Climate Fund Managers (CFM) has approved a USD 86.2 million mezzanine debt investment to support the first two stages of the Olifants Management Model Programme (OMMP) in South Africa, strengthening water security and climate resilience in one of the country’s most water-stressed regions.
The investment is being made through the Construction Equity Fund of Climate Investor Two (CI2), a blended finance facility supported by the European Union. The funding is intended to catalyse construction of priority infrastructure under the OMMP, a large-scale bulk water programme in Limpopo Province.
The OMMP is designed to address long-standing constraints in reliable water supply across areas experiencing rapid population growth, industrial expansion and increasing climate-related drought. Developed by the Badirammogo Water User Association (BWUA), the programme aims to expand bulk raw water supply to industrial and commercial users while improving access to potable water for communities across the Northern and Eastern Limbs of the Bushveld Igneous Complex.
The Bushveld Igneous Complex is one of the world’s most significant mineral regions, supporting thousands of jobs and substantial export activity. Ensuring reliable water supply is therefore critical to both local livelihoods and South Africa’s broader economic stability.
Blended finance to unlock large-scale water infrastructure
Climate Fund Managers is a joint venture between Sanlam InfraWorks of South Africa and Dutch development finance institution FMO. Climate Investor Two is a USD 1 billion blended finance fund established in partnership with the European Commission and the Dutch Fund for Climate and Development, combining public, private and concessional capital to support water, waste and ocean infrastructure across Africa, Asia and Latin America.
The USD 86.2 million mezzanine investment is expected to strengthen the OMMP’s bankability, enabling the mobilisation of senior commercial debt from the programme’s appointed co-mandated lead arrangers: Standard Bank, Nedbank and Absa. These institutions are advancing the senior debt package for the commercial component of the OMMP’s first stage, with subsequent stages planned to follow.
Strengthening water access and drought resilience
The first two stages of the OMMP will expand the region’s bulk water backbone through new pipelines, water treatment works and supporting infrastructure. Renewable energy systems will be incorporated to power the most energy-intensive components of the scheme. Together, these stages form part of a six-stage programme scheduled for delivery over the next decade.
Once operational, BWUA estimates that the first two stages will improve access to safe water for approximately 390,000 people, representing around six per cent of Limpopo’s population. The project is also expected to ensure more reliable water supply for mining and industrial users central to the regional economy.
The programme aligns with South Africa’s National Water Resource Strategy and its Nationally Determined Contribution, both of which prioritise climate adaptation, water security and the modernisation of bulk infrastructure.
Industry perspectives
Darron Johnson, Regional Head of Africa at Climate Fund Managers, said the programme addresses a critical development challenge. “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.”
He added that the mezzanine facility plays a catalytic role in enabling the full financing package required to advance construction of the OMMP’s first two stages, supporting climate resilience, job security across the mining value chain and improved water access for households.
Dr Kobus van Duvenhage, Chief Executive Officer of the Badirammogo Water User Association, said water security is fundamental to regional wellbeing. “The OMMP is a significant step forward in meeting this need, made possible through close collaboration between BWUA, government, institutional partners and private-sector financiers. This approach will strengthen regional economic activity and ensure that communities, municipalities and industry have reliable access to the water resources they depend on.”
Supporting local development
A socio-economic development programme will be implemented alongside the OMMP, focusing on education, water access, sanitation, enterprise development and wellbeing in communities located close to the project.
Earlier-stage development of the OMMP’s first phase was supported by a USD 800,000 investment from Climate Investor Two’s Development Fund, with a further USD 1.8 million allocated to finalise preparation of the second stage.
