Water Scarcity Creating Investment Opportunities

Brian Hicks

Written By Brian Hicks

Posted October 11, 2011

Clean water is becoming scarce and this valuable commodity is a focal point for investors as the global population and need for water increases.

Frog Capital Ltd., a U.K. venture capital firm, is taking advantage of the demand for water.

Bloomberg reports that, “There’s a lot of innovation and effort going into how the water supply is treated and managed,” Iyad Omari, a partner at the London-based Frog Capital Cleantech Fund, said in an interview. “I’ve seen hundreds of small companies that are doing innovative things in this area.”

Frog Capital has invested in two water-purification companies, and still has 60 to 70 percent of its initial $144 million available to invest, said Omari.

Frog invested in Ostara Nutrient Recovery Technologies Inc., a Vancouver based purification company. The company recycles phosphorus and ammonia from sewage into fertilizer and treats the water without a desalination facility, cutting costs.

The Middle East is becoming more involved with water and energy projects. Abu Dhabi is the selected site to host the upcoming Power + Water Middle East Exhibition. 

There are 17 power, water and energy projects with an estimated value of $11.9 billion underway in the Middle East. 

A population increase of 90 percent in a ten-year period across the six states making up the Gulf Corporation Council requires energy production to increase. Electricity production is up to 335.3 billion kilowatts per hour from 176.1 billion in 2000, according to Trade Arabia. Energy consumption is up to 91 percent to 306.5 billion kilowatts from 160.4 billion in 2000.

“The renewable energy sector in particular is seen as an area of immense growth in the region, particularly as global warming and spiraling oil prices have forced world leaders to plan ahead for more sustainable forms of energy production that includes nuclear, solar, wind and biomass,” said Anita Mathews, exhibition director for Power + Water Middle East.

The water sector of the Middle East/North Africa (MENA) region has seen large growth and now has the world’s largest amount of desalination plants. As water demand grows so will the capacity of the plants, resulting in an increase of needed investments.

Our world population increases by about 75 million people every year. Population increases also increase demand for food and clean water.  It’s scary to think, but the Untied Nations reports that by 2030 more than half of the world population will be living in an area with “high water stress.”

Water is used for more than drinking, it is also used for energy purposes. Water is used to cool nuclear reactors, to blast rock in hydraulic fracturing and for hydropower that fuels electricity generation. Greentech Media reports that are world’s available amount of fresh water makes up just one-half percent of all the water in the world.

In September, Solar One and the City Accelerator for a Clean and Renewable Economy (ACRE) hosted a panel discussion as part of New York City’s Climate Week.

The discussion addressed management practices and technologies that work towards ensuring the limited water resources are used effectively while growing energy demands are met.

That’s all for now,


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