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July 2018

Water as a unique investment opportunity

Tackling water scarcity requires creative solutions and higher investments. This creates good opportunities for investors.

In the vast majority of the world, it is the exception rather than the rule that drinking water starts flowing as soon as the tap is opened. Clean water is a lot rarer than you might think. More than 99% of all the water on our planet is unfit for consumption because it is too contaminated or too salty. 
For the 0.25 per cent or so that is available, the right balance has to be struck between quenching the thirst of the growing world population and the availability of sufficient water for business and agriculture 1. The agricultural sector is responsible for almost 70 percent of global water consumption. In the future, climate change will also have an increasing impact on the supply of water. Floods, heavy rainfall and extreme drought are more likely to threaten the local water supply. There are therefore good opportunities for companies to help solve the impending water shortage.
In many countries, the government is at the forefront of tackling water scarcity. A good example is China's action. The Chinese government launched the Water Ten Plan in 2015 2. One of the effects is that now more than 90% of industrial waste water is treated properly. In the meantime, government attention is shifting to better processing of household residual water 3. In other countries, governments are also taking measures to maintain and improve the quality and quantity of water supplies. 

Water is not only an essential ingredient for human life, but also a unique investment opportunity.

Cédric Lecamp, Senior Investment Manager
These initiatives are creating more and more investment opportunities,' says Cédric Lecamp, Senior Investment Manager. Many governments are struggling with high levels of debt and are looking for opportunities to outsource infrastructure investments as much as possible. Consultancy firm Envisager predicts that the number of households served by a private water company instead of a public company will increase by 45 per cent in the next decade. In addition, there are attractive opportunities for companies developing instruments to measure water quality and for technologies to recycle waste water 4. Water is not only an essential ingredient for human life, but also a unique investment opportunity.

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