Water demand could exceed supply by 40% in 2030.
Planned global investment in water infrastructure is estimated at $10 trillion by then, but that still leaves a gap of about $3 trillion for needed improvements in water supply, wastewater, recycling and reuse.
According to IFC’s ‘Creating Markets for Climate Business’ report, public financing is unlikely to be available at a scale to adequately meet these needs. The report says that private sector could provide up to half of the investment required.
A few opportunities: Water equipment and water tech is growing, especially in large emerging markets. The water recycling and reuse market more than doubled, to $23 billion in 2013, and is continuing to grow.
The market for water-smart technologies is expected to grow from about $8 billion in 2016 to more than $20 billion in 2021.
The Global Innovation Lab for Climate Finance is piloting a Water Financing Facility to mobilize investments from pension funds, insurance companies and other institutional investors.
A pilot in Kenya aims to issue bonds for water and sanitation projects. The lab is targeting low-carbon, climate-resilient infrastructure and utilities.
A carbon-neutral water sector could deliver up to 20 percent of the carbon mitigation pledged under existing national plans, according to the International Water Association.