Financing for Resilient and Green Urban Solutions in Tshwane, South Africa
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The Initiative on Financing for Resilient and Green Urban Global Solutions (FRUGS) Financing for Resilient and Green Urban Solutions in Tshwane, South Africa The Initiative on Financing for Resilient and Green Urban Global Solutions (FRUGS) Financing for Resilient and Green Urban Solutions in Tshwane, South Africa First published by United Nations Human Settlements Programme (UN-Habitat) 2020 All rights reserved HS Number: HS/063/19E ISBN Number(Series): 978-92-1-133389-3 ISBN Number:(Volume) 978-92-1-132855-4 Chief Editors and Managers: Xing Quan Zhang, Irina Eichenauer and Wolfgang Ryll Principal Author: Luxien Ariyan Expert Team: Cristina Gregorio, Godfred Alufar Bokpin, Luxien Ariyan, Steven Segerlin, Nicholas Ngece, Michael Bookstaber, David Rosen, Hongwei Wang, Guodong Chen, Simon Gusah, Frank Gyamfi Yeboah, Joseph Kofi Teye, Nicolo Cannizzaro, Daniel Duman, Tekalign Tsige and Mercy Gichora Disclaimer: The designations employed and the presentation of material in this publication do not imply the expression of any opinion whatsoever on the part of the secretariat of the United Nations concerning the legal status of any county, territory, city or area or its authorities, or concerning the delimitation of its frontiers or boundaries regarding its economic system or degree of development. Excerpts may be reproduced without authorization, on condition that the source is indicated. Views expressed in this publication do not necessarily reflect those of the United Nations Human Settlements Programme, the United Nations and its member states. The Financing for Resilient and Green Urban Global Solutions (FRUGS) Initiative is a partnership among UN-HABITAT, KfW on behalf of and with financial support of the German Federal Ministry for Economic Cooperation and Development (BMZ), African Development Bank, Inter-American Development Bank and Shelter Afrique. Executive Director: Maimunah Mohd Sharif Deputy Executive Director: Victor Kisob Directors: Raf Tuts, Christine Knudsen Head of Knowledge and Innovation: Eduardo Moreno The Initiative on Financing for Resilient and Green Urban Global Solutions (FRUGS) Aerial view of Tshwane city hall and Ditsong National Museum of Natural History in the heart of Pretoria, South Africa © SHUTTERSTOCK / Sopotnicki iv | Financing for Resilient and Green Urban Solutions in Tshwane, South Africa The Initiative on Financing for Resilient and Green Urban Global Solutions (FRUGS) Financing for Resilient and Green Urban Solutions in Tshwane, South Africa | v The Initiative on Financing for Resilient and Green Urban Global Solutions (FRUGS) Table of Contents GLOSSARY ............................................................................................................................................................................................1 EXECUTIVE SUMMARY .....................................................................................................................................................................4 1.1. City Profile ..................................................................................................................................................................................................4 1.2. Housing Needs Assessment .................................................................................................................................................................7 1.3. Financing Opportunities .........................................................................................................................................................................9 1.4. Recommended Further Intervention and Projects in Tshwane ................................................................................................... 11 CHAPTER 1 URBANISATION, ECONOMIC AND FINANCIAL SYSTEMS ................................................................................. 15 1.5. Background ............................................................................................................................................................................................. 16 1.6. Population Growth and Urbanisation Patterns ............................................................................................................................... 19 1.6.1. Current Status of Urbanisation and Household Structure ................................................................................................. 21 1.6.2. Projection of Urbanisation by 2030 ........................................................................................................................................25 1.7. Economic System, Structure and Development ............................................................................................................................. 31 1.8. Jurisdictional Design and Environment ........................................................................................................................................... 36 1.9. Municipal Financial System ................................................................................................................................................................ 36 1.10. Financing of Housing, Infrastructure and Urban Services .......................................................................................................... 40 1.10.1. Unconditional Grants .................................................................................................................................................................. 42 1.10.2.Conditional Grants ...................................................................................................................................................................... 42 1.10.3.General Transfers ....................................................................................................................................................................... 42 1.11. Assessment of Housing Needs ......................................................................................................................................................... 45 CHAPTER 2 FINANCING HOUSING, INFRASTRUCTURE AND URBAN SERVICES ............................................................ 48 2.1. Financing Housing ................................................................................................................................................................................ 49 2.2. Financing Infrastructure and Urban Services................................................................................................................................. 54 2.2.1. Transport .......................................................................................................................................................................................55 2.2.2. Energy and Power ..................................................................................................................................................................... 58 2.2.3. Water and Waste Management ............................................................................................................................................... 61 CHAPTER 3 FINANCING RESILIENT AND GREEN URBAN SOLUTIONS .............................................................................. 63 3.1 Financing Needs ................................................................................................................................................................................... 64 3.1.1 Housing ..........................................................................................................................................................................................66 3.2 Current Financing Sources and Flows ..............................................................................................................................................73 CHAPTER 4 IMPACT OF FINANCING INSTRUMENTS ...............................................................................................................77 4.1 Impacts on the Financial System ....................................................................................................................................................... 78 vi | Financing for Resilient and Green Urban Solutions in Tshwane, South Africa The Initiative on Financing for Resilient and Green Urban Global Solutions (FRUGS) 4.2 Challenges faced by different actors ............................................................................................................................................... 83 4.2.1 Central government .................................................................................................................................................................... 83 4.2.2 Investors ........................................................................................................................................................................................ 84 4.2.3 Residents ...................................................................................................................................................................................... 85 CHAPTER 5 ALTERNATIVE FINANCIAL INSTRUMENTS .......................................................................................................... 88 5.1 New Challenges, Approaches and Instruments ...........................................................................................................................