Global Water Intelligence Magazine

Mar17 cover for web

Vol 18, Issue 3 (March 2017)

Subscribe to Global Water Intelligence

Global Water Intelligence is a more than just a magazine - it's a monthly repository of critical business information which will help you to shape the future direction of your company.

Subscribers receive a hard copy of the magazine + full access to the Archives, Tariff Survey & Project Tracker Database + additional access for 10 online (and PDF) users per office location.

Annual Subscription: £995 / $1550)

Subscribe Take a free trial

In Global Water Intelligence this month


Need to know


Industrial strength

Suez has catapulted itself into the top three global indus- trial water solutions providers by agreeing to buy GE Water & Process Technologies for $3.4 billion, equivalent to 12.5 times earnings before interest, tax, depreciation and amortisation....

Buying market share in the industrial water space must have seemed a far better bet for Suez CEO Jean-Louis Chaussade than grinding away at organic growth, but the paucity of high-quality assets that are available means that valuations are always going be...

Brazilian auction

The Brazilian government has initiated the biggest sell-off of state water assets since Chile privatised its water sector in the late 1990s. Equity stakes in fifteen state water operators are on the block, with auctions set to take place...

The fickle nature of state regulation in the Brazilian water sector was laid bare at the end of February, when shares in Sanepar – the part- privatised state water company serving the state of Paraná – were knocked for six after the state regulator revealed that...

A new key in the UK

Macquarie has agreed to sell its remaining 26.3% stake in Thames Water to a consortium of Borealis Infrastructure – which manages the infrastructure investment portfolio of...

Both Borealis and Wren House have been looking to enter the regulated UK water sector for some time, and the Thames deal will partly make up for the disappointment that they encountered when their unsolicited approach to...

It will be interesting to see what Macquarie does next in the water sector. Having originally taken a stake in tiddler South East Water, it traded up in 2006 when the chance to buy Thames came along, later selling...

U-turns

The future role of PPPs in Egypt’s water infrastructure development looks uncertain after the country’s government made a U-turn on the massive Abu Rawash wastewater project and decided to fund it directly – more than a year after...

Singaporean desalination supremo Hyflux’s great sell- off continued to evolve this month, with a 70% stake in its landmark Tuaspring IWPP the next to be put on the block. The chances are that the divestment has been on the cards for a while, but the timing of the announcement...

Indonesian authorities are hoping they can capitalise on the momentum behind the financial close of the Umbulan Spring water supply project to revive other water PPPs previously rejected by bidders in 2015...

Meanwhile, observers were surprised to see the authorities in Mongolia pump life back into a wastewater BOT tender which was abandoned both by experienced developers and the project evaluation committee last year...

IPO, therefore I am

Oilfield water management company Select Energy Services filed for an IPO earlier this month, just three months after raising $322 million of equity in the private placement market. The need for growth capital follows a protracted period of reduced activity and pricing pressure which has seen the firm’s annual revenues decline by...

It is unlikely to spark as enthusiastic a response as Chinese engineer and project developer CSD Water Service, which listed on the Shanghai Stock Exchange on 14 March, having raised RMB...

The Kuwait Authority for Partnership Projects has taken on a team led by NBK Capital to advise on an IPO of 50% of the company which owns the 1,500MW & 486,000m3 /d Az-Zour North 1 power and water complex. While floating off stakes in private water projects has proved wildly popular in...

Project Tracker

Project Tracker

Charting the progress of over 900 Desal, Reuse and PPP water projects in the international water industry.

Download a sample

Latest Tracker Updates

Project Tracker Database
(Subscription Requried)
PROJECT COUNTRY UPDATED STATUS TYPE
Marina East Singapore 24 Mar 17 ILF has been t... Desal
Jebel Ali po... United Arab Emirates 24 Mar 17 An RFP is due ... Desal
Argo Tunnel ... United States 24 Mar 17 An RFP was iss... Utility
CASAL conces... Brazil 23 Mar 17 On 23 March 20... Utility
CAESA conces... Brazil 23 Mar 17 On 23 March 20... Utility

What's making the news in global water projects this month

Project tracker

Brazil’s great water sell-off; big desal in Saudi Arabia and India; California sticks to its reuse agenda; South Africa’s drought disaster; Egypt changes tack; Myanmar advances DBO projects; Indonesia’s water PPP revival; CH2M edges ahead in Florida; all the latest project news...

Intelligence


GWI Water Index

America nudges up to new high

Despite the fact that some stocks had a roller-coaster ride this month, the Americas segment of our index hit a new high. Tariff troubles in Brazil took the shine off the numbers.


Water on the markets this month:

MarketValueChangeDate
Global Water150.080.53%Value on 10 Mar
Asia Water112.931.25%Value on 10 Mar
EMEA Water102.32-0.07%Value on 10 Mar
Americas Water214.800.32%Value on 10 Mar

The List

Water company operating profit performance in 2016

2016 was not a great year for growth, but it did offer scope for margin improvement. Not everything is what it seems in our round-up of last year’s full-year results from the major quoted water companies.


 

Christopher gasson The difference a deal makes

Christopher Gasson looks at the broader implications of Suez’s acquisition of GE Water for the water industry.


Chart of the month

Desal versus reuse

This month’s chart comes from our new market report – Desalination and Water Reuse: Scarcity Solutions for Cities and Industry.


Chart of the month

 

 

Water Leaders

Pipe Prosperity
A utility-led innovation to identify the causes of pipe failure has recently been completed in Sydney, Australia. The award-winning project has received international attention and has already paid for itself through operational savings of A$10 million ($8 million). 

 

 

Americas

Making sense of the great Brazilian water sell-off

The revelation that Brazil intends to privatise 18 of its state water operators appears to offer a golden opportunity for international investors to diversify their holdings in a market with considerable growth potential. The reality is more nuanced.

Will Brazil’s water privatisation programme work?

The planned sell-off of Brazil’s state water operators marks the most ambitious water privatisation agenda of any government since Chile in the late 1990s. What are the issues at stake?

Select Energy aims to capitalise on oilfield water recovery with initial public offering

The decision to raise public capital could position Select Energy Services to ride the new wave of optimism sweeping the upstream oil & gas industry in the US. How will the market for oilfield water services shake out amid renewed activity?

US water sector misses the grade

Improving water and wastewater infrastructure which has been graded as “poor” and “at risk” will require much more than a federal stimulus plan.

Reuse and desal projects pick up pace in California, despite easing drought

Although recent winter storms have relieved immediate supply concerns in most parts of the state, water reuse and desalination remain critical to California’s long-term water security. A promising pool of projects are moving into final procurement this year.

Debra coy Kung Fu fighting

In the ancient art of Washington lobbying, water is still finding its footing, writes Debra Coy.


Asia pacific

Rejected, redefined, and ready for retender

The return of the Bandar Lampung and Pekanbaru water PPPs, which previously faltered at the tender stage, underscores the Indonesian government’s commitment to mobilise private finance for infrastructure. What lessons have been learned?

Ulaanbaatar city revives wastewater BOT tender

A Chinese-Mongolian consortium is set to be recommended as the winning developer of Ulaanbaatar’s new wastewater treatment BOT, despite its earlier dismissal over an incomplete bid. Reuse could yet be added to the scope of the contract.

Hyflux to offload 70% of Tuaspring

The Tuaspring IWPP has joined the Tianjin Dagang desalination plant on the block. What does Hyflux have left?

CSD Water Service share price soars after Shanghai IPO

Retail investors have flocked to CSD Water Service’s IPO on the Shanghai Stock Exchange, as the venture capital-backed company carves out a niche in small and medium cities and their industrial parks. Technology development is high on its agenda.

Willy yeo A $3 trillion-dollar Trump card

In the second of a three-part series, GWI’s Willy Yeo looks at just how vulnerable Chinese firms are to the effects of US interest rate hikes.

Europe

Suez sets itself up to lead the industrial water revolution

The French company has struggled to achieve meaningful growth in the industrial water field. Buying GE Water will transform the business, but risks creating channel conflicts.

Holistic thinking set to drive a new wave of water lending for the EBRD

An increasingly sophisticated client base is demanding more intelligent solutions to help build and maintain water infrastructure. How is the bank responding?

Credit uplift potential for water PPPs

A new risk mitigation mechanism pioneered by the EBRD at a Turkish hospital could be applied to other availability-based PPPs, including wastewater treatment plants.

EBRD steps up Kazakh water reform

A brisk year for sub-sovereign deals means the EBRD’s total lending to Kazakhstan’s water sector has topped €80 million. New models for tariff rises and PPPs lie ahead.

Macquarie exits Thames as Affinity Water investors mull possible sale

The Australian investor which led the buyout of Thames Water from RWE in 2006 has negotiated the sale of its remaining 26% stake at a comparatively low premium to the company’s regulated asset value. How will it impact on the sale of Affinity Water?

Market digests UK switch protocol

Thousands of companies in England will switch their retail water supplier ahead of the 1st April deadline. Not all will go down to a single supplier.

UK water sector faces debt squeeze on three fronts as AMP7 considerations bite

A constellation of challenges could threaten regulated UK water companies’ access to the debt markets on which they have come to rely to fund their post-privatisation investment programmes. Where are the biggest pinch points?

Anglian mulls suite of debt options

The company is eyeing a variety of funding mechanisms on the back of a successful Class B bond earlier this month. Inflation-linked debt is not among them.

Spanish public procurement reforms draw flak for their lack of rigour

Proposed amendments to the way public infrastructure is procured in Spain could make it a riskier proposition for lenders, and are likely to do little to deter corruption in the water sector.

David lloyd owen The things we leave behind

David Lloyd Owen on the EU’s cautious new look at the possibilities of wastewater reuse.


Middle East and Africa

New Saudi NWC boss heralds start of utility sea change

New National Water Company CEO Mohammed Mowkley has taken the helm as the body faces a raft of social, financial and structural challenges. With the Mecca region chosen for the first major step towards PPP, a new approach to subsidies could underpin the project.

Tom scotney Solving the subsidy question

Saudi Arabia’s new national water utility boss has been handed one of the world’s biggest water turnaround tasks, argues Tom Scotney.

Abu Rawash award points to decline of water PPPs in Egypt

The decision by the government to fund a massive wastewater treatment project directly is a blow to investors looking to support infrastructure in the country.

Lydec’s profit declines as Casablanca grows

The Moroccan concessionaire, in which Suez holds a majority stake, is anxious to reverse a multi-year decline in profitability. A longdelayed contract revision is only one of the challenges it faces.

SEAALing the future of water provision in Algiers

Suez has succeeded in extending its management contract in the Algerian capital for a second time. Can it make it three in a row?