by Jo-Shing Yang
December 21, 2012
Summarized Spanish version
Profiting from Your
as Global Elite Rush
to Control Water Worldwide
A disturbing trend in the water sector is accelerating worldwide.
The new "water barons" - the Wall Street
banks and elitist multibillionaires - are buying up water all over
the world at unprecedented pace.
Familiar mega-banks and investing
powerhouses such as,
JP Morgan Chase
...among others, are
consolidating their control over water.
Wealthy tycoons such as,
former President George H.W. Bush and his family
Hong Kong's Li Ka-shing
Philippines' Manuel V. Pangilinan and other
...and others are also buying thousands of acres
of land with aquifers, lakes, water rights, water utilities, and
shares in water engineering and technology companies all over the
The second disturbing trend is that while the new water barons are
buying up water all over the world, governments are moving fast to
limit citizens' ability to become water self-sufficient (as
evidenced by the well-publicized Gary Harrington's case in Oregon,
in which the state criminalized the collection of rainwater in three
ponds located on his private land, by convicting him on nine counts
and sentencing him for 30 days in jail).
Let's put this
criminalization in perspective:
Billionaire T. Boone Pickens owned more water rights than any other
individuals in America, with rights over enough of the Ogallala
Aquifer to drain approximately 200,000 acre-feet (or 65 billion
gallons of water) a year. But ordinary citizen Gary Harrington
cannot collect rainwater runoff on 170 acres of his private land.
It's a strange
New World Order in which multibillionaires and
elitist banks can own aquifers and lakes, but ordinary citizens
cannot even collect rainwater and snow runoff in their own backyards
and private lands.
"Water is the oil of the 21st century."
Andrew Liveris, CEO of DOW Chemical Company
(quoted in The Economist
magazine, August 21, 2008)
In 2008, I wrote an article, "Why Big Banks May Be Buying up Your
Public Water System," in which I detailed how both mainstream and
alternative media coverage on water has tended to focus on
individual corporations and super-investors seeking to control water
by buying up water rights and water utilities.
But paradoxically the
hidden story is a far more complicated one. I argued that the real
story of the global water sector is a convoluted one involving
"interlocking globalized capital":
Wall Street and global investment
firms, banks, and other elite private-equity firms - often
transcending national boundaries to partner with each other, with
banks and hedge funds, with technology corporations and insurance
giants, with regional public-sector pension funds, and with
sovereign wealth funds - are moving rapidly into the water sector to
buy up not only water rights and water-treatment technologies, but
also to privatize public water utilities and infrastructure.
Now, in 2012, we are seeing this trend of global consolidation of
water by elite banks and tycoons accelerating.
In a JP Morgan equity
research document, it states clearly that,
"Wall Street appears well
aware of the investment opportunities in water supply
infrastructure, wastewater treatment, and demand management
Indeed, Wall Street is preparing to cash in on the
global water grab in the coming decades. For example, Goldman Sachs
has amassed more than $10 billion since 2006 for infrastructure
investments, which include water.
A 2008 New York Times article mentioned
Goldman Sachs, Morgan Stanley, Credit Suisse, Kohlberg Kravis
the Carlyle Group, to have,
"amassed an estimated an estimated
$250 billion war chest - must of it raised in the last two years
- to finance a tidal wave of infrastructure projects in the
United States and overseas."
By "water," I mean that it includes,
water rights (i.e., the right to tap groundwater, aquifers, and
land with bodies of water on it or under it (i.e., lakes,
ponds, and natural springs on the surface, or groundwater
desalination projects, water-purification and treatment
technologies (e.g., desalination, treatment chemicals and
irrigation and well-drilling technologies, water and
sanitation services and utilities, water infrastructure maintenance
and construction (from pipes and distribution to all scales of
treatment plants for residential, commercial, industrial, and
water engineering services (e.g., those involved in
the design and construction of water-related facilities)
retail water sector (such as
those involved in the production, operation, and sales of
bottled water, water vending machines, bottled water
subscription and delivery services, water trucks, and water
Update of My 2008 Article -
Mega-Banks See Water as a Critical Commodity
Since 2008, many giant banks and super-investors are capturing more
market share in the water sector and identifying water as a critical
commodity, much hotter than petroleum.
Water Is Still the Next Petroleum
In 2008, Goldman Sachs called water "the petroleum for the next
century" and those investors who know how to play the infrastructure
boom will reap huge rewards, during its annual "Top Five Risks"
Water is a U.S.$425 billion industry, and a calamitous
water shortage could be a more serious threat to humanity in the
21st century than food and energy shortages, according to Goldman
Sachs's conference panel.
Goldman Sachs has convened numerous
conferences and also published lengthy, insightful analyses of water
and other critical sectors (food, energy).
Goldman Sachs is
positioning itself to gobble up water utilities, water engineering
companies, and water resources worldwide.
Since 2006, Goldman Sachs
has become one of the largest infrastructure investment fund
managers and has amassed a $10 billion capital for infrastructure,
In March 2012, Goldman Sachs was eyeing Veolia's UK water utility
business, estimated at £1.2 billion, and in July it successfully
bought Veolia Water, which serves 3.5 million people in southeastern
Previously, in September 2003, Goldman Sachs partnered with one of
the world's largest private-equity firm Blackstone Group and Apollo
Management to acquire Ondeo Nalco (a leading company in providing
water-treatment and process chemicals and services, with more than
10,000 employees and operations in 130 countries) from French water
corporation Suez S.A. for U.S.$4.2 billion.
In October 2007, Goldman Sachs teamed up with Deutsche Bank and
several partners to bid, unsuccessfully, for U.K.'s Southern Water.
In November 2007, Goldman Sachs was also unsuccessful in bidding for
U.K. water utility Kelda. But Goldman Sachs is still looking to buy
other water utilities.
In January 2008, Goldman Sachs led a team of funds (including
Liberty Harbor Master Fund and the Pinnacle Fund) to buy U.S.$50
million of convertible notes in China Water and Drinks Inc., which
supplies purified water to name-brand vendors like Coca-Cola and
Taiwan's top beverage company Uni-President. China Water and Drinks
is also a leading producer and distributor of bottled water in China
and also makes private-labeled bottled water (e.g., for Sands
Since China has one of the worse water problems in
Asia and a large emerging middle class, its
bottled-water sector is
the fastest-growing in the world and it's seeing enormous profits.
Additionally, China's acute water shortages and serious pollution
"buoy demand for clean water for years to come, with China's
$14.2 billion water industry a long-term investment destination".
(Reuters, January 28, 2008)
The City of Reno, Nevada, was approached by Goldman Sachs for,
long-term asset leasing that could potentially generate significant
cash for the three TMWA [Truckee Meadows Water Authority] entities.
The program would allow TMWA to lease its assets for 50 years and
receive an up-front cash payment".
(Reno News & Review, August 28,
Essentially, Goldman Sachs wants to privatize Reno's water
utility for 50 years. Given Reno's revenue shortfall, this proposal
was financially attractive.
But the water board eventually rejected
the proposal due to strong public opposition and outcry.
The Water Market Will Soon Eclipse Oil, Agriculture, and
Citigroup's top economist Willem Buitler said in 2011 that the water
market will soon be hotter the oil market (for example, see this and
"Water as an asset class will, in my view, become eventually the
single most important physical-commodity based asset class, dwarfing
oil, copper, agricultural commodities and precious metals."
In its recent 2012 Water Investment Conference, Citigroup has
identified top 10 trends in the water sector, as follows:
Water reuse technologies
Produced water / water utilities
Membranes for filtration
Ultraviolet (UV) disinfection
Ballast-water treatment technologies
Forward osmosis used in desalination
Water-efficiency technologies and products
Point-of-use treatment systems
Chinese competitors in water
Specifically, a lucrative opportunity in water is in hydraulic
fracturing (or fracking), as it generates massive demand for water
and water services.
Each oil well developed requires 3 to 5 million
gallons of water, and 80% of this water cannot be reused because
it's three to 10 times saltier than seawater. Citigroup recommends
water-rights owners sell water to fracking companies instead of to
farmers because water for fracking can be sold for as much as $3,000
per acre-foot instead of only $50 per acre/foot to farmers.
The ballast-water treatment sector, currently at $1.35 billion
annually, is estimated to reach $30 to $50 billion soon. The
water-filtration market is expected to outgrow the water-equipment
market: Dow estimates it to be a $5 billion market annually instead
of only $1 billion now.
Citigroup is aggressively raising funds for its war chest to
participate in the coming tidal wave of infrastructure
privatization: in 2007 it established a new unit called Citi
Infrastructure Investors through its Citi Alternative Investments
According to Reuters, Citigroup,
"assembled some of the biggest
names in the infrastructure business at the same time it is building
a $3 billion fund, including $500 million of its own capital.
fund, according to a person familiar with the situation, will have
only a handful of outside investors and will be focused on assets in
(May 16, 2007)
Citigroup initially sought only
U.S.$3 billion for its first infrastructure fund but was seeking
U.S.$5 billion in April 2008 (Bloomberg, April 7, 2008).
Citigroup partnered with HSBC Bank, Prudential, and other minor
partners to acquire U.K.'s water utility Kelda (Yorkshire Water) in
November 2007. This week, Citigroup signed a 99-year lease with the
City of Chicago for Chicago's Midway Airport (it partnered with John
Hancock Life Insurance Company and a Canadian private airport
Insiders said that Citigroup is among those bidding for
the state-owned company Letiste Praha which operates the Prague
Airport in the Czech Republic (Bloomberg, February 7, 2008).
As the five U.K. water utility deals illustrate, typically no one
single investment bank or private-equity fund owns the entire
infrastructure project - they partner with many others.
Citigroup is now entering India's massive infrastructure market by
partnering the Blackstone Group and two Indian private finance
companies; they have launched a U.S.$5 billion fund in February
2007, with three entities (Citi, Blackstone, and IDFC) jointly
investing U.S.$250 million.
India requires about U.S.$320 billion in
infrastructure investments in the next five years (The Financial
Express, February 16, 2007).
Water Scarcity Is the Defining Crisis of the 21st Century
In 2006, UBS Investment Research, a division of Switzerland-based
UBS AG, Europe's largest bank by assets, entitled its 40-page
research report, "Q-Series®:Water" - "Water scarcity: The defining
crisis of the 21st century?" (October 10, 2006)
In 2007, UBS, along
with JP Morgan and Australia's Challenger Fund, bought UK's Southern
Water for £4.2biillion.
Water Is the "Paramount Megatrend of Our Time"
Credit Suisse published its report about Credit Suisse Water Index
(January 21, 2008) urged investors that,
"One way to take advantage
of this trend is to invest in companies geared to water generation,
preservation, infrastructure treatment and desalination. The Index
enables investors to participate in the performance of the most
The trend in question, according to Credit
Suisse, is the,
"depletion of freshwater reserves" attributable to
"pollution, disappearance of glaciers (the main source of freshwater
reserves), and population growth, water is likely to become a scarce
Credit Suisse recognizes water to be the "paramount megatrend of our
time" because of a water-supply crisis might cause "severe societal
risk" in the next 10 years and that two-thirds of the world's
population are likely to live under water-stressed conditions by
To address water shortages, it has identified desalination and
wastewater treatment as the two most important technologies.
sectors for good investments include the following:
Membranes for desalination and wastewater treatment
Water infrastructure - corrosion resistance, pipes, valves, and
Chemicals for water treatment
It also created the Credit Suisse Water Index which has the equally
weighed index of 30 stocks out of 128 global water stocks.
investors, it offered "Credit Suisse PL100 World Water Trust (PL100
World Water)," launched in June 2007, with $112.9 million.
Credit Suisse partnered with General Electric (GE Infrastructure) in
May 2006 to establish a U.S.$1 billion joint venture to profit from
privatization and investments in global infrastructure assets. Each
partner will commit U.S.$500 million to target electricity
generation and transmission, gas storage and pipelines, water
facilities, airports, air traffic control, ports, railroads, and
toll roads worldwide.
This joint venture has estimated that the
developed market's infrastructure opportunities are at U.S.$500
billion, and emerging world's infrastructure market is U.S.$1
trillion in the next five years (Credit Suisse's press release, May
In October 2007, Credit Suisse partnered with Cleantech Group (a
Michigan-based market-research, consulting, media, and
executive-search firm that operates cleantech forums) and Consensus
Business Group (a London-based equity firm owned by U.K. billionaire
Vincent Tchenguiz) to invest in clean technologies worldwide.
technologies will also clean water technologies.
During its Asian Investment Conference, it said that,
"Water is a
focus for those in the know about global strategic commodities. As
with oil, the supply is finite but demand is growing by leaps and
unlike oil there is no alternative."
(Credit Suisse, February 4,
Credit Suisse sees the global water market with U.S.$190
billion in revenue in 2005 and was expected to grow to U.S.$342
billion by 2010.
It sees most significant growth opportunities in
Build Infrastructure War Chests to Buy Water,
Utilities, and Public Infrastructure Worldwide
One of the world's largest banks, JPMorgan Chase has aggressively
pursued water and infrastructure worldwide.
In October 2007, it beat
out rivals Morgan Stanley and Goldman Sachs to buy U.K.'s water
utility Southern Water with partners Swiss-based UBS and Australia's
Challenger Infrastructure Fund.
This banking empire is controlled by
the Rockefeller family; the family patriarch
David Rockefeller is a
member of the elite and secretive
Foreign Relations, and
JPMorgan sees infrastructure finance as a global phenomenon, and it
is joined by its global peers in investment and banking institution
in their rush to cash in on water and infrastructure. JPMorgan's own
analysts estimate that the emerging markets' infrastructure is
approximately U.S.$21.7 trillion over the next decade.
JPMorgan created a U.S.$2 billion infrastructure fund to go after
India's infrastructure projects in October 2007. The targeted
projects are transportation (roads, bridges, railroads) and
utilities (gas, electricity, water).
India's finance minister has
been estimated that India requires about U.S.$500 billion in
infrastructure investments by 2012.
In this regard, JPMorgan is
joined by Citigroup, the Blackstone Group, 3i Group (Europe's
second-largest private-equity firm), and ICICI Bank (India's
second-largest bank) (International Herald Tribune, October 31,
Its JPMorgan Asset Management has also established an Asian
Infrastructure & Related Resources Opportunity Fund which held a
first close on U.S.$500 million (€333 million) and will focus on
China, India, and other Southern Asian countries, with the first two
investments in China and India (Private Equity Online, August 11,
2008). The fund's target is U.S.$1.5 billion.
JPMorgan's Global Equity Research division also published a 60-page
report called "Watch water: A guide to evaluating corporate risks in
a thirsty world" (April 1, 2008).
In 2010, J.P. Morgan Asset Management and Water Asset Management led
a $275 million buyout bid for SouthWest Water.
Water Is Underpriced and Undervalued
Founded in 1890, Germany's Allianz Group is one of the leading
global services providers in insurance, banking, and asset
management in about 70 countries.
In April 2008, Allianz SE launched
the Allianz RCM Global Water Fund which invests in equity securities
of water-related companies worldwide, emphasizing long-term capital
Alliance launched its Global EcoTrends Fund in
February 2007 (Business Wire, February 7, 2007).
Allianz SE's Dresdner Bank AG told its investors that,
in water offer opportunities: Rising oil prices obscure our view of
an even more serious scarcity: water.
The global water economy is
faced with a multi-billion dollar need for capital expenditure and
modernization. Dresdner Bank sees this as offering attractive
opportunities for returns for investors with a long-term investment
(Frankfurt, August 14, 2008)
Like Goldman Sachs, Allianz has the philosophy that water is
underpriced. A co-manager of the Water Fund in Frankfurt, said,
key issue of water is that the true value of water is not
recognized… Water tends to be undervalued around the world… Perhaps that is one of the reasons why there are so many places
with a lack of supply due to a lack of investment. With that in
mind, it makes sense to invest in companies that are engaged in
improving water quality and infrastructure."
Allianz sees two key
investment drivers in water: (1) upgrading the aging infrastructure
in the developed world; and (2) new urbanization and
industrialization in developing countries such as China and India.
Water Index Funds and Exchange-Traded Funds
Barclays PLC is a U.K.-based major global financial services
provider operating in all over the world with roots in London since
1690; it operates through its subsidiary Barclays Bank PLC and its
investment bank called Barclays Capital.
Barclays Bank's unit Barclays Global Investors manages an
exchange-traded fund (ETF) called iShares S&P Global Water, which is
listed on the London Stock Exchanges and can be purchased like any
ordinary share through a broker.
Touting the iShares S&P Global
Water as offering "a broad based exposure to shares of the world's
largest water companies, including water utilities and water
equipment stocks" of water companies around the world, this fund as
of March 31, 2007 was valued at U.S.$33.8 million.
Barclays also have a climate index fund: launched on January 16,
2008, SAM Indexes GmbH licensed its Dow Jones Sustainability Index
to Barclays Capital for investors in Germany and Switzerland. Many
other banks also have a climate index or sustainability index.
In October 2007, Barclays Capital also partnered with Protected
Distribution Limited (PDL) to launch a new water investment fund
(with expected annual returns of 9% to 11%) called Protected Water
Fund. This new fund, listed in the Isle of Man, requires a minimum
of £10,000 and is structured as a 10-year investment with Barclays
Bank providing 100% of capital protection until maturity on October
The Protected Water Fund will be invested in some of the
world's largest water companies; its investment decisions will be
made based on an index created by Barclays Capital, the Barclays
World Water Strategy, which charts the performance of some of the
world's largest water-related stocks (Investment Week and Reuters,
October 11, 2007; Business Week, October 15, 2007).
Deutsche Bank's €2 Billion Investment in European Infrastructure
"Megatrend" in Water, Climate, Infrastructure, and Agribusiness
Deutsche Bank is one of the major players in the water sector
worldwide. Its Deutsche Bank Advisors have identified water as a
part of the climate investment strategies.
In its presentation,
"Global Warming: Implications for Investors," they have identified
the four following major areas for water investment:
In addition to water, the other two new resources identified were,
agribusiness (e.g., pesticides, genetically modified seeds, mineral
fertilizers, agricultural machinery)
renewable energies (e.g., solar,
wind, hydrothermal, biomass, hydroelectricity)
The Deutsche Bank has established an investment fund of up to €2
billion in European infrastructure assets using its Structured
Capital Markets Group (SCM), part of the bank's Global Markets
The bank already has several "highly attractive
infrastructure assets," including East Surrey Holdings, the owner of
U.K.'s water utility Sutton & East Surrey Water (Deutsche Bank press
release, September 22, 2006).
Moreover, Deutsche Bank has channeled €6 billion (U.S.$8.55 billion)
into climate change funds, which will target companies with products
that cut greenhouse gases or help people adapt to a warmer world, in
sectors from agriculture to power and construction (Reuters, October
In addition to SCM, Deutsche Bank also has the RREEF Infrastructure,
part of RREEF Alternative Investments, headquartered in New York
with main hubs in Sydney, Singapore, and London.
Infrastructure has more than €6.7 billion in assets under
management. One of its main targets is utilities, including
electricity networks, water-treatment or distribution operations,
and natural-gas networks.
In October 2007, RREEF partnered with
Goldman Sachs, GE, Prudential, and Babcok & Brown Ltd. to bid
unsuccessfully for U.K.'s water utility Southern Water.
Crediting the boom in European infrastructure investment, the RREEF fund by August 2007 had raised €2 billion (U.S.$2.8 billion);
Europe's infrastructure market is valued at between U.S.$4 trillion
to U.S.$6 trillion (DowJones Financial News Online, August 7, 2007).
Bulgaria - Deutsche Bank Bulgaria is planning to participate in
large infrastructure projects, including public-private partnership
projects in water and sewage worth up to €1 billion (Sofia Echo
Media, February 26, 2008).
Middle East - Along with Ithmaar Bank B.S.C. (an private-equity
investment bank in Bahrain), Deutsche Bank co-managed a U.S.$2
billion Shari'a-compliant Infrastructure and Growth Capital Fund and
plans to target U.S.$630 billion in regional infrastructure.
Deutsche Bank AG is co-owner of Aqueduct Capital (UK) Limited which
in 2006 offered to buy U.K.'s sixth-largest water utility Sutton and
East Surrey Water plc from British tycoon Guy Hand.
According to an OFWAT consultation paper (May 2007), Deutsche Bank formed this new
entity, Aqueduct Capital (short for ACUK), in October 2005, with two
public pension funds in Canada, Singapore's life insurance giant,
and a Canadian province's investment fund, among others.
again, is an illustration of the complex nature of ownership of
water utilities today, with various types of institutions crossing
national boundaries to partner with each other to hold a stake in
the water sector.
With its impressive war chest dedicated to water,
food, and infrastructure, Deutsche Bank is expected to become a
major player in the global water sector.
Other Mega-Banks Eyeing Water as Hot Investment
Merrill Lynch (before being bought by Bank of America) issued a
24-page research report titled "Water scarcity; a bigger problem
than assumed" (December 6, 2007).
ML said that water scarcity is
"not limited to arid climates."
Morgan Stanley in its publication, "Emerging Markets Infrastructure:
Just Getting Started" (April 2008) recommends three areas of
investment opportunities in water:
Mutual Funds and Hedge Funds Join the Action in Water
Water investment funds are on the rise, such as these four
well-known water-focused mutual funds:
Calvert Global Water Fund (CFWAX)
- $42 million in assets as of
2010, which holds 30% of its assets in water utilities, 40% in
infrastructure companies, and 30% in water technologies. Also
between 65% to 70% of the water stocks derived more than 50% of
their revenue from water-related activities.
Allianz RCM Global Water Fund (AWTAX)
- $54 million assets as of
2010, most of it invested in water utilities.
PFW Water Fund (PFWAX) - $17
million in assets as of 2010, with a minimum investment of
$2,500, with 80% invested in water-related companies…
Kinetics Water Infrastructure Advantaged Fund (KWIAX)
million in assets as of 2010, with a minimum investment of $2,500.
This is a brief list of water-centered hedge funds:
Master Water Equity Fund - Summit Global AM (United States)
Water Partners Fund - Aqua Terra AM (United States)
The Water Fund - Terrapin AM (United States)
The Reservoir Fund - Water AM (United States)
The Oasis Fund - Perella Weinberg AM (United States)
Signina Water Fund - Signina Capital AG (Switzerland)
MFS Water Fund of Funds - MFS Aqua AM (Australia)
Triton Water Fund of Funds - FourWinds CM (United States)
Water Edge Fund of Funds - Parker Global Strategies LLC (United
Other banks have launched water-targeted investment funds.
well-known specialized water funds include,
Pictet Water Fund
Sustainable Water Fund
Sarasin Sustainable Water Fund
Swisscanto Equity Fund Water
Several structured water
products offered by major investment banks include,
ABN Amro Water Stocks Index
BKB Water Basket
ZKB Sustainable Basket Water
Wagelin Water Shares Certificate
UBS Water Strategy
Certificate on Vontobel Water Index
There are also
several water indexes and index funds, as follows:
Credit Suisse Water Index
HSBC Water, Waste, and Pollution Control Index
Merrill Lynch China Water Index
S&P Global Water Index
First Trust ISE Water Index Fund (FIW)
International Securities Exchange's ISE-B&S Water Index
The following is a small sample of other water funds and
certificates (not exhaustive of the current range of diverse water
Allianz RCM Global EcoTrends Fund
Allianz RCM Global Water Fund
UBS Water Strategy Certificate - it has a managed basket of 25
Summit Water Equity Fund
Maxxwater Global Water Fund
Claymore S&P Global Water ETF (CGW)
Barclays Global Investors' iShares S&P Global Water
Barclays and PDL's Protected Water Fund based on Barclays World
Invesco's PowerShares Water Resources Portfolio ETF (PHO)
Invesco's PowerShares Global Water (PIO)
Pictet Asset Management's Pictet Water Fund and Pictet Water
Canadian Imperial Bank of Commerce's Water Growth Deposit Notes
Criterion Investments Limited's Criterion Water Infrastructure Fund
One often-heard reason for the investment banks' rush to control of
water is that,
"Utilities are viewed as relatively safe assets in an
economic downturn so [they] are more isolated than most from the
global credit crunch, initially sparked by concerns over U.S.
(Reuters, October 9, 2007).
analyst at HSBC Securities told Bloomberg News that water is a good
"You're buying something that's inflation proof
and there's no threat to earnings really. It's very stable and you
can sell it any time you want''.
(Bloomberg, October 8, 2007).
More Pension Funds Investing in Water
Many pension funds have entered the water sector as a relatively
safe sector for investment.
For example, BT Pension Scheme (of
British Telecom plc) has bought stakes in Thames Water in 2012,
while Canadian pension funds CDPQ (Caisse de dépôt et placement du
Québec, which manages public pension funds in Québec) and CPPIB
(Canada Pension Plan Investment Board) have acquired England's South
East Water and Anglian Water, respectively, as reported by Reuters
Sovereign Wealth Investment Funds Jumping into Water
In January 2012, China Investment Corporation has bought 8.68%
stakes in Thames Water, the largest water utility in England, which
serves parts of the Greater London area, Thames Valley, and Surrey,
among other areas.
In November 2012, One of the world's largest sovereign wealth funds,
the Abu Dhabi Investment Authority (ADIA), also purchased 9.9% stake
in Thames Water.
Billionaires Sucking up Water Globally
George H.W. Bush and Family,
Li Ka-shing, the Filipino Billionaires, and Others
Not only are the mega-banks investing heavily in water, the
multibillionaire tycoons are also buying water.
Update on Hong Kong Multibillionaire Li Ka-shing's Water Acquisition
In summer 2011, the Hong Kong multibillionaire tycoon Li Ka-shing
who owns Cheung Kong Infrastructure (CKI), bought Northumbrian
Water, which serves 2.6 million people in northeastern England, for
$3.9 billion (see this and this).
CKI also sold Cambridge Water for £74 million to HSBC in 2011. Not
satisfied with controlling the water sector, in 2010, CKI with a
consortium bought EDF's power networks in UK for £5.8 billion.
Li is now also collaborating with Samsung on investing in water
Warren Buffet Buys Nalco, a Chemical Maker and Water Process
Through his Berkshire Hathaway, Warren Buffet is the largest
institutional investor of Nalco Holding Co. (NLC), a subsidiary of
Ecolab, with 9 million shares. Nalco was named 2012 Water Technology
Company of the Year. Nalco manufactures treatment chemicals and
water treatment process technologies.
But the company Nalco is not just a membrane manufacturer; it also
produced the infamous toxic chemical dispersant Corexit which was
used to disperse crude oil in the aftermath of BP's oil spill in the
Gulf of Mexico in 2010. Before being sold to Ecolab, Nalco's parent
company was Blackstone...
Former President George H.W. Bush's Family Bought 300,000 Acres on
South America's and World's Largest Aquifer, Acuifero Guaraní
In my 2008 article, I overlooked the astonishingly
purchases (298,840 acres, to be exact) by
the Bush family in 2005
In 2006, while on a trip to Paraguay for the United
Nation's children's group UNICEF, Jenna Bush (daughter of former
President George W. Bush and granddaughter of former President
George H.W. Bush) reportedly bought 98,840 acres of land in Chaco,
Paraguay, near the Triple Frontier (Bolivia, Brazil, and Paraguay).
This land is said to be near the 200,000 acres purchased by her
grandfather, George H.W. Bush, in 2005.
The lands purchased by the Bush family sit over not only South
America's largest aquifer - but the world's as well -
Guaraní, which runs beneath Argentina, Brazil, Paraguay, and
Uruguay. This aquifer is larger than Texas and California combined.
Online political magazine Counterpunch quoted Argentinean pacifist
Adolfo Perez Esquivel, the winner of 1981 Nobel Peace Prize, who
"warned that the real war will be fought not for oil, but for water,
and recalled that Acuifero Guaraní is one of the largest underground
water reserves in South America…."
According to Wikipedia, this aquifer,
covers 1,200,000 km², with a volume of about 40,000 km³, a thickness
of between 50 m and 800 m and a maximum depth of about 1,800 m.
is estimated to contain about 37,000 km³ of water (arguably the
largest single body of groundwater in the world, although the
overall volume of the constituent parts of the Great Artesian Basin
is much larger), with a total recharge rate of about 166 km³/year
from precipitation. It is said that this vast underground reservoir
could supply fresh drinking water to the world for 200 years.
Filipino Tycoon Manuel V. Pangilinan and Others Buy Water Services
In October 2012, Filipino businessman Manuel V. Pangilinan went to
Vietnam to scout for investment opportunities, particularly on toll
road and water services.
Mr. Pangilinan and other Filipino
billionaires, such as the owners of the Ayala Corp. and subsidiary
Manila Water Co. earlier announced a deal to buy a 10-per cent stake
in Ho Chi Minh City Infrastructure Investment Joint Stock Co. (CII)
and a 49-per cent stake in Kenh Dong Water Supply Joint Stock Co. (Kenh
The Ayala group has also entered the Vietnamese market by buying
significant minority interest in a leading infrastructure company
and a bulk water supply company both based in Ho Chi Minh City.
Water Grabbing Is Unstoppable
Unfortunately, the global water and infrastructure-privatization
fever is unstoppable: many local and state governments are suffering
from revenue shortfalls and are under financial and budgetary
These local and state governments can longer shoulder the
responsibilities of maintaining and upgrading their own utilities.
Facing offers of millions of cash from Goldman Sachs, JPMorgan
Chase, Citigroup, UBS, and other elite banks for their utilities and
other infrastructure and municipal services, cities and states will
find it extremely difficult to refuse these privatization offers.
The elite multinational and Wall Street banks and investment banks
have been preparing and waiting for this golden moment for years.
Over the past few years, they have amassed war chests of
infrastructure funds to privatize water, municipal services, and
utilities all over the world. It will be extremely difficult to
reverse this privatization trend in water.
"Goldman Sachs eyes bid for
Veolia Water," by Anousha Sakoui and Daniel Schäfer,
Financial Times, March 13, 2012.
"Hong Kong tycoon to buy
Northumbrian Water," by Mark Wembridge, Financial Times,
August 2, 2011.
"Why Big Banks May Be Buying up
Your Public Water System: In uncertain economic and
environmental times, big banks and financial groups are
buying up public water systems as safe investments," by Jo-Shing
Yang, AlterNet, October 31, 2008.
"Barclays Capital Backs Water
Fund," by Dylan Lobo, October 11, 2007. Reuters.
"Investors Gush Over SouthWest
Water Buyout," March 3, 2010, Forbes.
"Hideout or Water Raid? Bush's
Paraguay Land Grab," by CP News Wire, Counterpunch, October
"Paraguay in a spin about Bush's
alleged 100,000 acre hideaway," by Tom Phillips, The
Guardian, October 22, 2006.
"Cities Debate Privatizing
Public Infrastructure," by Jenny Anderson, August 26, 2008,
The New York Times.
"Philippine tycoon eyes
investments in Vietnam," by Doris C. Dunlao in Manila,
Philippine Daily Inquirer, October 18, 2012.