Vol 12, Issue 11 (November 2011)

Need to know

• INIMATABLE

  Spanish desalter Inima has been sold for €231 million to Korean engineering and construction group Gold Star.

• HYFLUMMOXED

  Hyflux has decided to finance the bulk of its proposed S$890 million (US$688 million) Tuaspring power and water plant from its own balance sheet, after failing to raise more than S$150 million (US$116 million) of non-recourse project finance for the plant.

• INVEOLIABLE

  The misery at Veolia Environnement continued this month with a new profit warning to accompany the third-quarter results.

• INSUEZIANCE

  Suez Environnement delivered a much more upbeat set of results, with 9-month revenues up 8.3% to €11 billion and EBITDA up 9.2% to €1.8 billion.

• INVESTABLE

  Liberation Capital, the venture fund headed by GE veterans Jeff Garwood, Fred Schmuck and Earl Jones, has invested $8 million in UK-based wastewater treatment specialist Bluewater Bio.

• DESALTABLE

  Qatar’s national water and electricity offtaker Kahramaa has decided to go for two major desalination expansions instead of one, as the country prepares for a rise in domestic demand and the infrastructure boom provided by the football World Cup (see story p18).

Analysis

• An eventful month

  Christopher Gasson reflects on a busy month of water events.

• David Lloyd Owen - Why universal water and sanitation coverage is the only target that matters.

  In recent months, I have been taking a detailed look at multi-decade water and sanitation spending needs.

• Chart of the Month - What are the barriers to sustainable and equitable water management?

  This month’s chart comes from William Sarni’s book Corporate Water Strategies.

General

• Water Right or Wrong?

  Emma Welsh lauds the benefits of our water rights and trading summits.

• Vietnam set to lay its PPP ghosts to rest

  The Vietnamese government is selecting pilot projects for its new PPP programme. Full-scale implementation is still some way off, as GWI’s Olivia Jensen and Rama Rastogi discover.

• Can Portugal turn water into cash?

  The outgoing head of Águas de Portugal gives his unique viewpoint on the challenges of increasing private sector participation in his country’s water sector

• Portugal’s private sector dreams

  The private sector faces significant hurdles before it can take over AdP’s operational and infrastructure development role.

• Spanish irrigators blast CAP reforms

  A change in the way subsidies are paid under the Common Agricultural Policy could have drastic effects on water infrastructure investment in Spain.

• Suez puts Eurawasser on the block

  Suez Environnement has grown disillusioned with the growth prospects on offer at its German water subsidiary.

• Mann+Hummel outlines global growth strategy

  The German group wants to expand its industrial water business in Europe and the Americas.

• Amplio Filtration to step up acquisitions programme

  A fresh infusion of equity will accelerate the company towards its goal of €100 million in revenues by 2014.

• Thames Tunnel investigates alternative financing

  An upward revision in the project’s capex spend may mean Thames Water is forced to review its funding plans.

• Pennon loses its appeal for Woodford

  The fund manager has liquidated EIT’s position in the water/waste specialist.

• All eyes on Egyptian PPPs as elections loom

  This month’s parliamentary elections will help decide the future of Egypt’s stalled PPP programme. A reduced reliance on local currency financing will make the role of international investors all the more vital.

• Qatar offtaker doubles up desal plans

  Planners in Qatar’s water and power body now look likely to choose two of the major desal expansion options put forward by site owners – instead of one. Contractors are likely to have to wait until next year for a final decision.

• Suez looks to consolidate its Algerian advantage

  A new mandate to reform the management style of the capital city’s water and wastewater utility will build on the technical advances made over the past five years. There is still scope for further collaboration.

• Bluewater’s American odyssey

  A new licensing agreement will see Bluewater Bio’s proprietary technology rolled out across the US. Its new partner stopped short of an equity stake.

• GE finally finds its sweet spot in water

  The industrial giant seems to have found a model which works in the water business at last. The boss of the European business explains to Christopher Gasson how it happened.

• Flotation is pure play for Xylem

  Xylem hit the ground running with a flurry of announcements, including a distribution deal with GE Zenon.

• Thai companies keep their heads above water

  Thailand’s two listed water companies are managing to keep their businesses afloat in the midst of the worst floods for half a century. Plans to diversify into renewables will have to wait.

• Chinese wastewater tariff reforms lack bite

  A fresh round of reforms will see Chinese wastewater tariffs rise by at least 50%. Convincing municipal leaders to implement the new levels is a different matter, as GWI’s China editor Kathy Liu discovers.

• Tuaspring financing leaves Hyflux exposed

  The financing package for the Tuaspring desal and power plant in Singapore has left Hyflux’s balance sheet dangerously exposed. How much further can the shares fall?

• Removing salt from the coal seam gas equation

  Brine disposal is one of the thorniest problems facing Australia’s coal seam gas producers. It remains to be seen whether a new initiative to extract and market CSG salts is commercially viable. Max Borchardt reports.

Brief

• EUROPE WATER IN BRIEF

  *Anglian Water tapped the Class B bond market for $410 million in early November via a 10-year offering paying a coupon of 5.18%.

• MIDDLE EAST WATER IN BRIEF

  * Omar Al Wahaibi, the chief executive of Haya Water, has left the Muscat wastewater controller to join Oman’s Electricity Holding Company.

• AMERICA WATER IN BRIEF

  * Liberation Capital, the private equity fund set up by ex-GE Water boss Jeff Garwood, is looking to raise a second round of capital in December, just four months after completing its first $60 million funding round.

• ASIA WATER IN BRIEF

  * It has been a busy month for Manila Water. The company has bought Veolia out of the 20,000m3/d Clark Water concession in the Philippines, and also submitted an investment proposal to SAWACO, the water utility serving Ho Chi Minh City in Vietnam – along with Mitsubishi and locally listed manufacturing and construction company REE Corporation – for a water loss reduction project in three SAWACO service zones.

Opinion

• Managing the funding gap

  Some life is emerging in the Middle Eastern project market for water and wastewater. How will the battered financial sector provide funding?

• Powering China’s growth engine

  Charles Bodhi examines how the rise of China’s middle class will affect the interplay of the country’s future water needs.

Profile

• A double dip for new contract gains

  David Lloyd Owen reviews the new edition of the Pinsent Masons Water Yearbook and finds difficult financial markets make it an unlucky thirteenth for the private sector.

GWI Water Index

• Index outperforms as Asian stocks rebound

  A strong performance by Asian water stocks this month helped to wipe out last month’s losses. With more and more companies being taken private, investors are being forced to re-allocate resources elsewhere.