I was recently in Rome for the International Water Reuse and Recycling conference organized by the International Desalination Association (IDA). There, I presented remarks on two panels: the first, at the “Pre-conference Public & Private Utilities Summit: Challenges in the Financing of Water Reuse Structures” prior to the main event, and then, during the session on “Water Reuse and Industrial Water Needs: Meeting the Challenges and Opportunities” at the conference.
Challenges and Opportunities to Meet Industrial Customers’ Water Reuse Demand
By Bastien Simeon
This was an enriching and invigorating event, the first live conference I was able to attend, as most of us, in more than two years.
Under the guidance of its current president and board, the IDA has been broadening the conversation to financial, legal and regulatory topics shaping the desalination and water reuse markets, and I have the honor to co-chair a committee on financial institutions.
One of the panels I participated in included an exciting debate on challenges and opportunities to meet reuse demand for industrial customers. There is significant appetite from water companies and financiers to deliver the required output (e.g., treating effluent up to a required standard so it may be reused) on a long-term basis through a concession-like structure, whereby the industrial client completely outsources its need. This allows the client to focus on its core business, benefiting from sector-specific expertise and management abilities, and to transfer a substantial amount of risk. On the other hand, there are barriers to such structures, such as scale, as they are more complex to put in place.
There is ample liquidity available for reuse projects, whether municipal or industrial, as they align well with SDGs and ESG criteria. For instance, sustainable and socially responsible impact investing is an increasingly important theme in the investment strategies of pension and sovereign wealth funds, as they allocate significant portions of their investment portfolios to environmental and social goals. Moreover, they are significant long-term investors whose requirements align well with returns from wastewater treatment and reuse.
Another growing source are green bonds. Green finance refers to any financial instrument or investment issued under contract to a public or private organization, in exchange for the delivery of positive environmental externalities. A set of standardized criteria have been defined to provide assurance of the sustainability credentials, which include the increased industrial water efficiency of newly built or existing assets, and water treatment for reuse and resource recovery.
We will be further developing some of these topics in future issues of amane currents – so watch this space.