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ACEA, Foreigners Gear Up for Italy Consolidation
On 11 November 2014 the Italian government enacted its ‘Unlock Italy’ set of economic reforms. This decree facilitates the reduction of municipal multi-utility holdings in the water sector to reduce debt. It also builds on the 2012 Development Decree (83/2012) that laid out tendering terms for awarding public water concessions to private operators, which includes longer term tariff visibility and less risk for ownership transfers. As part of 2015 budget negotiations, the government envisions greater regional consolidation to create fewer, more efficient water utilities led by potential national champions such as Acea SpA, Gruppo Hera, Iren Group, and A2A. Italy currently hosts over 100 regional water utilities.
These groups reported strong nine-month 2014 earnings in November, aided by a tariff increase passed last year (resolution 643/2013). For Acea, water delivered an 8% EBITDA increase compared to the nine-month period of the previous year, and Iren Group saw a 33% EBITDA jump over the same period while Hera and A2A results remained flat.
Vietnam Boosts Wastewater Investment
On 30 October 2014, Vietnam’s prime minister approved the construction of 51 wastewater treatment plants in the Dong Nai River basin by 2030. The combined capacity of the plants will reach 2.5 million m3/d by 2020 and 4.2 million m3/d by 2030. Eleven plants will be built in Ho Chi Mihn City, nine in Dong Nai, six in Ba Ria-Vung Tau, five in Long An, Tay Ninh, and Binh Thuan provinces, four in Lam Dong, and one in Binh Duong Province.
The first phase will cost US$4.65 billion for construction of drainage systems and 30 treatment plants– 13 for domestic wastewater and 17 for industrial wastewater– with a combined capacity of 240,000 m3/d. The second phase will require US$3.24 billion between 2020 and 2030.
This government-driven initiative represents a significant ramp-up in spending on wastewater infrastructure in Vietnam. In the past 10 years, annual investment in the sanitation sector was US$150 million, whereas this will represent an average annual investment of US$493 million.
China’s CITIC Bolsters UEL’s Wastewater Position
On 11 November 2014, CITIC Environment Protection Co Ltd and KKR China Water Investment Holdings, through a special purpose vehicle, made a conditional US$1.3 billion offer to acquire the remaining shares of Singapore-based United Envirotech Limited (UEL). KKR previously invested US$113.8 million in convertible bonds of UEL in 2011 and another US$40 million in 2013, increasing its stake to 26%.
UEL provides engineering services using membrane technology to municipal and industrial wastewater treatment projects, and also operates a portfolio of wastewater treatment plants across China. UEL’s customer base includes petrochemical companies China Petrochemical Corporation, China National Petroleum Corp, China National Offshore Oil Corp and Sembcorp Industries in Singapore.
Patient Investors Wanted: Reuse and Desalination in California, Texas, and Mexico
Bluefield Research analyst, Keith Hays, presented Patient Investors Wanted: Reuse and Desalination in California, Texas, and Mexico, on private water investment opportunities in North America during the AEDyR Congreso International in Sevilla, Spain on 26 November 2014.
Serving Water for People and Utility Employment Opportunities
Eric Thornburg, the President and CEO of Connecticut Water Company, joins The Water Values for a special Thanksgiving week episode. Eric relates his experiences from a Water for People trip to Rwanda,...Spanish EPC Firms Scale Municipal Presence Internationally: Competitive Strategies, Global Positioning & Portfolio Management
The expanding international presence of Spanish EPC firms highlights an increasingly competitive EPC and water system integrator landscape in which companies are diversifying their municipal strategies globally.The Past, Present and Future of Clean Water
Ken Kirk, the Executive Director of the National Association of Clean Water agencies, joins The Water Values to discuss the important role that NACWA plays in various areas of the water industry, from...Public-Private Partnerships in the Water Industry
Bob Iacullo, Executive Vice President with United Water, joins The Water Values Podcast to discuss the history of the public-private partnership model (i.e., 3Ps or P3s) in the water sector, how the ...Águas do Brasil Resurgent with New Concessions
Between 19 August and 15 October 2014, private water concessionaire Saneamento Ambiental Águas do Brasil (Águas do Brasil) has had a strong showing with two concession wins in São Paulo, and it has been shortlisted for a new concession in Pará de Minas, Minas Gerais.
Águas do Brasil is the third largest private water operator in Brazil serving over two million people, primarily in Rio de Janeiro. The firm was created as a partnership between four local construction firms in 1997 and rapidly gained market share through large concessions in Rio de Janeiro between 1997 and 2000. Since then, it has grown slowly– adding three contracts in the last five years.
Águas do Brasil provides full utility services in most of its core concessions in Rio de Janeiro state with both water supply and wastewater services. In São Paolo state, the firm’s presence to date has been limited to partial concessions for wastewater treatment.
