On 10 July 2014, Veolia announced the sale of its desalination, waste management, and energy businesses in Israel to Oaktree Capital Management LP. The transaction, estimated at US$340 million, includes its stakes in the Ashkelon desalination plant as well as a hazardous waste incinerator, landfills, municipal waste services, recycling facilities, and various wastewater treatment plants. Other stakes that are part of the transaction include the OPC Rotem natural gas power plant, the Ashkelon power plant O&M contract, and construction of several solar energy installations.
Report Type: Research Note
Brief research summaries of market development or company strategies.
Mexico Fits Hyflux Greenfield Water Strategy
On 25 June 2014, Singapore-based Hyflux Ltd and Mexico’s Banco Interacciones, a subsidiary of Grupo Financiero Interacciones, signed a memorandum of understanding (MoU) to jointly develop water and wastewater projects in Mexico. The exclusive agreement is focused on early stage and greenfield water projects.
Tide Rises for Australia Private Water
On 1 July 2014, Hunter Water Corporation of New South Wales (NSW), Australia, awarded an eight-year, US$193 million operation and maintenance contract to Veolia Water Australia for its 19 wastewater and six water treatment plants.
Marubeni Adds Brazil, Portugal Private Water Stakes to Portfolio
On 25 June 2014, Marubeni Corporation of Japan and Innovation Network Corporation of Japan (INCJ) confirmed their 100% acquisition of Portuguese water network operator Administração e Gestão de Sistemas de Salubridade S.A. (AGS) from Somague, a Portuguese subsidiary of Spanish construction group Sacyr S.A. for an estimated Û70 million. Marubeni and INCJ each will hold 50% of the firm. INCJ is a 95% public, 5% private venture between the Japanese government and 26 large corporations, including Marubeni.
Hitachi Builds Water Presence with Veolia
On 11 June 2014, Hitachi Ltd. announced a memorandum of understanding (MoU) with Veolia Water subsidiary OTV to partner on municipal water treatment and sewage, seawater reverse osmosis (SWRO) desalination, and industrial water projects. The non-exclusive agreement’s geographic focus will be on Africa, MENA, and Southeast Asia.
Abengoa Targets Competitive Wastewater Market
On 14 May 2014, Abengoa released its first quarter earnings report in which engineering and construction activity represented 66% of total quarterly revenue, €1,584 million. It has €779 million of water capex under construction and another €398 million of water capex pending.
American Water Reiterates Growth Strategy
American Water Works Corporation reported relatively stable first quarter earnings on 7 May 2014, with revenue climbing 7.2% to US$681.9 million. It reaffirmed its status as the largest investor-owned water utility in the US, present in 35 states, with the acquisition of three water systems in Indiana and Missouri- along with a pipeline of five other deals in California, Illinois and New York.
California Drought Sparks Innovative Solutions
On 30 April 2014, The California Department of Water Resources (DWR) released a report with analysis of 5,400 groundwater wells across the state signaling historic declines in water levels. Groundwater provides approximately 60% of California’s water supply in a dry year (40% in an average year), and 2013 closed as the driest in recorded history. In many areas of the San Joaquin Valley, recent groundwater levels are more than 100 feet below previous historical lows.
Mexico Earmarks Growth for Private Water
On 28 April 2014 Mexico President announced the National Infrastructure Plan 2014-2018, a sweeping US$594 billion investment roadmap that includes 83 specific water sector projects (US$12.6bn) and an earmark for state water initiatives (US$19.5bn). This represents a doubling of investment compared to the previous plan and signals stronger public support for the sector.
Beijing Water Extends International Reach
On 9 April 2014 Beijing Enterprises Water Group (BEWG) announced the formation of a joint venture to obtain a 25-year concession right to invest, construct, and operate three water supply plants in Medan City, Indonesia. These projects include guaranteed offtake from local water utility Peruasahaan Daerah Air Miunum Tirtanadi Provinsi Sumatera Utar, for 83,000 m3/day of capacity and require US$32 million of investment. Construction will commence the first half of 2014 for completion in 2015.
