Vol 13, Issue 1 (January 2012)

Need to know

• PERFORMANCE

  Year-end figures for GWI’s Global Water Index show a 5% fall in the value of water stocks during 2011

• COMING TO AMERICA

  The reputation of investor-owned utilities among US investors has not gone unnoticed in the UK.

• NON-IPOS

  Middle East contractor and developer Metito has said it is now unlikely to pursue an IPO in 2012, citing market instability.

• CHINESE CHANGE

  China’s State Council announced plans last month to spend RMB3.4 trillion ($536 billion) on environmental protection before the end of 2015, of which RMB380 billion ($60 billion) will go on urban wastewater systems, including reuse.

• ARAB SPRING

  Kuwait has opened tendering for the Umm Al-Hayman wastewater treatment plant, the 500,000m3/d project that will be the second in the water/wastewater sector to be procured by the country’s nascent privatisation board

• IN THE PIPELINE

  German energy utility RWE has sold its 50% stake in a long-running municipal wastewater project in Wedemark, Lower Saxony to Remondis.

• NEW FACE

  Black & Veatch’s water division has appointed Cindy Wallis-Lage to replace Dan McCarthy as president of its global water business.

• TARIFF SURVEY

  GWI’s 2011 water tariff survey is now available as a download for subscribers.

Analysis

• Defying the limits of growth

  Christopher Gasson looks at why water technology matters so much now.

• David Lloyd Owen - The cerebral side of water: smart water looks like this year’s hot theme.

  It struck me that 2011 was the year that wastewater reuse went mainstream.

• Chart of the Month - Recent merger and acquisition activity in the water sector

  This month’s chart is drawn from GWI’s transactions database.

General

• Desalination in technicolour

  Emma Welsh hopes GWI can brighten your desalination day.

• Capital outflows hit specialist water funds

  In theory, water stocks outperformed the market in 2011. In practice, the main specialist water funds struggled to match the GWI Water Index, and investors continued to move away from the sector. What is the outlook for 2012?

• American leaves utility peers in the dust

  American Water was the runaway winner amongst the quoted US water utilities in 2011. What are the prospects for 2012?

• US equipment index fails to advance in 2011

  The uninspiring performance of GWI’s equipment supply index last year came in stark contrast to a 16% rise in 2010. How soon before suppliers recover their mojo?

• Brazilian water stocks end 2011 on a high

  The valuation premia attached to quoted Brazilian water companies in 2011 ensured a healthy outperformance across the board. The sector beat the iBovespa index by more than 40%.

• Investors pour cold water on Asian stocks

  Asia’s listed water stocks failed to benefit from investor interest in emerging markets last year. The GWI Asia Index ended the year down 23%.

• Aussie desalter gets ready to call on new resources

  The worst performing stock in the GWI Water Index last year has already regained ground in 2012. It is eyeing a Nasdaq listing later in the year.

• Water investors play the Continental divide

  The relative safe haven of the UK listed water utilities was the only saving grace for investors with exposure to European water stocks last year. Have prices bottomed out?

• Bluewater Bio enters a new phase of growth

  The wastewater technology provider has turned profitable for the first time. It is weighing up a number of financing options to fund its aggressive roll-up strategy.

• Remondis Aqua bolsters German reference base

  The company has followed up the acquisition of Eurawasser with two more contract announcements. It should not imply that the group has turned its back on the international market.

• Paques picks a new long-term investor

  German billionairess Susanne Klatten has taken a 20% interest in the Dutch value-from-waste specialist. It is the kind of investment which is easier to get into than to get out of, but the long-term prospects look good.

• Spain turns back the clock

  The appointment of an agricultural champion as Spain’s new environment minister could herald something of a volte-face for Spanish water policy, writes Richard Weyndling.

• UK water companies turn to US for funding

  The latest trend among UK water companies has been to access the US private placement market for their wholesale funding needs. It is more attractive for some than for others.

• Liberating capital where it’s needed most

  A group of ex-GE Water executives have carved out a niche providing capital for small value-from-waste projects. How long before other funds catch on to the idea?

• Metito IPO delayed over investor fears

  The company says it is not likely to turn to the capital markets this year to support global expansion, citing a lack of appetite from global investors. Its core business still offers plenty of potential for growth.

• Kuwait opens wastewater BOT tendering

  Developers and financiers are ready for the state’s latest privately financed project, the sewage treatment plant at Umm Al-Hayman in the south of the country. Legal issues are likely to be the major hurdle for procurement.

• Haya Water names new CEO

  The new man in charge of Oman’s largest wastewater body inherits a strong record of procurement. Privatisation remains an ongoing challenge.

• Algeria perseveres with outsourcing model

  Despite mixed experiences, Algeria has not ruled out extending its water management model to other cities. Water resources minister Abdelmallek Sellal spoke exclusively to Emilie Filou.

• Vishvaraj set to profit from Indian PPPs

  On the back of its Orange City project, Vishvaraj Infrastructure is seeking rapid growth in India’s water PPP market. The opportunities are manifold.

• Indian capital city plays catch-up

  Delhi is making up for lost time as it prepares to tender a clutch of water supply PPPs.

• Five years to clean up China’s wastewater

  The Chinese plan to spend $60 billion on urban wastewater infrastructure over the next five years. The move will maximise the potential of under-utilitised assets.

• China takes aim at missed targets

  Chinese policy-makers are considering new ways to implement drinking water standards.

• Advancing Australia’s global water ambitions

  The race is on to promote Australian companies’ water interests abroad. Securing government funding is only part of the story, as Max Borchardt discovers.

• Osmoflo breaks into Chilean desal O&M market

  The Aussie desalter has secured its first contract in Latin America. It will have to fight to build market share.

Brief

• EUROPE WATER IN BRIEF

  The Greek government expects to name legal and technical advisory teams for the privatisation of water companies EYATH and EYDAP later this month.

• MIDDLE EAST WATER IN BRIEF

  Abu Dhabi Sewerage Services Company has named preferred bidders for two sevenyear O&M contracts covering wastewater collection, treatment and distribution in the emirate.

• ASIA WATER IN BRIEF

  India’s infrastructure debt fund is to be launched by the end of February.

Opinion

• Powering ahead with WWTPs

  Government wastewater bodies in the Middle East are increasingly seeing the appeal of sewage-to-energy. What are the implications for contractors?

• Re-inventing Asia’s water future

  Charles Bodhi examines the entrenched challenges to innovation in Asia.

Market Profile

• Let’s drink to the salt of the earth

  High energy prices are driving booming demand for dirty fossil fuels, and cleaning up the waste streams has become big business. Evaporation and high-recovery reverse osmosis technologies have an even greater future.