The United Kingdom government has announced the launch of the first two projects under its Room 2 Run guarantee program. The projects, an €80m Egyptian wastewater project and a €37m water sanitation project in Senegal, both focus on water supply and sanitation and will offer benefits to millions in their respective African countries.
Andrew Mitchell, UK Minister of State for Development and Africa, made the announcement on Wednesday, at a joint press briefing in Sharm El Sheikh, held on the sidelines of the African Development Bank’s Annual Meetings.
Mitchell was joined by Rania Al-Mashat, Egyptian Minister of International Cooperation, African Development Bank Senior Vice President Bajabulile Swazi Tshabalala and Senegal’s Minister of Economy, Planning and Cooperation, Oulimata Sarr.
The Room to Run Guarantee, first announced at COP-26, is a $2 billion guarantee provided to the African Development Bank by the UK with $1.6 billion in cover, and with City of London insurers covering $400 million. By partially protecting the Bank against the risk of default on some of its loans, the Room to Roam Guarantee enables the Bank to provide an additional $2 billion of climate finance to Africa by 2027, with a 50-50 split between adaptation and mitigation.
In Egypt, the Water Recycling for Agriculture – Gabel El Asfar Wastewater Treatment Project, is the largest in Africa wastewater treatment plant in terms of capacity and the second largest in the world. It produces up to 60% of the electricity it needs for running the plant.
This project aims to increase arable lands by 70,000 acres addressing the food security issues. It will also increase access to safely managed sanitation services; increase wastewater treatment plant compliance standards, and create jobs, benefitting 5 million people.
In Senegal, the Access to Safe Water and Sanitation Services to build Sustainable Resilience in Disadvantaged Areas will reach 1.45 million people, out of which 51% are women who will benefit from improved access to drinking water and sanitation.
Tshabalala, noted that rising water and decreasing rainfall are among the climate change impacts threatening Senegal’s development goals. “Today’s announcement is significant. We are looking forward to seeing how this risk financing helps these first projects reach measurable outcomes and impact the communities we serve,” she said.
Mitchell said the projects were exactly the kind of investments we really hope to unlock through Room2Run. “The project will have an incredible impact on people’s health and livelihoods,” Mitchell said of the Senegal project.
“I look forward to seeing how these investments and water resources flow over the next year and discussing how else we can use this great initiative to support African Development Bank investments across Africa,” Mitchell added.
Dr. Al Mashat described the Gabel El Asfar Wastewater Treatment Project as a very special one for Egypt and stressed the importance of partnerships in crowding in new resources for development projects in Africa.
“Creating headroom for multilateral development banks (MDBs) to extend financing to emerging economies for climate action is a key objective of MDB reforms. We commend the UK government for their initiative: the Room 2 Run Sovereign Guarantee, supporting the African Development Bank Group with $2 billion to help the continent accelerate climate action and meet the Nationally Determined Contributions,” Al Mashat said.
“The third stage of the project will expand to serve 5.5 million more people, emphasizing that water security is at the core of building resilience. This is an example to be followed by other governments,” she added.
Being a Sahel country, Senegal is located at the epicenter of climate change, Sarr said. The Senegal project comes under the country’s Access to “Water for All” pillar of its development plan.
“The commitment to provide climate finance is real and the amount ($2 billion) is showing scale,” Sarr said as she thanked the UK government. She said Senegal would welcome any funding that would enable them to scale up and fast track climate finance.
“I think that this is what this funding is providing to us,” Sarr said.