According to a newreport from?Bluefield Research, the market for water public-private partnership (P3 or PPP) projects is set to nearly triple between 2016 and 2020, adding an average of 16 million m3/day of treatment capacity annually versus approximately 6 million m3/day between 2010 and 2015. Total investment is expected to surpass U.S. $58 billion, of which 80 percent will target new seawater desalination and wastewater treatment plants.
Many countries are facing a perfect storm of financing constraints andwater infrastructure shortfalls.?Dramatic declines in oil and commodityprices, low water tariffs, groundwater overdrafts and untreatedwastewater discharges are prompting governments to tap the privatesector through public-private partnership schemes.
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The global adoption of the water P3 model will come to the fore in the next five years through a combination of continued growth in markets where the model is well-established (China, Brazil), resurgence in markets that have stalled (Indonesia, Philippines, Mexico, Egypt), and new markets opening up (Persian Gulf countries, Vietnam, Peru, the United States).
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?Particularly in emerging markets, led by China, municipalities are hard pressed to match the financial capacity and operational expertise that the private sector can provide,? said Phuong Pham, Senior Analyst at Bluefield Research. ?National governments aim to de-risk their water sectors for private investment with new PPP laws and more attractive contract tenders, while preserving long-term control over assets.?
An increasingly diverse group of private and semi-private firms are responding to new tender opportunities for P3 contracts.?Bluefield’s analysis of the portfolio strategies of the 50 largest global water players indicates?that the water P3 market is in transition,?with a cast of new players emerging.
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The global P3 market is led by integrated water players Veolia and Suez who have sustained their positions in recent years with over 19 million m3/day of capacity each, followed by semi-private local utilities (SABESP, COPASA), rapidly scaling Chinese players (BEWG, China Everbright), emerging utility concessionaires (Manila Water, AEGEA) and integrated water players (Aqualia).
?Many players turned their backs on PPP opportunities during the recent recession because of their capital intensity, while they deleveraged and reviewed their value chain positions overall,? said Keith Hays, vice president of Bluefield Research. ?This market shakeout has left a field of players with clearer strategies to navigate continued macroeconomic uncertainty and address new opportunities.?
These and other insights are found in Bluefield’s report — Public-Private Partnerships inWater: Company Strategies & Market Opportunities, 2016-2020. This report is based on Bluefield’s analysis of more than 1,800 P3 projects in 44 countries, including top-down regional trends and bottom up company profiles, accompanied by a robust data appendix.
Bluefield Research?provides in-depth, actionable insight to help companies evaluate risk and identify opportunities across global water markets. Executives at utilities, project developers, independent water producers, EPCs, and technology companies rely on Bluefield to define and execute winning strategies. ?
