Do twelve figures in Paris spell growth for water?
Published February 8th, 2018
It looks to me that we could be seeing more than $100 billion of opportunities presented at this year’s Global Water Summit. It is a big number. I don’t think that it has ever been so big before. It makes me wonder whether we have been too pessimistic about the future of this industry in our forecasting, as it seems there is so much growth ahead of us.
Of course part of the reason why the number is so big is because this year we have made a conscious effort to make it big. We decided not to spend so much money on a high-profile speaker for the Global Water Awards, and instead put our resources into making sure that we have the right people in the room. We are still waiting for a lot of confirmations, so the agenda on the website does not yet reflect my 12-figure prognosis, but I am confident enough of success to name my number.
The size of the figure is also an important reflection of the way the industry is finally starting to move. Governments are thinking big about water, but largely because they are not intending to pay for it all themselves.
Ten years ago, most water infrastructure was financed out of central government borrowings. These days, as ambitions grow, governments are looking to shift more of the responsibility for raising finance down the chain. It is a pattern our research team is currently tracking for its next market report: Financing Water To 2030 (to be published at the end of next month). By way of example, India and Indonesia between them have water-related spending plans of $38 billion, but only half of that amount is being bankrolled by the central government. The rest has to be raised locally, either by the utilities themselves or by their municipal parents. Saudi Arabia, Oman, Argentina, Brazil, Sri Lanka, and Nigeria are likely to rely on the private sector to provide a significant proportion of the $70 billion or so of capital they require for water investment. Across the developed world, the trend is the same: central governments are cutting back on direct funding of water assets, and expecting independent agencies, local bodies and utilities to step up to the plate.
The problem is that as you move the responsibility for financing water closer to the ratepayer, getting the numbers to add up is a much more tricky business. Low tariffs, weak management, and reluctant lenders all stand in the way. Our $100 billion dream could turn into $20 billion of reality.
That is where the Global Water Summit comes in. Twelve years ago when we set up the Global Water Summit, I chose the URL www.watermeetsmoney.com, because I wanted the event to be the place where water and money would meet. It seemed to be the missing piece in the machinery of the global water industry. Over the years I have learned that it is not as simple as that. There are so many other parts that need to be there to make money work well with water. We need more innovation and better technology to bring down costs, we need stronger leadership in the public utility sector, and we need a broader commitment to paying for water. That is why we launched the Global Water Leaders Group and Leading Utilities of the World, and why we introduced the digital and Chief Technology Officer conference strands. It is also why we are hosting a pre-conference round table on delivering bankability to the utility sector, and why we are running a workshop on blended finance with the World Bank this year. Looking at the delegate bookings, we seem to be getting closer to my original vision, but I won’t say that we have arrived until we have $100 billion of money turning up in Paris.