The investment community is becoming more aware of investment opportunities in water.
The water sector is very broad, encompassing conventional utility plays, water-related infrastructure, pumping, filtering and equipment companies, and water rights.
Emerging investment sectors such as desalination, wastewater treatment and recycling, new irrigation technologies and smart water metering and monitoring systems are also gathering momentum.
Aging Infrastructure – The United States is facing a veritable water infrastructure crisis, with many municipalities losing as much as 60% of their water as it passes through leaky and poorly maintained pipelines. Many pipes have not been replaced for the better part of a century. As water demand grows, the nation can no longer afford to put off much-needed maintenance, which according to the Environmental Protection Agency (EPA), requires at least $500 billion over the next 20 years.
Investing in Water Rights – For oil billionaire T. Boone Pickens, water rights and ownership is an attractive investment. Pickens is the largest individual water owner in the United States. His water rights include the Ogallala Aquifer in the Texas panhandle – the third largest aquifer in the world. The Ogallala Aquifer supplies 27% of all irrigation needs in the United States, including 70%-90% of the irrigation water in Kansas, Texas and Nebraska, which are three of the most important grain producing states in the nation.
A Global Opportunity – Although the United States has the largest and most developed water market, many companies are finding opportunity in emerging markets, particularly in Asia. China, with 21% of the world’s population but only 7% of global water resources, is in a particularly precarious position as it seeks stable water resources to fuel industry and population growth.