Water: Investments wanted
“The global water industry amounts to $620 billion in
revenues. But in the next 25 years, up to $25 trillion
could be spent on global water and wastewater
infrastructure expenses. The result is that water is a
compelling long-term investment”
- Water Tech Capital
Our world contains the same amount of water it did thousands of years ago. We cannot create it, so we have to manage it - smartly.
But demand for water, and the services it provides, is rising rapidly. Globally we use 2.1 trillion cubic meters of water every year – 17.5 million gallons every second. By 2025 nearly two-thirds of the world's population will be
water stressed due to demands on freshwater supplies because of growing populations.
That’s just 10 years away, and already promising investments in water are being created. This is good news, because it is estimated that to fully overcome challenges to the efficient allocation of water, over $1 trillion will
need to be invested in the next 20 years. Those investments will take various forms from hydropower for renewable energy, to reclamation projects for irrigation, to cooling applications for energy generation, and more.
The water industry provides investors with several benefits: attractive inflation linked pricing; monopolistic business models; sticky customers; high visibility cash flows; and long term contracted revenues. As a non substitutable resource, water's inelastic demand insulates it from economic cycles compared most other
commodities and investments. Water rates have demonstrated positive pricing power, historically
increasing at a rate greater than inflation, largely driven by infrastructure upgrades and expansion. There are a growing number of privatization opportunities as weakened federal and state governments look for private partners.
Our focus is to coordinate investments/acquisitions, or public private partnerships related to water infrastructure (dams, desalination, wastewater treatment plants, drinking water providers, agricultural irrigation systems, etc.). We are actively looking for projects that meet several criteria:
a) generate above average returns,
b) remain profitable through changing circumstances,
c) consider social and environmental impacts.
We are limiting our participation to those projects which we believe to be robust and resilient in light of climate change analysis, and regulation. While our search is global, our priority focus (in addition to the U.S.) is on areas
in which our principals have considerable experience, such as: Peru, Colombia, Albania, Egypt, Israel, and South Africa.