Browsing by Author "McCallum, Stephen Ron"

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    Private sector impact investment in water purification infrastructure in South Africa
    (Stellenbosch : Stellenbosch University, 2018-03) McCallum, Stephen Ron; Viviers, Suzette; Stellenbosch University. Faculty of Economic and Management Sciences. Dept. of Economics.
    ENGLISH SUMMARY : Access to safe drinking water (also called potable water) is a basic human right. Humanity is, however, facing a significant decline in the quantity and quality of available fresh water. The consequences of water crises on human health and economic activity are widespread and likely to deteriorate in future. Presently, millions of South Africans lack acceptable access to potable water, particularly those living in rural and peri-urban areas. Private sector involvement is increasingly needed to address the large and growing financing gap in water infrastructure. Given the limited academic research, the researcher conducted an extensive study on the motives, barriers and opportunities associated with private sector impact investment in water purification infrastructure in South Africa. A qualitative research approach was selected to explore and describe the topic under investigation. To address the primary and secondary research objectives, a conceptual framework was developed, validated and revised. Secondary data were collected and analysed by means of a comprehensive literature review. The result of this literature review was the development of the proposed conceptual framework which outlined the motives of impact investors, ten barriers and seven opportunities in impact investing in general. Furthermore, six barriers and seven opportunities specific to impact investments in water purification infrastructure were presented. An interview guide was developed based on these factors. A combination of judgement and snowball sampling was used to identify 20 experts in the impact investment market and local water provision process. Semi-structured personal interviews were then conducted with the experts. The transcribed interviews were coded using directed content analysis to identify common and contradicting responses which were used to revise the conceptual framework. The findings indicate that most South African impact investors are finance-first investors (they prioritise financial returns over social and/or environmental impact). The critical barriers to impact investments included the shortage of investment-ready deals and the lack of detailed and clearly formulated social and/or environmental impact objectives. Major barriers to impact investing in water purification infrastructure in South Africa centred on the lack of lifecycle support, the possibility of political interference and low financial return expectations. A primary opportunity that was identified in impact investing in general was the prospect to earn a financial return while making major social and/or environmental impact. The large public financing gap in water infrastructure and investing in a convergence of sectors through innovative technologies in water purification infrastructure were the foremost opportunities outlined in impact investing in water purification infrastructure. Based on the results, the researcher made recommendations for impact investors, other role players in the impact investment market, government officials and other policy makers, educators and the media. The main recommendation was to improve lifecycle support to facilitate the growth of small and medium-sized social enterprises in South Africa thereby increasing the number of investment-ready deals. Other recommendations included the development of a standardised format to social and/or environmental impact reporting and the implementation of regulatory reforms to encourage more private sector impact investments.