Investors warm to water as shortages mount
Thursday, 20 March 2008
LONDON, March 19 (Reuters): As liquidity is drained from credit and money markets and pours into oil and gold, another asset class that could offer long-term returns to the discerning investor is water.
Water shortages are on the rise-stemming from soaring demand, growing populations, rising living standards and changing diets. A lack of supply is compounded by pollution and climate change.
Investors are mobilising funds to buy the assets that control water and improve supplies, especially in developing countries such as China where urban populations are booming, further tightening supply.
Commodities investor FourWinds will this year start raising global funds initially of up to 3 billion euros ($4.68 billion) to invest in water, Tara said.
Water shortage is already a serious problem in many regions of the world, as underlined in a December report from Zurich- based Sustainable Asset Management (SAM), which manages about 8.5 billion Swiss francs in assets.
These include southern Spain, the Maghreb, the Middle East, Central Asia, Pakistan, southern India and northern China. In the Americas, the US mid-west, Mexico and the Andes are the worst- hit areas. Eastern Australia is also badly affected.
China is a particularly strong example. It has a fifth of the world's population but just 7 per cent of the water.
Most of the length of the country's five main rivers is unsafe for direct human contact, and the country will have to build 1,000 wastewater treatment plants between 2006 and 2010 to meet national pollution targets, Citigroup analysts say.
Water shortages are on the rise-stemming from soaring demand, growing populations, rising living standards and changing diets. A lack of supply is compounded by pollution and climate change.
Investors are mobilising funds to buy the assets that control water and improve supplies, especially in developing countries such as China where urban populations are booming, further tightening supply.
Commodities investor FourWinds will this year start raising global funds initially of up to 3 billion euros ($4.68 billion) to invest in water, Tara said.
Water shortage is already a serious problem in many regions of the world, as underlined in a December report from Zurich- based Sustainable Asset Management (SAM), which manages about 8.5 billion Swiss francs in assets.
These include southern Spain, the Maghreb, the Middle East, Central Asia, Pakistan, southern India and northern China. In the Americas, the US mid-west, Mexico and the Andes are the worst- hit areas. Eastern Australia is also badly affected.
China is a particularly strong example. It has a fifth of the world's population but just 7 per cent of the water.
Most of the length of the country's five main rivers is unsafe for direct human contact, and the country will have to build 1,000 wastewater treatment plants between 2006 and 2010 to meet national pollution targets, Citigroup analysts say.