The market for water public-private partnership (PPP) projects is set to nearly triple between 2016 and 2020.
New market activity will add an average 6 million m3/day of treatment capacity annually versus approximately 6 million m3/day between 2010-2015, according to a new report.
Bluefield Research said its findings show total investment is expected to surpass US$58 billion, of which 80% will target new seawater desalination and wastewater treatment plants.
Dramatic declines in oil and commodity prices, low water tariffs, groundwater overdrafts, and untreated wastewater discharges are prompting governments to tap the private sector, the company said.
The global adoption of the water PPP 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).
"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."
