but insufficient on their own. Another important option towards a water secure future is addressing water losses in the catchments caused by alien plant invasions. Authorities are faced with the complexity of prioritizing interventions and understanding the real cost and benefits of the different options.

In addition to engineering solutions—seawater desalination, groundwater exploration, increased storage capacity and water re-use—NbS offers a long-term, cost effective and sustainable solution. GCWF’s portfolio of interventions includes a range of NbS options and supporting programmatic learning initiatives to ensure 
catchment restoration and long-term management:

• Restoring native vegetation in catchments and aquifer recharge areas by controlling invasive alien plants (IAPs). 
• Rehabilitating, restoring and protecting wetlands and riparian areas
• Raising awareness about stewardship of water resources

Clearing invasive water-intensive plants has been identified as the most cost-effective intervention to address the Greater Cape Town Region’s water security issue. Over two-thirds of the surface area of the Western Cape Water Supply System (WCWSS) is affected by alien plant invasions, such as pines, Australian acacias and eucalyptus, reducing the amount of water that reaches the rivers, dams and aquifers. The challenge was where in the system to focus NbS activities to achieve the best results.

Despite ongoing efforts to control IAPs in the catchments, the problem was getting worse. Invasive plants continued to spread due to a host of factors, including a lack of coordination between different entities in the water and environment sphere, missing prioritisation to direct resources towards highest-return areas, insufficient follow-up for cleared areas and wildfire zones, a dearth of specialised implementation teams to reach high-angle zones, insufficient overall resources and inconsistent budget allocations for research and implementation. When combined, these factors formed a barrier to efficient and sustained execution of projects. To overcome this barrier, a new approach was needed. The Greater Cape Water Fund takes a long-term view, and it focuses on priority areas, collective action, the pooling of resources and developing the capacity.

The facts regarding the Greater Cape Town Region’s water availability challenges and threats to catchment health posed by invasive alien plants were known prior to the GCWF’s establishment. In particular, a body of work already existed regarding the impact of IAPs on South Africa’s water security, biodiversity and wildfire 
prevalence; furthermore, there were ongoing initiatives to control IAPs by programs such as Working for Water. However, the existing efforts to bring the invasions under control were not enough; a bigger scale and better coordinated collective action initiative was needed, a dynamic highlighted in the 2007 CAPE Invasive Species Strategy. To address water security challenges, and in response to the 2015–2018 drought, over R8 billion [US$500 million equivalent] in public funding was being considered for augmenting water supply through investments in groundwater abstraction, desalination, water re-use and increased surface water storage to meet the required demand. To make the case for NbS as a viable solution to Cape Town’s water security challenge, The Nature Conservancy, as a hosting organization of the GCWF, illustrated the benefits of ecological infrastructure restoration in comparison to the grey infrastructure under consideration through the business case.

The first step in the process of making the case for NbS was to identify a geographical area of focus and establish where the highest water losses to the natural environment were taking place. While attempts had been previously made to implement NbS in the catchments, these had faced difficulties partially because of the small-scale, fragmented approach of project implementation and the resources required for working in remote mountainous areas. To manage the expansive size of the WCWSS, the dam catchments were assessed to identify which areas experience the greatest water loss as a result of alien plant invasions (related to total effective extent density). Finally the sub-catchments were ranked from highest to lowest according to the greatest amount of water at the lowest cost. This helped establish priority sub-catchments for these interventions.

The Atlantis Aquifer was chosen as a priority area and demonstration project as it had a high impact potential, was in a protected area, and was managed by the City of Cape Town. As no specific studies existed for this site, TNC commissioned a year-long technical study quantifying the impact of invasive species on groundwater. The expertise of academics was sought on the proposed methodology for the study. The year-long sap flow monitoring was undertaken by the Council for Scientific and Industrial Research, a reputable institution in the area of hydrological modelling. The study showed an average loss of 830,000 litres/ha/year due to Port Jackson (Acacia saligna) stands in the Atlantis Aquifer’s core recharge zone. The quantification of the impact of invasive species on water flow, and its support from experts, showed that NbS were an important component of a viable solution to Cape Town’s future water security. Figure 1 illustrates GCWF’s indicative Theory of Change that links beneficiaries wih water security and co-benefit outcomes and the NbS interventions that generate those outcomes.

The GCWF’s prefeasibility activities were conducted amidst the worst drought in a hundred years. The concept of NbS as part of the City of Cape Town future water security portfolio was not seen as a priority at that stage, as this did not offer a quick fix to avoid a “day zero” scenario. Motivating key actors to consider the concept was a long and iterative process, as the reasoning for scaling NbS through public-private collective action had to align with various existing interests. In the first two years of its creation (between 2017 and 2019), TNC held 20 workshops of different sizes and involving diverse stakeholders and disciplines to advocate for the Water Fund, the potential of NbS, and the need for collective action. Stakeholder groups included government representatives, water sector actors, corporates, academics, nature conservationists, NGOs’ agriculture and environmental actors. These workshops raised awareness about Water Funds—what they are, what they are not—helped with information sharing, collecting input on NbS options understanding opportunities and potential barriers and requirements for collective action. They also built relationships and trust and started a dialogue with stakeholders. Experienced and trusted experts were involved in the workshops to help build momentum, validate the findings and build credibility.

The Bulk Water branch of the City’s Department of Water and Sanitation became interested in the project through ongoing engagement. These engagements served to illustrate the benefits of clearing invasive plants in the Atlantis Aquifer that this department manages, including increasing water recharge and reducing its structural risk and maintenance cost. This was a compelling option given the drought and the pressure on the city to avoid “day zero”. Conversely, highlighting the community benefits of implementing the project, particularly the creation of jobs, fostered the interest of local politicians. Expert academics and practitioners agreed with the scientific methodology and results of the sap-flow monitoring study, and the protected area management authority were supportive of the project’s objective. Having these stakeholders’ support ensured the concept of enhancing water security through NbS could be agreed on, even though the water fund concept was still unknown.

In response to the water challenges faced by the Greater Cape Town region, a coalition of public, private and civil society partners came together to form the Greater Cape Water Fund Steering Committee. These included The Nature Conservancy, National Department of Water and Sanitation, National Department of Environmental Affairs (Environmental Programmes), Provincial Department of Environmental Affairs and Development Planning, City of Cape Town, South African National Biodiversity Institute, CapeNature, Coca-Cola Peninsula Beverages, Nedbank, Remgro Ltd, and WWF-SA. With seed funding, TNC commissioned studies to evaluate the impact of NbS on water supply, beginning with targeted removals of alien plant invasions, and determined whether investing at scale in catchment restoration is cost competitive with other supply-side solutions. The studies informing the Business Case were conducted in a transparent manner by an experienced consultancy and the information was shared with the steering committee and technical working groups for input and comments.

Water resource management in the Greater Cape Town Region operates under a three-tiered system involving national, provincial and local government policies, strategies and institutions. National government is responsible for Water Resource Management, catchment management and also manages three of the five major dams in the WCWSS: Wemmershoek, Steenbras Upper and Lower (Theewaterskloof, Voelvlei and Berg river are managed by national government (DWS). The provincial government’s Ecological Infrastructure Investment Framework (EIIF) sets out an agenda for the province and local municipalities of strategic actions to be taken to achieve water resilience. The City of Cape Town as a water service provider is responsible for providing water to its users through managing bulk water and water distribution network. The city has adopted several water-related policies, including a dedicated water and sanitation policy and a water resources policy (OECD 2021). The former establishes clear goals, duties, resources and emergency strategies, and it is regularly monitored. The latter establishes clear goals and climate resilience aspects and is regularly monitored, though it does not outline clear duties, nor does it detail resources needed for its implementation. The city’s New Water Strategy (2019) recognizes the importance of catchment restoration as central to future water security and climate resilience.

Despite the governance systems in place, the WCWSS faces issues with policy and institutional fragmentation, inadequate capacity, and multi-level and multi-stakeholder coordination. To function and navigate the unclear mandates and limitations, enhancing water security through nature needed a new approach: collective action, prioritization and public-private partnerships. Moreover, the GCWF as an independent coordination body provides the platform for collaboration and collective action, manages the work, and champions the process without taking the mandate away from the relevant authorities or duplicating efforts.

The Nature Conservancy fulfilled the role of secretariat of the GCWF and obtained a legal opinion to determine whether any legal limitations existed for the city to invest resources outside the municipal boundary for longterm water security. The results of this were communicated with the City of Cape Town. The Conservancy continued working with the city to assess what role they could play in implementing and investing in the program. After multiple engagements, in May 2021 TNC and the City of Cape Town signed an MoU, committing the city to 2 years R50 million ($3.5 M).

The main nature-based threat to water security in the region is alien trees invading the catchments. Analysis for the Business Case modelled a 30-year period, and a six-step process was followed to identify priority source water sub-catchments for invasive alien plant removal and to understand the return on investment associated with implementing these interventions at scale. Seven of 25 sub-catchments were identified as priorities for invasive alien plant removal based on return on investment. They comprise a total of 54,300 hectares and are the sub-catchments for Wemmershoek, Theewaterskloof and Berg River dams.

Results from the Business Case showed that an investment of R372 million (NPV) (US$25.5 million) would generate annual water gains of over 55 billion litres (55 Mm3) a year within six years compared to the businessas-usual scenario. This is equivalent to one-sixth of the city’s current supply needs and would increase to 100 billion litres (100 Mm3) a year within 30 years. Water gains are at least one-tenth the weighted unit cost of alternative supply options (Figure 2 showing GCWF cost comparison of IAP control vs grey infrastructure to augment water). Approximately 350 job opportunities would be created in the first five years of implementation, as removing alien plant invasions is labour intensive. The effective communication of these messages, by bringing together the data from the water modelling and ROI analysis into clear, lay-person messages, enhanced the social acceptance of the priority NbS options.

Experts and practitioners were approached to validate the findings of the Business Case. This involved multiple expert workshops and reviews which helped with credibility of the business case study and findings. Finally, the Business Case was shared with the GCWF steering committee for input. The findings were shared to a larger public and private stakeholder group during the Business Case’s launch and panel discussion in November 2018, with the City of Cape Town announcing its support of NbS as part of its broader portfolio of options to address Cape Town’s future water security.

The GCWF identified the top 10 water users, the list of which included food and beverage companies, hospitals, sport fields and others. The sustainability managers of the corporates were identified, approached and shown the Water Fund concept. Initially, the objective was to mobilize private sector interest, buy-in and participation in the GCWF and to create a vision for it, rather than immediately seeking financial backing. Corporates were presented with the scientific modelling and cost-benefit analysis of the NbS and became interested in supporting the GCWF as they could see the benefits. By avoiding immediately asking for funding, and letting corporates see for themselves the benefit of the program, the private organizations’ interest in the program was genuine. Many have offered support to the program, either in the form of funding, in-kind contributions or in terms of endorsement.

The GCWF has a target implementation scenario of clearing 54,300 ha across seven priority sub-catchments by 2025 to generate annual water gains of over 55 billion litres (55 Mm3) a year at an average Unit Reference (URV) of R2.20 per m³. To meet this target, the GCWF has to clear approximately 9,050 new hectares a year, while undertaking scheduled follow-up and maintenance work on cleared areas.

The optimal clearing scenario can only be achieved if there is an appropriate number of trained specialized rope access technicians (SRAT) available to conduct the clearing in remote mountainous areas. A total workforce of 350 would be required to meet the targets, and the GCWF are working to train the required minimum of 120 SRAT, creating new specialized green job opportunities in the process.

The potential water gains from the clearing and the creation of job opportunities presented an attractive costbenefit ratio for funders. The Coca-Cola Company provided the first corporate seed funding for implementation, and this was used to appoint a group of female clearing personnel for the Atlantis Aquifer. 500 green job opportunities were subsequently created with the support of corporates, philanthropy, Working for Water and the City of Cape Town. This proof of concept and alignment with Environmental Social & Governance criteria inspired private sector involvement.

Invest R 750M in controlling invasive plants over 30 years to restore 55K ha in seven priority sub-catchments for highest ROI and generate 55M cubic meters per year by year six (100M cubic meters per year full lifecycle) and create 350 green job opportunities.

Strategically eradicating invasive alien plants and sustaining restored native vegetation will be the GCWF's top goals in the foreseeable future for enhancing water security and protecting biodiversity. The WIP intends to gradually provide a broader selection of ecological solutions in WCWSS source water basins. Riparian restoration, wetlands restoration and protection, and changes to agricultural land use are some of the proposed interventions. The collaborative science-based approach will be maintained by implementing a broader set of ecological infrastructure solutions. The WIP will use its strategic plan to direct implementation and any related monitoring and evaluation in collaboration with the landowners and land managers of the prioritised sub-catchments. Building the GCWF’s institutional capability will be a part of implementing the strategic plan.

The institutional vision for the GCWF is for it to be institutionally simple, to ensure low transaction and overhead costs, and to follow the efficient management of operations and coordination of project implementation. The institutional structure of the GCWF should allow the Fund to continue to “get things done” in an efficient and adaptable manner. Additionally, if the Fund is to attract private sector funding, transaction and overhead costs should be low, and red tape should not be an issue within its governance apparatus.

• By December 2025, avoided water losses of 55 Mm³ per year through removal of invasive alien plants and maintaining cleared areas
• By December 2025, 55,300ha invasive plants cleared in seven priority sub-catchments and 5,000 hectares on the Atlantis aquifer through collective action using integrated control methods, follow up 100% on schedule
• By June 2023, funding for the high-impact phase secured and key stakeholders adopted long-term sustainability framework
• By June 2023, the GCWF entity established, Water Fund director and board appointed, and funding secured for covering operational cost of the future entity
• By December 2021, three (3) additional SMMEs specializing in remote access are developed and 120 specialized remote access technicians trained, 350 green job FTEs created
• By June 2022, Monitoring Evaluation & Learning program rolled out for five elements: water, biodiversity (freshwater & terrestrial), management effectiveness, socioeconomic, partnership satisfaction
• By December 2021, the Decision Support System is fully operational and adopted by all partners
• By June 2022, Decision Support System rolled out to include all 25 priority sub-catchments and Atlantis

From 2018 to 2023, the GCWF operated as a TNC-led program, which most stakeholders viewed as appropriate but interim in nature. In the long term, the intended governance arrangement for the GCWF is that it adopts the legal form of an independent entity, to be established as a public benefit organization and as a non-profit company. This process is currently in motion, though the GCWF will still be linked to TNC until the new entity is financially sustainable.

The GCWF’s 2021 Sustainable Funding Strategy estimated that a total funding volume of ZAR 674 million will be required over the 30-year programme period to pay for the clearing of IAPs in the seven priority sub-catchments as well as the associated program management costs. At this time, approximately 42% or ZAR 284 million of the funding had been confirmed, and the strategy outlined possible avenues and funder categories from which to secure the balance of the funds (the 30-year funding gap) – focussing both on the initial six year ‘high-impact’ period and the subsequent long-term maintenance period. Potential funding sources identified included:

1. Funding Contributions (comprising private sector – corporate and philanthropy, donor agencies & global funds, and municipality budget expenditure);
2. Sustainable Recurring Funding Sources (including national and provincial government programming and various water charges and levies); and
3. Additional Resourcing Mechanisms (in-kind contributions, value-added industries, endowment, and repayable financing).

Potential funders from these different sources are being engaged on an ongoing basis, both with respect to obtaining the 6-year ‘high-impact’ finance, as well as the maintenance funding required.
The GCWF Sustainable Funding Strategy will need to be updated to reflect additional funding commitments and detail how finances are being channelled into the Fund for when it is fully established and operationalised. Additional funding has been confirmed after the drafter of the 2021 strategy, a significant portion of which was committed by the City of Cape Town for a 3-year period. Moreover, the preliminary costing process will need to be revisited to give further insight into the portion of funds that will be required for the long-term maintenance of the Fund (from an internal governance, management and staffing perspective).

GCWF is yet to develop a comprehensive 5-year strategic plan that seamlessly aligns with the process to date and possible achievements that can be followed. Once developed, This strategic blueprint should define the desired future state and measurable outcomes, reinforcing the organisation's culture, beliefs, and values. Aligned with the mission and vision, the plan will establish clear strategic objectives, quantifiable targets, and key performance indicators, serving as navigational benchmarks for the upcoming years. It will systematically identify capacity and resource gaps to proactively seek partnerships and initiatives that can address these deficiencies effectively. Additionally, it will detail internal initiatives for the next financial year, such as new areas to clear or new methods to remove alien invasive species, contributing significantly to achieving our strategic goals. The ultimate objective is to ensure that the strategic plan is not only visionary but also pragmatic. This entails specifying actions, resource allocation, and monitoring mechanisms to transform goals into tangible, attainable milestones, furthering the cause of water conservation and sustainability in the Greater Cape region. 
 

Currently, the Greater Cape Water Fund is one of TNC’s South African programmes. Therefore, the staffing, funding, and operational requirements of the Fund are all provided by TNC.  Ultimately, it is the intention that the GCWF should run independently from TNC, meaning that it will need to gain separate legal personality, that it will need to have the necessary staff and capacity to run its own operations, and will need to have sufficient funding secured to do so. This funding will need to cover both the costs of its activities in the sub-catchment areas in which it operates as well as the day-to-day expenses associated with running the entity. A Roadmap to Establishment was developed in September 2023 setting out the process that will need to be undertaken to transition the Fund to a fully independent entity by 2026.  

In 2023, GCWF was created as an non-profit company (NPC). This will allow the Fund to have legal personality as a separate legal entity and thereby to own its assets, have rights and duties, and ensure that any income it derives, or property it holds is used to advance the purpose for which it was created. Furthermore, it allows the Fund to formally place watershed rehabilitation and conservation objectives through NbS at the forefront of its operations.

GCWF is a dynamic organisation with a multifaceted structure encompassing diverse governing bodies and stakeholders, each playing a pivotal role in propelling the Water Improvement Program (WIP) towards success. These entities fulfil distinct functions crucial for achieving our mission and vision. Figure 3 outlines these bodies, made up of a Board of Directors, members comparable to shareholders, and management. Each component within this framework fulfils a unique function, with clearly defined roles and responsibilities, contributing collectively to the effective functioning and success of the NPC.  

GCWF has two main decision-making bodies; members and the Board of Directors. Members are essentially the NPC equivalent of shareholders. Even though an NPC does not have shareholders/owners, the members of the GCWF make decisions regarding the Fund that are comparable to decisions made by owners. Separately, the Board of Directors is responsible for the management and strategic oversight of the Fund. The Manager of GCWF was hired by the Board in 2023 to lead and direct the organisation and to implement its strategies, policies and programmes as approved by the Board. To be effective in this role, it is important and necessary that the Manager holds significant responsibility for giving strategic direction and driving organisational development so that the organisation can achieve its goals. At an operational level, the Manager is responsible for the day-to-day running of the organisation.

The Roadmap sets out the processes that will need to be carried out in legal, operational, and financing fields to ensure that the GCWF can operate effectively as an independent entity. It is the intention that this will happen over the course of a five-year period between 2023 and 2028. From 2023 to the end of 2026, this will be a ‘high impact’ phase during which the Fund will receive support from TNC, which will decrease in each consecutive year. During the first year, the fund will have independent legal status but will receive significant support from TNC in respect of Resource Mobilisation, Operations and Implementation. The support provided by TNC will decrease over the following 3 years as the Fund gains the necessary institutional and technical capacity to carry out its own Operations, Implementation, and Resource Mobilisation. This will culminate in an intensive 6-month ‘transition’ or handing-over process sometime during the years 2026 - 2028 in which TNC and N4W will ensure that all necessary processes are in place for the entity to operate independently. By the end of this period, the GCWF will be fully operationalised.

Currently, the GCWF uses the Decision Support System (DSS), an interactive online dashboard that tracks the progress of all activities undertaken by the partners of the Fund. It is designed to be flexible, transparent, and user-friendly. At a high level, this tool has been designed to track implementation progress against the planned targets in the long term. On the ground, it allows GCWF to coordinate in-field activities better so that they can constantly improve and update implementation efficiencies and methods.

GCWF has been implementing since 2018, when an initial pilot project was established. Since then, it has made significant progress in achieving its initial goals. As of September 2023, the GCWF’s implementing partners completed the initial clearing on 28,037 hectares in the seven priority sub-catchments, and follow-up clearing (essential to protecting the original investment and avoiding re-establishment of invasives) on 11,461 hectares. Figure 4 illustrates this progress further. The successful track record of the GCTWF demonstrates how collaboration can build, scale, and maintain large-scale, highly technical IAP removal operations in remote areas.

The GCWF has created over 570 green jobs since establishing its pilot project in 2018, about 40% of which are held by women. Of these jobs, 142 are high-angle technicians, who undergo extensive preparation to work safely in remote, high-value locations. All those employed through the GCWF receive training that improves their skillset and future employability. A socioeconomic survey found that on average, one job with the GCWF supports four individuals, providing stability to their household.

The GCWF’s successful scale-up can be attributed to the pooling of resources, support from stakeholders, and the commitment of the high-angle team who do the hard work of removing the IAPs.

The GCWF is still in the process of being fully executed and operationalised. It is expected that the GCWF will be fully operational and running on dedicated (independent) funds by June 2027. By December 2028, it is expected that the GCWF will have achieved independence in all three key pillars: legal, operational (both relating to internal matters and implementation) and financial. The Fund will have a separate legal personality, will be fully operational, and will be running on dedicated and independent funds.