Water Finance in South Africa: Rent-to-Own and Water Purchase Agreements

Water security has become a board-level concern in South Africa. Supply interruptions, ageing municipal infrastructure and rising tariffs push businesses to take control of their own water. The equipment to do that, from boreholes to treatment plants, carries real capital cost. Water finance lets a business secure that equipment without paying the full amount upfront.

This guide explains the two main water finance structures, what they fund, and how an installer can offer them through one application process.

What is water finance?

Water finance is a funding arrangement that lets a business acquire water equipment and pay for it over time, rather than settling the full capital cost upfront. It works much like solar finance, applied to water security assets.

The principle is simple. Water equipment is a productive asset, so a lender can fund it against the value it delivers. The business gets resilient water supply now and spreads the cost across the years it uses the equipment.

For installers, water finance opens a second product line alongside energy. The same platform that handles solar and battery deals can handle water deals too.

What can be financed under water finance?

Water finance covers equipment, not general business costs. The financeable items typically include:

• Boreholes and pump systems
• Water storage and reticulation equipment
• Filtration and treatment plants
• Reverse osmosis and desalination kit
• Greywater and water reuse systems

The test is the same as for energy assets: the lender funds equipment that produces or secures a measurable resource. General operating costs do not qualify. If you also handle energy projects, the same logic applies to solar PV and batteries, covered in financing batteries and backup power for energy security.

What is a Water Purchase Agreement?

A Water Purchase Agreement is a contract where the client pays for the water the system delivers, rather than for the equipment itself. A funder owns the equipment and the client buys the output.

This mirrors the Power Purchase Agreement model used in solar. The client avoids capital outlay entirely and pays a usage-based rate. The funder carries the asset on its books and earns a return from the water sold over the contract term.

Water Purchase Agreements through ArkFlow run up to 10 years. They suit clients who want to treat water as an operating expense rather than a capital purchase, and who value predictable, usage-linked pricing. The structure works much like the comparison we draw in PPA vs Rent-to-Own.

What is Water Rent-to-Own?

Water Rent-to-Own is a structure where the client rents the water equipment over a set term and takes ownership at the end. It blends the cash-flow benefit of a rental with the long-term value of ownership.

The client pays a regular instalment over the term. During that period the funder retains a security interest in the equipment. At the end of the agreement, ownership transfers to the client. ArkFlow offers Water Rent-to-Own up to 10 years.

This suits businesses that want to own their water infrastructure eventually but cannot or do not want to fund the full capital cost on day one. For a wider view of how rental and ownership structures compare across energy and water, see solar finance structures compared.

How does the water finance process work?

The deal flow for water finance is the same guided process ArkFlow uses across all asset classes:

1. You propose an indicative finance proposal to your client. The client accepts.
2. ArkFlow onboards you with the relevant lenders.
3. The client completes a guided, step-by-step finance application.
4. The deal is prequalified and KYC-checked, then packaged for the bank.
5. Offers come back, the client selects one, the contract is drafted and the first milestone payment is released.

There are three possible funding routes: the client's own bank, your own lenders, or the ArkFlow lender network. Major South African banks that can fund deals include FNB, Absa, Standard Bank, Nedbank, Investec and Capitec. To understand the full journey, read how solar finance origination works.

What does water finance cost the installer?

Nothing to start. ArkFlow's owner account is free forever for installers, with no card required.

The platform adds 1% of capex to the bill of quantities where a deal funds through its lender panel, billed as the bank releases funds. You add the 1% to your bill of quantities or quote. If the deal is not funded, there is no fee. This keeps water finance a low-risk addition to your offering.

Ready to add water finance to your product range? Sign up free and build your first water proposal.

Frequently asked questions

How long can a water finance agreement run?

Both Water Rent-to-Own and Water Purchase Agreements run up to 10 years through ArkFlow. The right term depends on the equipment, the client's cash flow and the lender's underwriting.

Can I bundle water and solar in one finance deal?

You can present both to the same client through one platform and one application process. The structures and terms differ by asset class, and the lender underwrites each on its own merits.

Are the proposal figures a firm price?

No. Indicative proposal figures are indicative only and not a credit offer. The lender carries out formal underwriting before issuing any binding offer.

Who owns the equipment under a Water Purchase Agreement?

Under a Water Purchase Agreement, the funder owns the equipment and the client pays for the water it delivers. Under Water Rent-to-Own, ownership transfers to the client at the end of the term.