Global Water Intelligence Magazine

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Vol 17, Issue 6 (June 2016)

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In Global Water Intelligence this month


Need to know


Public offerings
  • Korea’s Kolon Corporation is selling its remaining 63% stake in wastewater project developer and operator Kolon Water & Energy to its private equity partner Standard Chartered for KRW88.6 billion ($77 million)...
  • Finally this month, the market is beginning to talk about a possible IPO of Evoqua Water Technologies...
The right connections
  • Steve Robertson has become the second ex-CEO of BT Open reach to be appointed to the top job at a major UK water utility...
Super-sized PPPs
  • A team led by Consolidated Water has emerged as the top ranked bidder for the 100MGD (378,500m³/d) Rosarito seawater desalination plant in Mexico. The deal is likely to make CEO Rick McTaggart look like a rock star, but it has not been an easy ride...
  • China’s Ministry of Finance is leading a cohort of 20 ministries in calling for a third round of “demonstration PPPs.” It has also revealed that its mammoth new database of 7,721 projects includes RMB156 billion ($24 billion) of...
  • The Ministry’s list also includes RMB46 billion ($7 billion) of “sponge city” PPP projects, which deploy natural and engineered stormwater drainage and reuse infrastructure, with the twin goals of reducing water-logging and cutting out river pollution...
  • Last month saw the signing of the first private investment project in Indonesia’s water sector since it was thrown into disarray by the annulment of the national water law early last year...

  • The new government in Brazil has lost little time in proclaiming its commitment to involving the private sector in the country’s infrastructure programme. With just 60% of the population connected to the sewerage network, and only 45% of wastewater treated, the “Crescer” (“Growth”) initiative aims to boost private sector investment in infrastructure by...
  • Barbados has awarded two 30,000m³/d desalination plants to IDE and Osmoflo, respectively, under 15-year build-own-operate contracts. Despite having offloaded the capex responsibility for the plants to the private sector, the government is facing a dual dilemma. First, it needs to wean consumers off subsidies without raising rates to the extent that they harm the island’s tourism industry...
Mergermania
  • The number of sizeable corporate water assets being prepped for sale has risen appreciably in the past month, paving the way for a bumper crop of mergers and acquisitions in the second half of 2016. Among the properties said to be on the block are Pentair’s $1.8 billion-a-year valves and controls business, which represents...
  • Also up for sale are Badger Meter and Sensus USA, both of which are hoping to take advantage of investor appetite for metering assets, following the $5.1 billion sale of Elster to Honeywell at the end of last year...
  • Marketing two metering companies at the same time is an interesting proposition, but risks depressing the valuations on both. Badger is already fully valued, which leaves little room for a buyer to offer the sort of premium that would make the deal a no-brainer...
  • The Chinese have already sealed the purchase of Test-America, the former laboratories business that Severn Trent jettisoned in the mid-2000s. Like Sensus, the $240 million-a-year business has been under private equity ownership since 2003, and since then has consolidated its sprawling portfolio of lab testing facilities in order to satisfy its private equity masters...
  • Another cross-border deal struck by a private equity-backed firm looking to go global was Italmatch’s purchase of Compass Chemical. The deal will create a $150 million-a-year...
  • Aquatech International, the Pennsylvania-based advanced water treatment company, is said to have sold 40% of its equity to Ecolab in a deal which involves an option to acquire the remainder of the business at a reportedly rich multiple...
  • XPV Capital is also looking for its first successful exit among the cluster of companies which received funding from its first fund. Therma-Flite, which offers thermal desorption solutions for sludge drying applications, received a $...
GCC restructuring
  • Saudi Arabia this month released details of a National Transformation Program that it hopes will help the country move beyond a reliance on oil incomes and balance the budget by 2020...
  • Meanwhile, Oman has started along its own path toward a major reform process, after a team of advisors began work on a six month project looking at options for restructuring services...

Project Tracker

Project Tracker

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

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Latest Tracker Updates

Project Tracker Database
(Subscription Requried)
PROJECT COUNTRY UPDATED STATUS TYPE
Gandharbpur ... Bangladesh 14 Dec 17 GWI understand... WTP
Jaffna Penin... Sri Lanka 14 Dec 17 Five bids are ... Desal
Weliwita bul... Sri Lanka 14 Dec 17 The client is ... WTP
Far North Al... New Zealand 14 Dec 17 The current wa... Utility
Gilbert O&M ... United States 14 Dec 17 GWI understand... Utility

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

Project tracker

Consolidated comes out on top at Rosarito; Tunisia seeks to embrace water PPPs; Oman’s thirst for desal; Florida’s big RO build-out; specs out for Japanese wastewater concession; Indian industry turns to desal; all the latest project news from around the world this month.

Intelligence


GWI Water Index

US water stocks power ahead as Chinese do the splits

Another record performance from the GWI Americas Index failed to spill over into the rest of the tradeable universe of water stocks. Stock splits were the order of the day in China.


Water on the markets this month:

MarketValueChangeDate
Global Water162.430.93%Value on 10 Nov
Asian Water121.450.52%Value on 10 Nov
EMEA Water101.000.75%Value on 10 Nov
Americas Water240.481.24%Value on 10 Nov

Market Profile

Clean energy moves rewrite palm oil mill treatment rules

Southeast Asia’s growing energy demand and the imposition of stricter environmental standards are sparking a new wave of interest and investments in technologies to treat palm oil mill effluent (POME).

Tech steps up as KL stamps down on waste

Malaysia is pushing out higher treatment standards for the management of palm oil mill effluent, forcing millers to look for new solutions to treat wastewater.

The List

Top global water capex plans

Following the publication of Global Water Market 2017, GWI takes a look at some of the most ambitious water and wastewater treatment spending plans on Earth.


 

Christopher gasson Making a customer cluster

Christopher Gasson argues that water technology hubs are all very well, but the real challenge is aggregating the customer base.


Chart of the month

Chart of the month: The future of MBR

This month’s chart comes from a presentation by Professor Simon Judd of Cranfield University on the future of membrane bioreactors, given at an event to celebrate the 50th anniversary of Berghof, the German technology company responsible for the Biopulse sidestream MBR system.


Chart of the month june 2016

Americas

State support for US water PPPs continues to grow

The consideration of new bills in Massachusetts and Pennsylvania is the latest sign of growing state-level support for water/wastewater public-private partnerships in the US. Will this translate into opportunities on the ground?

Assessing the water imperative of Brazil’s new infrastructure push

Brazil’s new government has already set out its stall on how to use infrastructure creation to boost the national economy. How will the fresh approach translate into opportunities for private water operators?

Brazil’s $60m desal funding boost

Seawater desal could trump reuse as a tool to address the drought in the northeast of the country. Industrial users could be first to the table.

Water testing market goes global as China’s JSTI Group snaps up TestAmerica

The environmental testing business has traditionally been a local trade peddled by local players. A new cross-border deal will seek to exploit the new dynamics that are reshaping the industry.

Rethinking water in the oilfield

A focus on technology is no longer enough – it’s about water management, not water treatment, argues Amanda Brock.

Americas water in brief

On 9th June, the California Public Utilities Commission authorised $25.1 million of additional rate revenue for San Jose Water in 2016 as part of its final decision on the company’s general rate case.

Water sector braces itself for a new wave of M&A

There has been a noticeable uptick in the number of water properties being shopped around for sale. Is it a seller’s market?

New legislation will see Florida face up to its reuse challenge

The state is set to embark on a new era of wastewater reuse, fuelled by existing and future legislation. While local geology is likely to shape the extent of aquifer recharge projects, questions over funding have yet to be addressed.

Is IPR ready to take off in Florida?

Florida is not short of indirect potable reuse pilots, yet costs continue to hold back full-scale implementation.


Asia pacific

Return to water BOTs shaped by political pressure

As Indonesia’s water BOT market starts up again, state-owned companies are in prime position. New water PPP regulation, meanwhile, is restricting private roles in distribution.

Standard Chartered buys Korean sewage O&M leader

Korea’s strongest operating company in the municipal and industrial wastewater segment is being sold to its private equity investor after missing key IPO deadlines.

Chinese stormwater PPPs gather pace as wastewater treatment is bundled in

A year on from the launch of China’s sponge city pilot programme, the government has added 14 new cities to its list bringing its total subsidy pot to $6 billion. The bundling in of wastewater treatment plants and deep tunnel sewers has boosted international interest.

Willy yeo Heading for a new home

Asian private equity managers are looking for bricks-and-mortar water assets to park their money in, writes Willy Yeo.

Asia water in brief

Spain’s Acciona Agua has won its first contract in the Philippines, to build the €90 million 100,000m³/d Putatan 2 UF/RO treatment plant.

Clean energy moves rewrite palm oil mill treatment rules

Southeast Asia’s growing energy demand and the imposition of stricter environmental standards are sparking a new wave of interest and investments in technologies to treat palm oil mill effluent (POME).

Tech steps up as KL stamps down on waste

Malaysia is pushing out higher treatment standards for the management of palm oil mill effluent, forcing millers to look for new solutions to treat wastewater.

Europe

UK water companies take profit falls in their stride

Pressure on the full-year operating results of some of the UK’s largest water companies appears to have done little to dent the sector’s reputation as an investment destination.

UK water borrowers turn to private placement market ahead of Brexit vote

A slew of innovative bond issues designed to fund UK water infrastructure have emerged over the past month. The inaugural deal from the company building the Thames Tideway Tunnel received the most attention.

Italmatch expands its global manufacturing base with Compass acquisition

The Genoa-based chemicals group has bolstered its presence in the water additives market by making its fourth acquisition in as many years. It is part of a multi-faceted response to industry pressures masterminded by founder Sergio Iorio.

Spanish wastewater reuse volumes stall, despite rising consumption

New data show that the volumes of wastewater reused in Spain are barely more than they were ten years ago. What is causing the bottleneck?

David lloyd owen Managing ‘the other 70%’

Corporate water management can point the way to help irrigators avoid future resource conflicts, argues David Lloyd Owen.

Europe water in brief

The turnover of senior staff at UK water companies picked up pace this month, with the most notable change being the appointment of Steve Robertson as the new CEO of Thames Water.


Middle East and Africa

Saudi reform plan lays out the desal sale of the century

The Kingdom’s radical new National Transformation Plan relies on heavy investment from private water investors. On top of a return to private finance for the building of new plants, a flotation of the Saline Water Conversion Corporation now seems imminent.

Oman to restructure water sector as demand for new infrastructure rockets

The sultanate’s water and wastewater bodies are working at a feverish pitch to keep up with the need for new treatment facilities. A new study started in May could rewrite the rules on procurement and the supply of services to the public.

IsDB pulls back on water funding

Despite an increasingly important regional funding role, the Islamic Development Bank is finding that other sectors have taken priority over water and sanitation.

Tom scotney Bourse code: how to sell SWCC?

Investors’ ears will have pricked up at the prospect of a Saudi desal IPO – but the body faces many structural issues, says Tom Scotney.

Middle East water in brief

The African Development Bank (AfDB) has approved a €88.5 million loan to Morocco for the improvement of water quality and the reliability of water provision in fast-growing periurban areas.

Benin redefines its PPP model to boost rural water initiatives

The Republic of Benin wants to roll out 200 piped water schemes based on a concession model it pioneered in 2014. Has it found a credible alternative to affermage contracts?