Windhoek is a city that does not have the luxury of permanent fresh water bodies in close proximity. Consequently, it has been committed to the integration of all dimensions of integrated water resource management to secure the supply of water to the city (van Rensburg, 2006). In particular, the city introduced water demand management in 1992, whereas previous water authorities had pursued a policy of unlimited water supply at low cost to the consumer. The demand management strategy concentrates on changing consumer habits by increasing public awareness of the importance of water saving and implementing a block tariff system that steeply increases cost with increasing water consumption. Other measures include the reduction of residential plot sizes, implementation of legislation to address water conservation in Windhoek, and improved maintenance and technical measures to reduce leaks. Evidence for the success of water demand management is the remarkable reduction in the water consumption by the late 1990s. In 1997, the total water use was equivalent to that of 1990, despite a 45 percent population increase (Kirchner and van Wyk, 2001; van Rensburg, 2006).

Reliance on local groundwater sources has a history in Namibia and has greatly helped to make the complex MAR scheme a reality. Conjunctive use was already practiced before MAR, after the much more unreliable surface water storages were added. The dams were used during periods of plenty and the aquifer during droughts. There was also the wisdom of regular investment into drilling and expansion of the well field during periods of plenty (Kirchner, 1981). The storage of surface water underground could be seen as a next logical step.

Finance Model for the MAR Scheme

Financing the operation of the MAR scheme, for which there was no precedent, posed new challenges and a unique model was developed:

• the source water, obtained primarily from the three-dam supply system, is bought from the bulk supply authority NamWater and sold to the municipality for storage in the municipal-run aquifer;
• the City of Windhoek pays NamWater the operational costs for the recharge water so that NamWater recovers its costs for the recharge water, but does not make a profit on water it sells to the municipality for banking in the Windhoek Aquifer;
• a profit is only realized when it is deemed that the artificially recharged water is being supplied by the City of Windhoek to consumers, at which time the city pays NamWater an additional amount for each cubic meter the city supplies from the Windhoek Aquifer;
• the evaluation of whether the city is serving artificially recharged water is assessed on an annual basis and becomes applicable only if more water is withdrawn from the aquifer in a given year than the aquifer’s average natural recharge rate, the agreed “safe yield” of 1.73 Mm³/year;
• the plan benefits both organizations and consumers as it improves the security of supply during extended periods of drought and affords NamWater income during droughts (when they sell less water); and,
• it can be argued that low-value water, which would have evaporated from the source dams, is now stored in the aquifer for use during times of water scarcity, thereby transforming it from low-value water to high-value water at the time of supply to consumers (Murray et al., 2018).