Vol 6, Issue 8 (August 2005)

Need to know

• BIG IN BRAZIL

  Bids for the R$4.5 billion (approximately $2 billion) São Francisco River Transfer scheme were received in mid-July.

• CHINESE BANQUET

  Shenzhen Water Bureau has announced that all wastewater treatment facilities in the city of Shenzhen will be opened up to public tendering, a feast for hungry wastewater investors in China’s coastal areas.

• CORPORATE DIRECTION

  Suez announced an €11.2 billion bid for the 49.9% of Electrabel that it does not already own.

• DESAL SOAP OPERAS

  Poseidon Resources may be reducing its activity in Texas (Andy Shea, who was project manager on the Freeport proposal, moved to work part time two months ago), but it is expanding its horizons in California.

• ELSEWHERE IN ASIA

  Private sector involvement in Vietnam may be re-emerging, after long-running discussions with potential investors about the Thu Duc project.

• WALL OF MONEY

  With US retail investors thirsty for water sector exposure (see story p16), Boenning & Scattergood closed its $53 million Global Water Equities Portfolio and $10 million US Water Equities Portfolio investment trusts in July.

Analysis

• Insight - David Lloyd Owen

  Local outcomes bring the water home.

• Thames keeps Pridesa

  RWE didn’t think it wanted to be in desalination anymore until it tried to sell Pridesa.

• Where will the money go?

  US private investors can’t get enough of the water sector. It may change the industry.

General

• Baku attracts investment

  Veolia Water Systems is building a new WwTP; the World Bank is investing in metering.

• Biwater undaunted in Africa

  Despite an unpleasant experience in Tanzania, Biwater still has an appetite for African risk. It has just signed a £57 million deal in Nigeria.

• Coming to terms with Australia’s ‘alliance’ contract process

  The Sydney and Perth desal projects have put Australia on the map. Winning bids there requires a different strategy.

• Developers get ready for busy second half

  At least five IWPPs are on the horizon. This could put pressure on project developers.

• KfW’s quiet effectiveness

  Development finance editor Frédéric Blanc-Brude looks at how Germany’s Kreditanstalt für Wiederaufbau gets things to work in the water sector.

• Layyah contract for Sidem

  The French company has been awarded a contract for an 8MIGD MED unit by SEWA. More orders could follow.

• M&A hopes rise as Ofwat restructures

  The departure of Bill Emery and a move to a commission structure may open the way for UK water sector mergers.

• MEPs continue to stand against liberalisation

  The European Parliament has passed a resolution against private water in the strategy for the Millennium Development Goals. Germany’s communal utilities association wants the EU to go further.

• Mexico’s CNA looks to fill funding gap

  The country needs to invest more than $1 billion a year in its water and wastewater sector. Jesus Campos from the Comission Nacional del Agua wants the private sector to help.

• Ofwat gets tough on leakage targets

  The regulator can impose fines on water companies that do not perform. Thames and United Utilities are in its sights.

• Regulator urged to allow Terra Firma licence

  The government presses the regulator to agree licence terms for the Sutton & East Surrey takeover.

• Reuse to boost US wastewater equipment market

  Frost & Sullivan backs Wall Street’s bullishness about the water sector – up to a point.

• Russian reforms open the way for concessions

  The government has opened up the water sector by switching responsibility for regulation from the regional energy commissions to the municipalities.

• Spaniards achieve Skikda close

  Abengoa, ACS and Sacyr are celebrating the financial close of their first desalination project in Algeria.

• VCs target US water utilities

  Investors are thirsty for water sector exposure. With very few quoted water plays, there is an opportunity for private equity. Have we seen it before?

Companies

• French giants strong at half time

  Veolia and Suez have not disappointed investors in the first six months of 2005.

• RWE/Thames to keep Pridesa

  The Spanish desalination company will stay with Thames after the RWE management committee had a change of heart.

Market insight

• New realities require a new discipline

  GWI’s Water Market Europe report shows that Western Europe is set to invest €320 billion in water and wastewater infrastructure over the next decade. David Lloyd Owen looks at what is driving this expenditure.