S&P Global Ratings’ Trevor D’Olier-Lees tells Institutional Investor that bundling could incentivise water infrastructure investment


America has a water crisis – one that not only encompasses flooding but also droughts, poor supply quality and even contamination – and underinvestment is a significant contributing factor. To raise the estimated US$655bn needed over the next 20 years to maintain a safe water supply, states must incentivise private financiers by making water infrastructure a more attractive investment opportunity.

Quoted in an Institutional Investor article, S&P Global Ratings’ senior director, Trevor D’Olier-Lees, highlights one infrastructure financing model that has seen an upturn in recent years: bundling.

“The trouble with water is a lot of typical projects might only cost US$7 million, US$10 million, or even US$40 million, and you really don’t get investors excited about that size of project,” says D’Olier-Lees. “What bundling does is it takes a series of projects into one financing and suddenly investors say, ‘I’m interested in that.’”

With 53,000 regulated water authorities in the U.S., it is believed that bundling could help the convoluted network to raise the vast sums of capital needed to repair its ageing infrastructure.

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