The rise of industrial water
Which actor in the system has both the capacity, the incentive and sometimes the obligation to move first, and the dangers of “Privatization” and “Projectification”.
I’m very proud of this piece of writing. It is impressive how we are able to understand our business better and better every day. As more dots connect, our brains are really starting to wire in an MBA style! 😉
For most of my career, the number I (and probably you) carried around was: 70% agriculture, 20% industry, 10% domestic.
That’s the textbook split of how humanity uses freshwater, and it isn’t wrong.
But averages are liars.
I live in the Guadalquivir basin. Here the split is closer to 90% agriculture, 5% domestic, 5% industry.
Agriculture isn’t a slice of the pie, it is the pie.
Then, a few years ago, I learned that Singapore looks nothing like this: almost no agriculture, demand dominated by industry and households (read later the policy innovation about water reuse recently announced…)
Same planet, same molecule, a completely different economy of water.
That’s the moment my brain got rewired.
The “global average” tells you almost nothing about the decisions a given place actually has to make. And once you stop looking at the average and start looking at who uses water, why, and who can pay to fix it, one sector stands out — not because it’s the biggest, but because it’s the one positioned to move.
That sector is industry. Industry is a different animal.
It doesn't use the most water. But it has a balance sheet, a cost of capital, a board that understands risk, and a reason to act now.
Industry is the sector with the money and the motive, and in some cases the obligation as you’ll notice below.
That combination is rare in water, and it changes everything.
It seems there is a high-level elite, who I have no idea who they are exactly, that may have decided water must be an investible commodity.
While these financial interests ensure that capital flows, the shift from standard financing to “projectification” also carries distinct risks for our business, as detailed at the end of this essay.