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A new regulatory landscape in the United States is creating investment opportunities for private companies willing to invest strategically in U.S. water markets, a new report published by Bluefield Research suggests. Private companies are well positioned to make an impact on the market by bridging a $500 billion investment gap for drinking water and wastewater treatment projects over the next 20 years, according to the report.
The industry has been going through tough investment conditions over the past 25 years, but the adoption of the Water Resources Reform and Development Act (WRRDA) in June is expected to give the market a significant boost. By signing the document and effectively turning it into federal law, President Obama facilitated the development of a modernized water infrastructure that would benefit everybody, Bluefield Research pointed out.
The WRRDA includes a series of measures that would encourage private water investments, such as the proposed establishment of a federal water authority and lifting the caps on private water bonds. In addition, the law sets out new guidelines for public-private partnership legislation, expected to support water system upgrades and optimization of water management for US municipalities.
At present, the US water market is highly fragmented and consists of more than 100,000 systems, according to the report. Privately-owned networks account for water supply to about 15% of the US population under current conditions but the new regulatory environment could change that, according to Bluefield.