Sustainable Asset Valuation of Nature-Based Flood Mitigation Infrastructure in Drakenstein, South Africa

The Western Cape of South Africa faces threats from increasing flooding. In Drakenstein Municipality, flooding from the Berg River and its tributaries has caused severe damage to housing, transportation, and health infrastructure. Resulting from a combination of climate-related extreme rainfall, human encroachment on floodplains, and degraded river and wetland systems, severe flooding is threatening the health and safety of communities, the local economy, and biodiversity.

River restoration has the potential to absorb some of these impacts. Just 10% of rivers in the Western Cape are considered ecologically healthy, with the remainder classified as degraded. Well-functioning rivers provide essential ecosystem services such as flood protection and water supply for agriculture, domestic use, recreation, and industry, while also functioning as valuable assets for tourism and culture.

To address the climate risks and improve water management, Drakenstein is exploring the use of nature-based infrastructure (NBI). As part of the project Transformative Adaptation in the Berg River Catchment through Nature-Based Solutions, it aims to strengthen existing riverine management initiatives and identify pilot NBI projects based on climate change vulnerability analysis. The goal is to increase flood resilience and water retention by rehabilitating riverbanks, riparian areas, and floodplains.

The Sustainable Asset Valuation (SAVi) report analyzes the outcomes of investing in NBI in river sub-catchments by the city of Paarl. We assessed two infrastructure scenarios:

1. No-Action/Business-As-Usual scenario, consisting of a combination of more frequent and intense extreme flood events, leading to increased socio-economic impacts and ecosystem deterioration.
2. NBI scenario spanning 214 hectares, including floodplain and riverbank restoration, constructed wetlands, and urban green spaces.

We find that in the NBI scenario, for every ZAR 1 invested, between ZAR 1 and 5 could be returned over a 25-year period, amounting to net benefits of up to ZAR 600 million (USD 34.2 million). The environmental, social, and economic benefits of NBI in Drakenstein include avoided flood damages, the value of recreational areas, job creation, and reduced mental health impacts. These benefits and avoided costs differ considerably depending on the four climate scenarios we modelled.

The study demonstrates that implementing NBI is a key strategy for restoring ecological integrity and protecting communities from floods, while also offering a wide array of socio-economic benefits for Drakenstein. NBI is particularly valuable in scenarios with frequent and intense floods, highlighting the benefits of proactively investing in NBI for climate resilience.