Improved Inland Water Quality Could Result in up to R257 Million Net Benefits

The City of Cape Town’s planned green infrastructure investment in the Diep/Sand- and Zeekoe catchments could result in net benefits of up to R257 million over 25 years, according to an analysis undertaken. This assessment was part of a package of support for Cape Town’s nature-based infrastructure interventions from the C40 Cities Finance Facility (CFF). The other assessment looked at the construction of the City’s planned Paardevlei solar plant.

As part of the City’s partnership with international leaders in sustainable water and energy resilience investment, City leadership and partners today, 24 July 2025, celebrated the completion of two key technical reports that will help the continued development of finance-ready water and energy projects over the decades to come.

This CFF support is funded by the German Federal Ministry for Economic Cooperation and Development (BMZ), and the UK Foreign, Commonwealth and Development Office (FCDO) and is implemented by Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH together with the C40 Cities Climate Leadership Group.

Paardevlei solar plant – climate mitigation
Plans for the establishment of the Paardevlei ground-mounted solar plant are well advanced and will result in an up to 70 MW municipal own-build plant. The possibility exists to create some 2 000 direct and indirect employment opportunities during the construction phase alone and a further 100 long-term opportunities over the 20-year operation of the plant thereby increasing local skills within the green economy and renewable energy sector across its value chain. The project is approaching a tender-ready phase.

Liveable Urban Waterways (LUW) Project – climate adaptation
The Nature-Based Infrastructure (NBI) Global Resource Centre, an initiative led by the International Institute for Sustainable Development (IISD), undertook an assessment of the City’s planned nature-based infrastructure investment in the Diep/Sand- and Zeekoe catchments.

Cape Town is home to nearly 2 000 km of rivers, 480 km of canals, over 800 stormwater ponds, and thousands of hectares of biodiversity-sustaining wetlands and vleis. The City also has Ramsar City status, an international accreditation recognising cities that demonstrate exceptional commitment to conserving their wetlands and ecosystem services.

These inland waterbodies are key to Cape Town’s biodiversity, future resilience, and residents’ wellbeing. These natural water sources also sustain our tourism industry, local economy and job creation.

However, these natural sources are increasingly under pressure due to urban development associated with population growth, and pollution from sewage and solid waste. As such, the City developed a Water Strategy to ensure safe and reliable water access for all residents, including ensuring Cape Town becomes a water-sensitive city by 2040. This strategy paved the way for initiatives like the LUW which aims to use water-sensitive design, waterway rehabilitation, and investments in nature-based solutions or green infrastructure to provide multiple social, environmental, and economic benefits.

As part of the LUW Programme, the City with the support from the CFF developed masterplans for nature-based infrastructure in two urban catchments, and is establishing a pipeline of bankable projects, supported by an evidence-based benefit case, and a framework for effective implementation.

The NBI Global Resource Centre undertook a holistic analysis of the planned interventions of the LUW Programme in the Diep/Sand River catchment and the Zeekoe catchment. These nature-based and hybrid infrastructure plans include wetland rehabilitation, invasive plant species removal, canal naturalisation, the installation of waste interceptors and sediment treatment areas to build healthier waterways, reduce flood risks and improve quality of life, among others.

The Centre assessed the social, economic, and environmental outcomes for investing in these interventions for the period 2025 to 2050, considering various climate change scenarios to understand the long-term benefits and costs of the proposed nature-based infrastructure interventions.

‘Cities are complex systems, and urban planning needs a holistic approach to account for this. With our assessment, Cape Town can address root challenges, improve ecosystem health, and enhance quality of life. Integrated cost-benefit analyses further strengthen the case for nature-based infrastructure, helping to mobilise funding and secure long-term maintenance. It was a privilege to co-create this with Cape Town experts and empower city officials to make evidence-based decisions, said Ronja Bechauf, Policy Advisor at IISD.

The July 2025 NBI-report is part of a wider collaboration between C40 Cities Finance Facility and IISD to support the project preparation phase of NBI projects of cities in Colombia and South Africa.

Key results:

• The analysis found that investment of R124 million in NBI interventions in the Diep/Sand catchment will deliver net benefit equal to between R121 million and R133 million over the 2025-2050 time horizon.
• For the Zeekoe catchment the investment of R122 million will deliver net benefit equal to between R68 million and R125 million over the 2025-2050 time horizon.
• Thus, for every R1 invested in an NBI the return on investment equals to about R2.
• The assessment found that there is a strong economic case for NBI interventions in both catchments, including reductions in flood damage costs, improved public health outcomes, enhanced biodiversity, and avoided costs of sediment and invasive plant management.
• Building and maintaining NBI creates jobs for local communities. The employment creation of R17,4 million in the Zeekoe catchment represents 60 jobs created each year during the 7-year implementation period and 67 jobs annually during the remaining maintenance phase. The NBI in the Diep/Sand catchment would create a similar number of jobs worth a total of R18,6 million.

Net benefit of up to R257 m
‘The Centre’s primary objective was to determine how our planned interventions can address the challenges posed by climate change and urbanisation as it relates to flood risks, water quality, and ecosystem health. I must say, the findings are mind-blowing and build a strong case for why we continue along this path.

‘The results show that over 25 years, the proposed interventions could generate a total net benefit of up to R257 million in both catchments. The biggest returns come from preserving tourism and property values, reduction in flood damage and cost savings in dredging and repairs. For the Diep/Sand catchment the estimate is that for every R1 we invest in a nature-based intervention the return for society equals about R2.

‘It makes absolute sense for us to continue to implement these projects, also because of the long-term benefits these hold for Cape Town’s ecosystems and sustainable urban development goals and our budget priorities reflect our ongoing commitment,’ said the City’s Mayoral Committee Member for Water and Sanitation, Councillor Zahid Badroodien.

Green economy benefits
‘There are significant economic and financial advantages in investing in nature-based interventions, a focus the City of Cape Town has scaled up over the past decade. It is true that our inland waterbodies are under sustained pressure, and this is one of the main reasons why we are currently dredging Zeekoevlei, a massively complicated and costly intervention to improve the water quality. The report from the NBI Global Resource Centre provides the City with a wealth of information about how nature-based infrastructure can help us to improve the health of our ecosystems, while saving us money over the long-term and providing local communities with job opportunities,’ said the City’s Deputy Mayor and Mayoral Committee Member for Spatial Planning and Environment, Alderman Eddie Andrews.

Cleaner, more affordable energy
‘Importantly, these partnerships, and funding for technical support, enable us to get finance-ready projects such as the Paardevlei project in the Strand/Somerset West area. It is envisaged to become part of several own build power plants across the metro and this fits into the City’s commitment to diversify energy resources for cleaner and more affordable power in Cape Town. The finance that can be leveraged for these projects, the boost to the green economy in terms of skills and supply chain development, including enhanced goods and services is of paramount importance. We can see the impact that has already been achieved with the construction our first municipal own build solar plant in Atlantis,’ said the City’s Mayoral Committee Member for Energy, Alderman Xanthea Limberg.