Rare earths, lithium, and cobalt dominate headlines today for their role in powering semiconductors, AI, and EV batteries. Yet, water — the critical enabler of these same technologies — remains largely overlooked. Chip fabrication consumes millions of gallons of water daily; AI data centres rely on water-intensive cooling; lithium extraction demands significant volumes. Ironically, many regions rich in critical minerals are also poor in water security. Climate-driven shifts in rainfall and rising temperatures, combined with declining water storage and lack of access to clean water, could shrink median GDP in high-income countries by 8% and in lower-income countries by 10–15% by 2050 — threatening supply chains and the resilience of local communities that depend on them.
Water supports over 60% of global GDP, including agriculture, energy, health, manufacturing and technology. Yet, according to the World Economic Forum, the sector receives less than 1% of climate-tech investment. If minerals are the hardware of the future, water is the operating system: powering progress, but chronically underinvested and dangerously close to crashing.
If minerals are the hardware of the future, water is the operating system: powering progress, but chronically underinvested
Private investors pour billions into water-dependent sectors, but only millions into water itself. Why? Water lacks visibility. Despite its ubiquity, or maybe because of it, water remains invisible. It’s not traded on global markets and is often perceived as a stagnant public good rather than a strategic asset. Its infrastructure is fragmented and localised, making it harder to scale global investment narratives. And while climate volatility makes water risk a near certainty, many investors still treat it as a peripheral risk.
This is a strategic blind spot, and as often noted in broader climate resilience discussions, “an unavoidable opportunity”. Water will be one of the first and most acute mediums through which climate disruption is felt, whether it’s scarcity, excess or volatility. Without investment, these disruptions will cascade into economic losses across sectors.
The World Bank estimates a $7 trillion global water infrastructure gap by 2030. As governments and corporates elevate water from niche to strategic priority, policy and regulatory frameworks are maturing to enable greater private participation. This is driving investable models with scalable revenue and measurable outcomes — and positioning private equity to help close the gap through capital, innovation, and speed.
Water infrastructure today goes beyond the pipes and pumps historically associated with the sector. It includes smart technologies like IoT sensors, AI-driven leak detection, and decentralised systems. Private equity is fuelling innovation through Water (and Wastewater)-as-a-Service models, shifting from centralised asset ownership to modular service delivery.
WaterEquity’s Water & Climate Resilience Fund demonstrates how private equity can help address global water challenges. With over $100 million raised, the fund targets water and wastewater infrastructure in emerging markets, where the water investment paradox reveals both the greatest need and the most transformative opportunity for impact.
The Fund’s first investment, a $5 million commitment to SunCulture in Kenya, supports solar-powered water pumps and drip irrigation systems for smallholder farmers. SunCulture improves water access, reduces emissions, and boosts farmer productivity and earnings. Customers report saving about 17 hours per week compared with manually fetching water — resilience in action that is climate-smart, community-driven and commercially viable.
Water is no longer a niche concern; it’s a necessity. That it still receives a fraction of climate investment should be a wake-up call. As climate risks intensify and supply chains strain, the question is no longer whether to invest in water - it’s how fast we can mobilise capital to do so.