Water utilities around the world are facing a growing need for investment.
“On a global level, a total of $7.5 to $9.7 trillion is needed in investment for water and sanitation and related equipment” over the next 15 years, CitiGroup reported in an analysis released last month.
This pattern is playing out with the Brazilian water utility Sabesp, which indicated this month that it may raise new equity, according to The New York Times. Sabesp is the world’s fourth-largest water and sanitation company.
“Sabesp says its 45,000 miles of pipes leak 31 percent of the water carried by its system. And 13 percent of the population in the metropolis of São Paulo has no access to proper sanitation, while many people still lack running water,” the report said.
The challenges at Sabesp are representative of utility trends around the world, and analysts say other utilities may follow suit.
“About $1 trillion of the total is associated with Latin America, with larger expenditures required in Europe, North America and developed Asia. A Brazilian water utility’s capital raise won’t be the industry’s last,” the report said.
Water infrastructure is a priority for the Organisation for Economic Co-operation and Development (OECD), an intergovernmental economic group. The OECD Secretary General Angel Gurría addressed this issue in a speech three years ago.
“We need to trigger action, by governments, cities, financiers, service providers, water users, and civil society, to ensure that existing infrastructure finance is used more efficiently and further funds are provided where necessary,” he said.
He called on governments to explore new financing instruments for infrastructure, commending the U.S. for the federal loan programs. The Drinking Water State Revolving Fund (DWSRF) accounts for about a tenth of the U.S. EPA budget. The fund provides low-interest loans to states for drinking water projects.
To read more about how water and wastewater systems are dealing with infrastructure issues visit Water Online’s Asset Management Solutions Center.
Image credit: “Money” Pictures of Money © 2014, used under an Attribution 2.0 Generic license: https://creativecommons.org/licenses/by/2.0/