According to a recent report from global water market insight firm Bluefield Research, European utilities are planning to invest more than $526 billion (USD) in water and wastewater infrastructure between 2016 and 2025.
A combination of drivers including utility market restructuring, water and wastewater directives and improved efficiency have encouraged cities and public water utilities to resume the aggressive investment programs Europe has seen since 2007. Bluefield anticipates annual water infrastructure investment to increase 23 percent, from $46 billion in 2015 to $57 billion by 2025. Bluefield gathered historical input and investment plans from 15 countries and 26 utilities, representing respectively 87 percent of total EU-28 GDP. Forecasts break out into water and wastewater segments, including pipes, plants and pumps.
“Water infrastructure needs steadily increased during Europe’s fragile economic growth,” said Keith Hays, vice president of Bluefield Research. “Now the region is poised for a renewed push in CAPEX growth. After years of delayed projects due to macroeconomic instability, Europe’s water utilities acknowledge investments must be made to secure networks for the future.”
The report comes on the heels of a separate analysis from Bluefield this summer that forecasted the CAPEX for U.S. municipal water and wastewater utilities — including spending on pipes, plants and pumps — to exceed $532 billion between now and 2025.
Europe will focus its CAPEX investment in two key areas: wastewater and pipes — with 61 percent of spending allocated to improving wastewater infrastructure and the remaining 39 percent for water infrastructure. As much as $256 billion (USD) will be dedicated to maintaining and expanding Europe’s 6.7 million kilometers of aging and leaking pipe networks.
Europe’s highly fragmented municipal water market, with more than 61,000 water and wastewater systems serving more than 509 million people, has begun consolidating. Led by France, Italy and the United Kingdom, the number of water and wastewater service providers dropped by 16 percent between 2008 and 2014. Bluefield expects this consolidation trend to continue — bringing much needed economies of scale, more efficiencies and unlocking new funding for network improvements.
While Europe as a whole is investing in infrastructure, market conditions vary across the region. Southern Europe faces water stress from higher consumption levels and lower resources. Eastern Europe is focusing on wastewater while addressing cost-recovery. With more severe rainfall events expected, Northern Europe leads investment for flood resilience of treatment facilities and improved stormwater management.
“Grappling with stagnating population growth and decreasing household water consumption, European utilities are becoming smarter and more resilient,” said Hays. “To get the most out of new technologies and deliver on performance targets, service providers must also commit to major CAPEX investments for underlying infrastructure.”
