Fund Buys Chilean Water Companies

Ontario Teachers’ Pension Plan makes its first water infrastructure investments in South America. But what about Canadian water systems?

Toronto Star’s May 16 article Teachers buys two water utilities in Chile announces that the US$95-billion Teachers’ fund has acquired:

• 50.01% of Empresa de Servicios Sanitarios del Bio-Bio, Chile’s second-largest water and waste-water utility with 610,000 customers; and
• 100% of Aguas Nuevo Sur Maule with 195,000 customers.

Why would the Teachers’ Fund focus on Chile when Canada’s water and wastewater systems are in dire need of investment?

While Canada is one of the world’s most water-rich nations, few Canadians consider that much of Canada’s water pipe infrastructure was laid over a hundred years ago as cities were built. Old corroded pipes can have leakage rates exceeding 25%.

Seasoned global water investment experts at Aqua Terra Asset Management (ATAM) provide quantitative and qualitative analyses on worldwide water opportunities and challenges.

Research from ATAM points to a Fraser Institute report that highlights underlying problems with Canadian water systems. These include:

• the age of Canadian water systems
• a growing population that exceeds system capacity
• poor management and ill-trained staff
• lax regulation
• a lack of capital and operating funds.

ATAM also presents a finding from Canada’s National Round Table on the Environment and the Economy that, over the 20-year period to 2016, Canada must invest up to US$49 billion to maintain and refurbish existing water and sewage infrastructure.

Perhaps the Chilean government is more amenable to Canadian investment in its water systems because, unlike Canada, the South American country better understands the urgent need to invest in its own water resources.