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In March, the UN held a major global conference on water, the first such event for 46 years. It was aimed at addressing growing concern about the outlook for global water security.
According to recent estimates, 26 per cent of the world's population don't have access to safely managed drinking water services. And 46 per cent don't have safely managed sanitation. And these challenges are not set to become any easier.
Demand for fresh water is expected to keep rising at a pace of about 1 per cent each year, even as worsening climate change plays havoc with rainfall patterns and water infrastructure. So what role can private sector investors play?
Incofin, a Belgium-based impact investment firm, offers one example. It recently set up a private equity fund focused on promoting access to safe drinking water in developing countries. The fund raised an initial 36mn euros, from investors including French corporations Danone and BNP Paribas, and Scandinavian development finance institutions Knorr fund and IFU.
It's targeting investments in companies that do things like run kiosks selling safe water to low-income people, or build water pipe networks to reach poor communities. Then there are venture capital funds looking for high tech start-ups with technology that could help tackle water challenges.
These funds include US-based Burnt Island Ventures, which has so far invested $21mn in 18 different companies, with a wide range of business models. One of these has built a system for hotels that can reduce how much water their guests use in the shower.
Another enables water companies to measure metal contamination in real time. Yet another has found an energy efficient evaporation process to turn wastewater into solid salts. There are also funds available to small investors which invest in publicly traded water stocks, but critics say putting money into these funds amounts to a low-risk bet on big utility companies, rather than helping to drive innovation that will address the water crisis facing billions of low-income people.
In any case, water focused funds currently amount to a tiny feature on the fund management landscape. If the financial sector is to play its part in tackling this huge global challenge, that will need to change.