WATER: Investments of EUR 500 bn required – every year! DB Research

12 Jun

From DB Research:

“Over the next few years, large-scale investment must be made in the water sector throughout the world. Last year, we put global investment requirements at roughly EUR 400 to 500 bn per annum. In the final analysis, the huge need for investment is a result of the 3% increase per year in the demand for freshwater.”

The report highlights four major reasons for the growth in water-related investments:

  • Industry and energy sector need more water
  • Rising incomes drive up household water consumption
  • Insufficient investment in water sector as a result of too low water prices
  • Governments to rely increasingly on support from private-sector companies in future

Deutsche Bank Research capture the key dilemma in that there is a high investment requirement in all areas of the water sector.

Agriculture is the largest consumer of water and the biggest problems are going to emerge from that sector:

In agriculture, which accounts for roughly 70% of global water consumption, irrigation farming will continue to gain in importance. Worldwide, about 20% of cultivated land is watered by artificial irrigation, and this area produces 40% of total agricultural produce. Increasing demand for food and animal feed resulting from population growth, rising incomes and concomitant changes in nutritional habits (e.g. the eating of more meat), could hardly be met without irrigation farming.

Investment should flow, above all, into more efficient irrigation technologies as in some cases more than 50% of the water is lost in the conventional – and often outdated – procedures. Also, over the longer term some irrigation technologies (e.g. sprinkler irrigation) will lead to salinisation, reducing the soil’s suitability for growing crops.”

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