Water investment flows up by 36%
Posted on 11 August 2005
The World Bank reports that private investment increased by 36 per cent in 2004 bringing investment in water and sewerage projects to nearly $2 billion last year.
New private activity in water during 2004 occurred in three developing regions: East Asia and Pacific, Europe and Central Asia, and Latin America. South Asia and Sub-Saharan Africa had no new activity, while the Middle East and North Africa had just one project, involving both a power plant and a water treatment plant.In East Asia 11 water projects reached financial closure, attracting investment commitments of US$470 million. Most involve water treatment plants in China, part of efforts by provincial governments to improve water quality. The two exceptions: a water utility concession in Tangu, China, and a management contract for the water distribution system in Sybus, Malaysia. Europe and Central Asia had 4 new water projects with private participation in 2004 - management contracts for water utilities in Armenia, the Czech Republic, and Hungary.
Latin America had 13 new projects, attracting investment commitments of US$1.4 billion, the region's highest activity since 2001. Most of this activity took place in just two countries: Chile, where six small and medium-size utility concessions reached financial closure, and Mexico, where four water treatment plants did. Three other countries also had new private activity in water: Brazil (the sale of a stake in Companhia de Saneamento Básico do Estado de São Paulo), Colombia (the concession of a small water utility), and Ecuador (a small greenfield water treatment plant).
The increased investment is good, but investment needs to be tripled in order to meet the estimated US$6.7 billion of investment a year required to meet the Millennium Development Goals in water and sanitation. Ideological NGOs like War on Want and the World Development Movement are not helping to improve water access and quality by campaigning against private sector investment.