As African leaders convene in Addis Ababa for the 39th African Union Summit, the conversation is shifting from what holds the continent back to what will propel it forward. Under the 2026 AU Summit theme, "Assuring sustainable water availability and safe sanitation systems to achieve the goals of Agenda 2063," the importance of water is being redefined: water, more than a necessity, is a strategic pillar for economic prosperity, a cornerstone of public health, and a shield for resilience.
By elevating water and sanitation to the highest political level, the African Union is urging bold leadership to unlock economic opportunity, safeguard communal well-being, and fortify Africa’s future.
While the challenge is vast—over 400 million Africans lack access to safe drinking water—the African Development Bank Group is supporting this decisive step to translate the AU-led Africa Water Vision 2063 from blueprint into reality.
At the core of this shift is the New African Financial Architecture (NAFA), anchored in Bank President Sidi Ould Tah’s Four Cardinal Points strategic vision:
- Mobilising Capital at Scale: Transforming water into a high-value, bankable asset class to bridge the $70 billion financing gap per year.
- Reforming Financial Architecture: Augmenting the African Water Facility—our premier accelerator for investment—while leveraging the Bank’s AAA credit rating to deploy green bonds, de-risk private capital, and scale sustainable resources.
- Harnessing Demographic Dividends: Converting "time-poverty" into economic productivity for a population projected to hit 2.5 billion in 2050.
- Building Resilient Infrastructure: Reversing the trend of water stress to position the resource as the bedrock of long-term security. Aligned with the Water–Food–Energy–Ecosystem nexus framework for managing interconnected resources, a single investment can simultaneously power industry, expand irrigation across Africa’s largely rain-fed farmland, and secure safe drinking water for millions.
An innovative approach: multi-purpose dams
Through NAFA, the African Development Bank Group is positioning multi-purpose dam projects as essential to addressing the continent’s water crisis, framing them as strategic infrastructure investments that can power industry, secure food supplies, and protect public health.
“Multi-purpose dam projects enable equitable sharing of water resources for diverse needs by generating transformative impacts on a large scale, integrating the water-food-energy-ecosystem nexus and creating resilient systems where joint public and private sector participation can drive sustainable growth, innovation, and shared prosperity while fostering cross-sector collaboration,” said Mtchera Johannes Chirwa, Director of the Bank Group's Water Development and Sanitation Department.
Multi-purpose dams enable large efficiency gains by pooling use of infrastructure: a single installation generates multiple impacts across several sectors, including water supply, irrigation and energy production. Water used for electricity generation can be reused downstream for other economic activities such as irrigation and the maintenance of ecological flow.
At the local level, this approach ensures a supply of water to communities, and, at regional and national levels, promotes irrigation and electricity production. Finally, the financial viability of multi-purpose dam projects is supported by a cost-sharing model. Electricity generation and irrigation generate revenues that contribute to maintenance of the dam, offsetting limited revenues from domestic water charges that often fail to cover operating and maintenance costs.
An example of this multi-purpose approach is the ongoing Thwake Dam project in Kenya, which has attracted Bank Group support. Located at the confluence of the Athi and Thwake rivers, the 80.5-meter-high dam, with a capacity of 688 million m³ is being co-financed by the Kenyan government and the African Development Bank Group at a cost of around $635 million. The project—a flagship under the country’s Vision 2030 blueprint—is scheduled for completion in July 2027 and is expected to benefit 1.3 million people by providing drinking water, hydroelectric power (20 MW), and irrigation for 40,000 hectares of agricultural land. It is projected to sustainably transform a semi-arid region of Kenya affected by drought, ensuring food security and creating local jobs.
Kenya - Thwake Multi-purpose Water Development Program | Flickr
The Bank-supported Muvumba Multipurpose Water Resources Development Program in Rwanda also illustrates the approach. Approved in October 2020 with €121.5 million in financing, the project centers on a 39-meter dam on the Muvumba River—now 36.6% complete and due for completion in October 2026—that will store 55 million meters3 of water. Serving Nyagatare District, it will deliver 50,000 cubic meters of drinking water daily, irrigate 10,000 hectares of farmland and generate 1 MW of hydropower electricity. The program also strengthens climate resilience through catchment protection, forest management and local capacity building, and is expected to benefit about 800,000 people and also support fisheries and livestock. Revenue from hydropower will help cover operation and maintenance costs.
According to the International Renewable Energy Agency (IRENA), the cost of electricity produced by new hydropower projects is among the lowest among renewable energy sources, which underscores the attractiveness of multi-purpose dam infrastructure.
In Burundi, a hydropower project has transformed lives
The city of Gitega and surrounding localities in Burundi struggled with frequent power cuts and voltage drops due to insufficient supply of electricity. The problem has been addressed thanks to the installation of more efficient transmission lines and the provision of hydroelectric power from the Rusumo Falls dam project, which was completed and commissioned in 2024. The improvement has also been felt throughout the country, as a continuous and stable electricity supply has become available.
"The impact is clear to see," says Dr. Arnaud Ndorukwigira, a doctor and the deputy director of the Gitega Regional Hospital. “One of our patients was a mother who gave birth to premature triplets at six months. If we hadn’t had new incubators connected to electricity 24 hours a day, we couldn’t have taken proper care of these babies, and they would probably have died. Today, the premature infants are gradually gaining weight and their mother is very happy.”
The project received $107.11 million in funding from the African Development Bank Group, comprising $97.31 million from the African Development Fund and $9.8 million from the Nigeria Trust Fund. The World Bank and the European Union also contributed financing.
Commitment to the development of the water sector is fully aligned with Cardinal Point 4 of Bank President Ould Tah’s vision, which aims to “build -resilient infrastructure” along with “robust value addition”, while generating opportunities for young people and women.
To mobilise private capital for Africa’s water sector, the Bank Group is rolling out innovative financing tools—including green and sustainable development bonds and blended finance—leveraging its AAA credit rating to draw investors into a field long viewed as the preserve of the public sector. With rapid population growth, mounting ecological pressures and vast infrastructure needs intensifying the continent’s water challenges, the African Development Bank Group is positioning multi-purpose dams and strategic partnerships as the foundation for a more water-secure, resilient and prosperous Africa.
Source: AfDB