Water and Environment

Ecofin's Water and Environment capabilities seek to invest in companies across the globe and throughout the water value chain that we believe are in a position to benefit from the pursuit of solving the water supply/demand imbalance.

Water has attracted an increasing amount of investment and consideration for a number of reasons, namely:

  • Water shortages
  • Water quality concerns
  • Deteriorating water infrastructure in developed countries and need for water infrastructure in emerging markets

We believe the following tactics will improve the supply/demand imbalance:

  • Maximizing water supply through water loss prevention technologies, water reuse and desalination
  • Improving water efficiency through adoption of advanced irrigation methods, growth in process control systems and advances in household water technology
  • Upgrading legacy water infrastructure in developed countries, as well as building out water infrastructure in emerging markets
Commentary Water & Environment 12/23/2020

Investing in water: Making an impact without sacrificing performance

We invest in what we believe are essential assets, those that are critical to the economy, have h...

Capital investment is required to solve the water crisis

<1%

of the world's water is available for consumption.

Source: U.S. Department of the Interior U.S. Geological Survey (December 2016).

$14 Trillion

of capex is needed for water infrastructure and technology globally

McKinsey Global Institute: Infrastructure productivity (January 2013).

34%

of all water produced is lost during transmission and distribution

McKinsey Global Institute: Infrastructure productivity (January 2013).

Investment Process

Qualitative analysis

  • Company strategy and growth prospects
  • Business model and risk assessment
  • In-depth regulatory analysis
  • Management strength
  • ESG factors
  • Energy transition thematic

Quantitative analysis

  • Proprietary modelling of earnings and cash flows
  • Balance sheet strength and credit rating
  • Sensitivity analysis
  • Sustainability and carbon emissions assessment

Relative value analysis

  • Peer analysis
  • DCF, regulated asset base and multiple analysis
  • Total return approach: capital appreciation and dividend
    prospects