EthiopiaArticleWater
Ethiopia faces serious water management problems that threaten its long-term development. Communities struggle to access clean water due to old and broken infrastructure. This is especially true in Dire Dawa, the second most populous city in Ethiopia. The city entirely depends on groundwater for its supply, which is three times less than the water demand. To solve these issues, Nedamco Africa, with support from the TRAIDE Foundation, is using innovative and scalable solutions to address Ethiopia’s water challenges and support sustainable water management.
The Challenge: Water Waste, Old Pipes and Lack of Access
Ethiopia faces big water management challenges. Old infrastructure, inefficient systems, and recurrent droughts significantly strain water resources, leading to severe shortages and compromising the quality of available water. Rapid urbanisation and population growth further aggravate these issues, as water demand keeps increasing while existing systems struggle to cope with underinvestment and pressure on water resources due to climate change.
In Dire Dawa, more than 50% of the water is lost due to leaks and poor infrastructure, leaving communities without reliable access to clean water. As the city’s population grows, these problems will only get worse. The root causes include limited government financing, lack of technical expertise, and inadequate data to manage water systems effectively. Without addressing these critical issues, the region risks falling further behind in meeting Sustainable Development Goals (SDGs), particularly SDG 6 (Clean Water) and SDG 13 (Climate Action), making it increasingly challenging to secure a sustainable livelihoods for its residents.
Nedamco’s Digital Twin Technology and Innovative Green Financing Solution
Nedamco Africa has introduced digital twin technology to model Dire Dawa’s water system in real time. This advanced system helps monitor water infrastructure, detect leaks, and optimize water distribution. The Catchment City Waste (CCW) project, a partnership between Nedamco and the Dire Dawa Water Supply and Sewerage Authority (DDWSSA), aims to halve non-revenue water – water that is wasted and never arrives to consumers – from over 50% to 25%.
To ensure the long-term sustainability of this solution, Nedamco is training local stakeholders to manage the systems, ensuring there is in-house capacity to operate the digital system and help DDWSSA regularly maintain physical water infrastructure.
To address the lack of funding, Nedamco has introduced green bond financing which helps to attract private investment, providing a sustainable funding model that supports further expansion without adding debt to the government. This innovative financing mechanism works by creating and issuing water credits based on ‘volumetric water benefits accounting standards’. In other words, this system quantifies and monetizes improvements in water quality and efficiency. The net proceeds from these water credits will serve as repayment capacity for issuing green bonds, specifically designed to fund critical interventions in Dire Dawa’s water infrastructure.
“TRAIDE helped us identify the right potential partners as well as ‘translating’ our business solution to public sector language.“
Zweder Wurfbain, CEO of Nedamco Africa
How TRAIDE Catalyze Water Initiative with Local Knowledge and Strategic Partnerships
TRAIDE Foundation has played a key role in developing the foundation of Nedamco Africa’s business model and supporting partnership building. We provided important local insights on the challenges and business opportunities in the water and digital sectors. Together with Nedamco, we brainstormed digital solutions, developed a business model, and identified key stakeholders to partner with. This collaboration resulted in Nedamco’s ‘Digital Talent as a Service’ initiative, partnering with Microsoft and the Mastercard Foundation to train young tech workers in Ethiopia.
Check Out our Investment opportunity report in water sector
TRAIDE’s support has extended beyond Ethiopia, assisting Nedamco in expanding into Rwanda, where similar water solutions are being adapted. Through TRAIDE’s office in Kigali, we connected Nedamco with key stakeholders to effectively scale their initiatives to this new country.
First Steps Towards More and Better Quality Water for Dire Dawa
On May 30, 2024, the Catchment City Waste (CCW) project was inaugurated by Ethiopia’s Minister of Water and Energy, the Mayor of Dire Dawa, and the Dutch Ambassador to Ethiopia. This transformative initiative aims to address the city’s water challenges by ensuring that leaks are repaired, infrastructure is improved, and clean water reaches over 500,000 residents in Dire Dawa.
The CCW project features partnerships with Dutch organizations such as Microsoft Netherlands and the knowledge institute Deltares. Together with local authorities like the Dire Dawa Water Supply and Sewerage Authority and regional government entities, they are committed to creating a sustainable water management system that not only improves access but also ensures the safety and quality of water for all residents.
“By using Microsoft’s advanced cloud and AI technologies, this Digital Twin solution showcases the power of technology in enhancing water management and security. Optimizing water usage and distribution, this project sets a precedent for similar initiatives across the continent.”
Anke den Ouden, CEO of Microsoft Netherlands
Scaling Sustainable Water Solutions Across Africa
The CCW project aligns with the Water Action Agenda and will accelerate progress toward Sustainable Development Goal 6. It is the first step toward scaling these solutions to cities facing similar challenges. By leveraging the power of digital twin technology and sustainable financing through green bonds, Nedamco aims to attract more private sector investment and replicate its model across more cities in Ethiopia and Rwanda.
TRAIDE Foundation empowers the private sector to develop sustainable solutions for development challenges in emerging economies. We support national and international businesses through local and dedicated expertise to help them achieve their impact potential.
Are you interested in collaboration? Contact us about your impactful business solution at [email protected].
