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The business of water: Private capital is key to solving the water crisis

About the blog

Alexander Loucopoulos
Partner at Sciens Water, a dedicated US Water Infrastructure Fund, that is focused on solving the biggest issues surrounding water.

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  • The business of water: Private capital is key to solving the water crisis

As the world faces an escalating water crisis, it is time to acknowledge how private capital can play a critical role in implementing the necessary solutions. One of the biggest challenges fueling the water crisis is a lack of funding. In the United States, consistent underinvestment has led to a 400-billion-dollar funding gap for water infrastructure, which can only be closed through increased partnership and coordinated investment by the government and the private sector. Capital spending on water infrastructure at the local, state and federal levels falls short of what is needed to modernize our system. Public and private capital must work together to scale financial commitments dedicated to solving this crisis.

The Environmental Protection Agency recently proposed limits on per- and polyfluoroalkyl substances, or PFAS, in drinking water. This is a critical step to protect the quality of potable water, but one key question remains - who will pay for this? The proposal affects thousands of small, medium and large utilities, and based on preliminary estimates, the upgrades needed will cost billions. The government may fund some of this, but the private sector will need to fill the gap. What's more, this plan will likely take years to implement, yet the solutions are already being leveraged across the private sector. Central States Water Resources (CSWR), for example, has been testing for the presence of PFAS since its founding. This is just one example of why it's crucial for private enterprises to be a part of the solution, as private capital allows for swift action to address these issues now, not years down the line.

Additionally, water systems in the U.S. have not kept pace with the changing climate, as drought becomes more commonplace and concerns about water scarcity grow. 34 billion gallons of municipal wastewater are produced every day in the United States, but less than 10% of it is currently reused. Despite the growing need, there is a lack of will to invest in wastewater management facilities. There is also a psychological barrier at play. Water recycling faces resistance in the U.S. because many people do not understand the cleaning and treatment process, which leads to feelings of disgust. Media coverage only helps to fuel this issue, thanks to headlines like “From the Toilet to the Tap.”

The water crisis is too big to tackle at once, which is why investments should focus on localized solutions that bring direct, measurable impacts

But the truth is we have the solutions to turn our wastewater into clean, safe drinking water. Membrane Bioreactors (MBRs), for example, are becoming increasingly popular among developers, engineers and utility districts due to their small footprint and extremely high-quality effluent. Integrated Water Services (IWS) has been installing MMBR systems across the Southwestern United States for over a decade, including in drought-ridden areas along the Colorado River Basin.

The water crisis is too big to tackle at once, which is why investments should focus on localized solutions that bring direct, measurable impacts to the communities affected. IWS played a critical role in helping a residential developer in Texas overcome the challenge of developing properties without sewer access. The development site was miles away from municipal treatment plants, which also lacked the capacity to take on additional waste. Within six weeks, IWS installed an interim system to treat 70,000 gallons per day. Just 11 months later, a permanent plant was online, treating 150,000 gallons per day to accommodate up to 1,000 homes. The community grew quickly, yet IWS was able to maintain wastewater operations and produce high-quality effluent without interruption during the construction of the permanent plant.

There is no easy fix to solve the water crisis. If we continue to do things as they’ve been done in the past, we will not see progress. Until we embrace water’s true value, we will fail to act with the urgency this crisis necessitates. Efforts to date are not enough — ongoing innovation, new ideas and dynamic partnerships are critical as we move toward a water-secure future. My hope is that private capital can work with governments to solve bigger problems. Let’s focus on solutions before it’s too late.

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