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To Solve the Water Crisis, We Must Rethink the Way We Invest

Power of Ideas
To Solve the Water Crisis, We Must Rethink the Way We Invest

2020 often feels nothing short of apocalyptic. The deadly coronavirus pandemic has killed over 1 million people worldwide. The climate crisis is unleashing historic hurricanes and wildfires that are turning towns into ash. And rates of inequality are skyrocketing in our communities, further exacerbated by the pandemic’s economic and health effects.

Yet, beyond the headlines, one sweeping challenge sits at the nexus of all of these crises: a tragedy in its own right that risks accelerating these threats to public health, the environment, and economic security if our global community does not rise to meet the moment—and that is the global water and sanitation crisis.

Today, more than 2.7 billion people—that’s seven times the US population—lack access to clean drinking water and sanitation. Women and girls disproportionately bear the brunt of this crisis, walking as many as six hours a day looking for water and a safe place to go to the bathroom. Communities across every part of the globe are affected: children forced to miss school, mothers compelled to trek miles to find a water source, families getting sick from deadly yet preventable diseases. And the toll on human life is simply staggering: 4,000 children die from a lack of access to safe water—not every year, or every month, but every single day.

If we can marshal the urgency and human ingenuity to solve the global water crisis, we can tackle some of the most entrenched and systemic problems in our world.

But there’s a reason to be optimistic. If we can marshal the urgency and human ingenuity to solve the global water crisis, we can tackle some of the most entrenched and systemic problems in our world.

Because here’s the secret we’ve learned: Just as the water crisis is a force-multiplier for inequality, climate change, and communicable disease, it is also an accelerant in solving those same challenges.

Our organization, WaterEquity, was born from a spirit of fearless thinking and relentless innovation, powered by a vision and track record that demonstrate the unprecedented opportunity that comes from aligning the world’s most powerful capital resources to its biggest challenges.

WaterEquity is the first asset manager exclusively focused on solving the global water crisis. Our experts know that the biggest bottleneck between people and safe water and sanitation is access to affordable finance, so we’re dedicated to forging a global capital market that closes that financial gap through smart, profitable investments.

The model is simple yet powerful: WaterEquity funds provide debt capital to financial institutions in emerging markets to help scale their water and sanitation microloan portfolios. These microloans then enable low-income consumers to install water and sanitation solutions in their homes, such as a water connection or toilet, leading to improved health outcomes, educational opportunities, and economic security.

Over time, WaterEquity aims to scale its investments across the water and sanitation ecosystem,creating optimal opportunities for impact investors to generate both competitive financial returns and long-term social impact. In just three years, WaterEquity has deployed capital in record time—empowering more than 1.6 million people while also providing attractive returns to investors. Our work has continued to expand and scale during COVID-19, further highlighting the urgency of investing in safe water and sanitation—without which people can’t wash their hands, practice social distancing, and arrest the spread of the pandemic.

At WaterEquity, we believe that the possibilities are endless. Economists estimate that there is a $1 trillion market opportunity for providing water and sanitation services to all people worldwide by 2030. Among emerging consumers, the market potential is $18 billion, with at least 600 million people lacking access to safe water and sanitation ready to be reached if microloans were available. There’s a huge gap for water and sanitation enterprises, too, with up to two-thirds of small and medium-sized enterprises in emerging markets either unserved or underserved by financial institutions.

WaterEquity is purpose-built to meet this demand. In November 2019, we launched a $150 million impact fund that we expect to reach 5 million people across Asia, Latin America, and Africa over its seven-year term, and another 3 million indirectly, as our borrowers scale their water and sanitation microloan portfolios. We’re proud that 60 percent of end-clients who will receive these microloans are women and that 100 percent reside in low and middle-income countries.

During this precarious moment, we have an extraordinary opportunity to harness capital, energy, and ingenuity not only to tackle the challenges of today but to advance a better world for tomorrow. Let’s get started.