Vol 10, Issue 8 (August 2009)

Need to know

• IMPACT OF RECESSION ON GLOBAL WATER BUSINESS

  Half-year results from Veolia, Nalco, GLV, Kemira and ERI have shed further light on the continuing impact of the global recession on the water business.

• WONTHAGGI PROJECT FINANCING CLOSE

  The consortium of Suez Environnement, Thiess and Macquarie Capital won the race for Wonthaggi – Australia’s first desalination BOT – at the end of July, and is looking to close the A$4.5 billion (US$4 billion) financing by 4th September.

• TREND TOWARDS PRIVATE WATER INVESTMENT IN ASIA & MIDDLE EAST CONTINUES

  Morocco and Egypt are also considering the private finance model for major new desalination initiatives.

• VOTING OPEN IN IDA BOARD ELECTION

  The voting has opened for places on the International Desalination Association board. With 35 candidates vying for 21 places, it is going to be closely fought in every region.

• CORRECTION

  Biwater will not – as suggested here last month – be sanctioned by the Nigerian government for delays in the delivery of two wastewater treatment plants serving Abuja (see GWI July 2009 p19).

Analysis

• The next big thing in wastewater: biotechnology

  Christopher Gasson looks at how the trend towards greater investment in wastewater could get a major boost from the biotech industry

• Insight - David Lloyd Owen

  Glints and hints: recent studies cast some light on water financing.

• Global RO / NF Membrane Market Forecast to 2016 - CHART

  This month’s chart comes from our Water Technology Markets report. It shows how the high-pressure (reverse osmosis and nanofiltration) membrane market is expected to develop over the next few years.

General

• Kuwait eyes maiden IWPP at Az-Zour

  One of the Gulf's last outposts of traditional procurement is weighing up an IWPP. 50% of the project will be floated on the stock exchange.

• A newcomer to the Gulf IWPP model

  The concept of water BOTs in Kuwait is not new. The key lies in the interpretation of new legislation.

• Coming to terms with Shuweihat 2

  The terms of the financing package for the Shuweihat 2 IWPP are still hanging in the balance. A lack of consensus could mean the project goes down the public procurement route.

• Egypt to expand PPP scheme to desalination

  The economic arguments for desalination on Egypt's eastern seaboard have proved decisive. Feasibility studies are set to kick off in early 2010.

• State support for Wonthaggi BOT financing

  The award of the Melbourne desal plant marks a turning point in the Australian desal market. The high cost means the financing has taken longer to put together than planned.

• Risks and rewards in Australian desal

  The State of Victoria opted for PPP delivery at Wonthaggi to reduce costs. It is still one of the most expensive desal plants ever contracted.

• UK drags European water index down

  A clamp-down from Ofwat wiped more than £450 million off the value of listed UK water utilities. It helped the GWI European Water Index to under perform for the second month in a row.

• Ofwat punishes UK water shareholders

  The regulator has taken a hard line in its interim determination for 2010-2015. All of a sudden, the UK water sector has lost a lot of its investment appeal.

• Mouchel bags smart metering review

  Universal smart metering is still a pipe dream for the UK water sector. New research could bring it one step closer.

• New Galician government to fast-track WWTPs

  The private sector will play a key role in bringing Galicia’s wastewater treatment standards into line with European directives. Private finance is not a priority

• Catalunya unveils €373 million water reuse plan

  A new initiative aims to increase the production and take-up of reclaimed wastewater in Catalunya. It is not just industrial users who will benefit.

• End of the “entente cordiale”

  The shuffling of stakes in French water concessions between Veolia and Suez Environnement should be completed by Christmas. Who got the better deal?

• SAM broadens its suite of water funds

  The growth of Islamic investments has convinced one of the leading water fund managers to create a Shariah compliant water fund. It also plans to launch a small-cap investment vehicle later this year.

• EBRD eyes first investment in Turkish water sector

  After embracing Turkey at the end of last year, the EBRD is ready to make its first investment in the country’s water sector. The commitment involves both debt and equity.

• A brownfield strategy with green shoots

  Khalil Attia, chief executive of Tunisia’s Office National de l’Assainissement (ONAS) spoke to GWI about plans to upgrade the country’s wastewater treatment infrastructure.

• Upping the ante in Greater Tunis

  Bigger proves better for Tunisia’s flagship wastewater project.

• Tunisia gets to grips with industrial effluent

  A scheme to separate industrial wastewater from domestic effluent is already attracting funding. A new study is being commissioned to determine the best approach.

• Epure gains Middle East foothold

  Chinese firm Epure International is hoping that a letter of intent with Marafiq in Saudi Arabia will be a stepping stone to global opportunities.

• F1 expansion stalls over land issues

  A cocktail of setbacks could ensure that the project remains stalled for some time.

• Libya outlines desal expansion plan

  The Libyan government’s ambitious procurement programme envisages an exponential rise in desalination capacity over the next six years.

• Abu Dhabi sewerage firm to operate independently

  Four years after its creation, ADSSC will now stand separately from its former parent.

• EAPC plans desal facility in Eilat

  The Israeli oil transporter wants to build a desal plant on land it owns in Eilat. Pipeline costs will push the price tag up.

• Restrictive clause slows US water projects

  The “Buy American” clause in the Recovery Act is slowing the delivery of water and wastewater infrastructure in the US. It has also accelerated accusations of protectionism.

• $1 billion of water investment goes a long way

  A new report from the Clean Water Council sets out the broader impact of water investment on the US economy. A copy has been sent to every elected official in Congress, says Kathy Shandling.

• New acts of appropriation

  Congress is chewing over a brace of important infrastructure bills. Are they everything they’re cracked up to be? Kathy Shandling reports.

• Tariff rises fuel blame game

  Tariff rises in China are drawing heavy criticism. Operators must convince customers that service improvements are on the way. Kathy Liu reports.

• Befesa’s breakthrough in Chinese desal finance

  The financing of the 100,000m3/d Qingdao desalination plant is an important milestone for the Chinese market. It has taken three and a half years to close.

• Japan’s global water reuse ambitions

  38 private water companies are leading the drive to boost Japan's international presence. Twenty more are waiting to jump on the bandwagon.

• Indian PPPs inspire “irrational” bidding

  Private companies are eager to become established in the market for Indian water concessions and other PPPs. Only time will tell if the projects under consideration become viable investment opportunities.

• The price of free water in South Africa

  The right to clean water is enshrined in the constitution. As network coverage increases, the trend is towards giving more free water to fewer people.

Brief

• European Water Market News - In Brief

  Three groups responded to the request for expressions of interest in purchasing a 23.02% stake in Thessaloniki water company EYATH.

• Middle East Water Market News - In Brief

  A consortium of VA Tech Wabag and Iran’s Jyane Construction has won a $76 million 6-year contract to design, build and operate a 100,000m3/d WWTP to serve the city of Shiraz in Iran.

• American Water Market News - In Brief

  RWE has sold a further 35 million shares of American Water, reducing its stake in the company to 26.5%.

• Asian Water Market News - In Brief

  Boustead Holdings' plans for a renounceable rights issue of up to 260,412,729 new shares were approved at an EGM on 29 July.

Market insight

• A state of suspended animation

  Tighter environmental regulations mean that bulk filter media are slowly losing out to membranes in water treatment applications. They are not going without a fight, as Gord Cope discovers.