It also won the category for coastal and biodiversity management and urban beautification in the same competition.
Mossel Bay won prize money of R70 000 for its second place and also won compost to the value of R150 000 for use in its projects.
The competition was won by the Drakenstein Municipality (Paarl) while Swartland (Malmesbury) came third.
Mossel Bay Executive Mayor, Alderlady Marie Ferreira, said she was absolutely delighted with this award and that it is proof of Council's commitment to protecting and caring for the environment.
"Achievements like these do not come without innovation, proper planning and hard work, and I cannot thank the Municipal Manager and the employees of the municipality enough. We also could not have done this without our partners, such as the Mossel Bay Environmental Partnership, the Oyster Bay Reserve, the Garden Route Casino Trust and PetroSA for having made this possible," she said.
The awards were announced by Mr Anton Bredell, Minister of Local Government, Environmental Affairs and Development Planning, at a function at Elsenburg, Stellenbosch.
In the field of biodiversity Mossel Bay listed the estuary restoration project, the strategic fire break project and the St Blaize Biodiversity Forum Project. The Municipality also adopted a coastal management strategy, in which several projects were listed and added to the various departmental scorecards. A Municipal Coastal Management Committee was also established as required by law.
Estuary restoration and rehabilitation projects were undertaken at Pansy Cove, Twee Kuilen, Bayview, Hartenbos, Little Brak River and Great Brak River. The projects involved inter alia the removal of alien vegetation and the planting of indigenous vegetation.
The municipality increased the number of Blue Flag beaches under its control to three and also developed a coastal management strategy. Beach clean-ups were carried out on a regular basis.
In the field of waste management, the municipality detailed its practices with regard to illegal dumping, which included the daily monitoring by cleaning teams in various areas, the collection of waste by entrepreneurs and removing it to transfer stations.
The innovative Entrepreneurs Project, which was started in 2006, was also listed. Also a poverty alleviation and job creation project, the project is one of the main reasons for Mossel Bay's growing reputation as one of the cleanest towns in the country. The project created 260 jobs and is sustained by Council with an annual budget of approximately R6-million.
The municipality has embarked on several energy efficiency and conservation projects, such as the residential load management project in conjunction with Eskom, and adopting a policy that all new houses should implement certain energy efficient measures. It also completed an energy efficiency project involving street lighting and office lighting LED retrofits, LED traffic lights and a residential roll-out of compact fluorescent lighting. The average annual cost saving as a result amounts to R9.5-million.
Several non-conventional water sources such as seawater desalination, irrigation with treated effluent and rainwater harvesting were implemented, with the latter having become a requirement for the approval of all new residential developments.
The municipality also achieved the prestigious Blue Drop status in 2012 for two of its plants in the drinking water certification scheme of the Department of Water Affairs. The coveted Green Drop status for waste water treatment was also achieved for two of its plants.

Anton Bredell, Western Cape Minister of Local Government, Environmental Affairs and Development Planning, at the award ceremony with Mossel Bay's Executive Mayor, Alderlady Marie Ferreira, the municipal manager dr Michele Gratz and Estelle Burger, Senior Environmental Officer at the Mossel Bay Municipality.