Water

The Coming Surge of Opportunity

Hank Habicht
The Cleantech Group LA Focus Managing Partner
Nov. 3-4, 2010 SAIL Venture Partners
 Water: A Look Ahead

• The Problems: Scarcity/Stovepipes/Underpricing

(See UN World Water Development Report 3; Johnson Foundation Wingspread
Report (2010)

• The “White Space”—Outsized needs and Opportunities as we see them

• The Cleantech Group Agenda for Water

 SAILSAIL’s
The Vision
VisionThesis
• SAIL’s Vision: to be the Premier Institution in Cleantech Investing:
Integrate our Extensive Networks, Domain and Operational Expertise,
Investment Strategy and Selection, and Portfolio Management and Financial
Discipline to drive Superior Investment Performance
 Investment thesis—Diversify across energy, water and innovative business
models focused on customers and footprint (economics)

• SAIL’s investment strategy is based on the marriage of financial and strategic

partnerships to actively accelerate the growth of breakthrough companies,
resulting in superior returns for our investors

• SAIL’s Water Related Investments:

3
3
 Our Water Future?
• 1.2 billion people without access to safe
water (Nearly 500 million in India and
China)
• India and China’s water spending growth
>20% annually
• Infrastructure needs ($5 trillion): Big gaps
in coverage
• Companies like WaterHealth
International have seized the opportunity
to use technology to provide this vital
resource
• “Water” is a $500B set of companies and
projects—but is still Hydra-headed and ill
defined
 Over 70% of Global Growth in Demand of Energy
and Water will occur in Emerging Economies
Global Energy Demand
(billion tonnes of oil equivalent)
20
18
16
14
12
10
8
6
4
2
0
2000 2010 2020 2030
 Opportunities – “White Space”
• 30B gallons treated to US Drinking Water
Standards;
– Less than 1% is drunk
• 40% of fresh water used for energy
production/distribution
• 40% of the cost of water treatment is energy
• Wastewater is moved and treated miles
away from water-scarce regions
• 85% of US Drinking Water systems serve
<3000 people
• Agriculture = problem can become solution
 Big Growth Spaces: Reuse - Desalination

• Water infrastructure spend in trillions

• Capex for reuse growing ~20% a year
• Reuse rates:
– Israel: 70%
– Singapore-Australia: 30% by 2015
– USA: ~5%
• Desalination - >$15B new investment to
reach 27B gallons/day capacity
• Fossil fuel production – 1.4M m3/day
WW in Poland alone
• India: 5% waste water gets secondary
treatment
Energy Intensity of Water Sources

kWh/Acre-foot
 Solutions: Investment Opportunities?

• Efficiency (includes sensors/analytics)

• Decentralization (reuse)
• Energy footprint (byproduct recovery)
• Technology (nanocomposites/deionization)
• Cross-sector strategies (fighting turf)
• Innovative financing
• True Economics

Challenges
Stovepipes – Purchasing - Processes
 Water
The Coming Surge of Opportunity

Hank Habicht
The Cleantech Group LA Focus Managing Partner
Nov. 3-4, 2010 SAIL Venture Partners