Two billion people lack safe drinking water. A further two billion face water stress within the next decade. The World Economic Forum has identified a €6.5 trillion water infrastructure gap — the difference between what governments are spending and what the world's water systems require to function. This gap cannot be closed by public spending alone. Private investment is needed. But it must be investment that serves people — not investment that exploits them. This letter is written with that principle at its centre.
Not investment advice. Not a recommendation to buy or sell. Research and long-horizon thinking only. Consult a qualified financial advisor before making any investment decision.
We begin this letter with a statement that no investment analysis about water can afford to omit: water is a human right. The United Nations declared it so in 2010. Every person on earth, regardless of income, geography, or political circumstance, has the right to sufficient, safe, acceptable, physically accessible, and affordable water for personal and domestic use. This is not a policy preference. It is a foundational moral position.
But rights do not build themselves. Clean water does not flow from the declaration of a right. It flows from pipes, pumps, treatment plants, reservoirs, desalination facilities, monitoring systems, and the thousands of engineers and technicians who operate them every day. Infrastructure costs money. Maintenance costs money. Innovation costs money. And in most of the world, governments do not have enough money — or, too often, the political will — to close the gap between the water systems that exist and the water systems that the world's eight billion people require.
This is where private investment enters — but it must enter with a discipline that the history of water privatisation has not always demonstrated. The poor must not fear their water bill. The rich must not grow greedy from their water dividend. The investor must seek stable, long-term returns that are structurally aligned with the interests of the people they serve. When private investment in water works — as it has in parts of France, the UK, Chile, and Singapore — it works because that alignment is enforced by regulation, governance, and genuine public accountability. When it fails, it fails because that alignment breaks down. This letter is about the companies where it works.
"The poor must not fear their water bill. The rich must not grow greedy from their water dividend. The investor who serves water must be the servant of the system — not its master."
The World Economic Forum's December 2025 report — produced in collaboration with Cambridge University — identified a €6.5 trillion water infrastructure gap. This is the accumulated deficit between what water systems worldwide require in investment and what is currently being spent. It is not a future projection. It is a current deficit that compounds every year that action is delayed.
The gap has multiple dimensions. In the developing world, the most urgent need is basic access — pipes, pumps, treatment plants that do not yet exist. In the developed world, the most urgent need is replacement — ageing infrastructure built in the 1950s and 1960s that is reaching end of life simultaneously. In the United States alone, a water main breaks every two minutes. The UK loses 20% of treated water to leakage before it reaches a tap. India's rapidly growing cities are adding millions of new residents to systems that were already under capacity.
And there is a new dimension that was not in previous analyses: AI data centres are now among the fastest-growing water consumers on earth. Training large AI models requires water-cooled computing infrastructure at enormous scale. Microsoft, Google, and Amazon are investing in closed-loop water recirculation systems — but the net demand is still growing. The AI supercycle and the water crisis are not separate stories. They are the same story.
"A water main breaks in the United States every two minutes. The UK loses 20% of treated water before it reaches a tap. Every year of delayed investment makes the gap larger and the crisis more acute."
Xylem is not a water utility. It is the technology company that makes water utilities work better. Pumps, treatment systems, analytics platforms, smart metering, leak detection, PFAS remediation — Xylem supplies the hardware and software that water systems around the world depend on. Its Sensus brand has deployed over 20 million smart water devices across 100 countries. Its analytics platforms process billions of data points daily to help utilities find leaks, predict failures, and optimise treatment.
The NGE position on Xylem is specific: this is the company that helps governments and utilities do their job better, at lower cost, with less waste. Every litre of water saved through Xylem's leak detection is a litre that does not need to be pumped, treated, and distributed — reducing both cost and carbon. Every predictive maintenance alert that prevents a main break avoids the six dollars of damage per dollar of infrastructure investment that breaks cost. Xylem's business model is structurally aligned with the public interest — not because it is altruistic, but because its revenue grows when water systems improve.
The PFAS remediation opportunity deserves specific attention. PFAS — per- and polyfluoroalkyl substances, known as "forever chemicals" — contaminate the drinking water of millions of people globally and are now subject to strict regulatory standards in the US and EU. The approximately 66,000 US public water systems facing PFAS compliance requirements represent a multi-decade remediation market. Xylem's PFAS360 product group is the leading commercial solution.
Veolia is the world's largest environmental services company — water, waste, and energy transformation operating across 57 countries. It is the company governments call when they need water infrastructure built, operated, or improved at scale. In February 2025, Veolia signed a 25-year design-build-operate contract for a 600,000 cubic metre per day seawater reverse osmosis desalination plant in Saudi Arabia — the largest SWRO desalination contract ever awarded globally. This is the scale at which Veolia operates.
The important distinction with Veolia — and the reason it appears in a letter about responsible water investment — is its operating model. Veolia does not typically own water assets outright. It operates them under long-term contracts with governments that retain ownership and set the price and quality standards. The government remains the guardian of the public interest. Veolia provides the operational excellence, the technology, and the capital efficiency that public utilities often cannot achieve alone. When this model works — as it does in France, where Veolia's origins lie — it combines public accountability with private efficiency.
The Suez acquisition, completed in 2022, made Veolia the dominant force in global water and waste treatment by a significant margin. The scale enables investment in technology, talent, and digital platforms that no individual utility could afford. Veolia's digital water platform — combining AI, IoT sensors, and predictive analytics — is being deployed across its global portfolio to reduce leakage, improve quality, and lower energy consumption.
VA Tech Wabag is India's — and Asia's — most important independent water treatment company. Founded in 1924 as an Austrian company, now headquartered in Chennai with Indian management since 2007, Wabag designs, builds, and operates water and wastewater treatment plants across India, the Middle East, Africa, and Southeast Asia. It is the company that brings water treatment technology to the markets that need it most.
The India opportunity is structural and urgent. India has the world's largest population, the fastest-growing major economy, and some of the most severe water stress conditions on earth. 600 million Indians face high to extreme water stress. Rapid urbanisation is adding tens of millions of people to cities whose water infrastructure was designed for a fraction of their current population. Government programmes — Jal Jeevan Mission, AMRUT 2.0 — are committing hundreds of billions of rupees to water infrastructure. Wabag is the primary private sector partner for these programmes.
The emerging market water investment thesis is different from the developed market one. In Europe and North America, the challenge is replacing ageing infrastructure. In India, the Middle East, and Africa, the challenge is building infrastructure that does not yet exist. The scale of the opportunity is correspondingly larger — and the social impact of getting it right is immeasurably more significant. Every new water treatment plant Wabag builds in India is not just an asset on a balance sheet. It is clean water for hundreds of thousands of people who previously did not have it.
Private investment in water can supplement public spending. It cannot replace it. The history of water privatisation contains enough cautionary tales to establish this principle beyond reasonable doubt. In Bolivia in 2000, private water pricing triggered the Cochabamba Water War. In Tanzania in 2005, a private water concession failed to serve the poor and was cancelled. In the UK, private water companies have paid billions in dividends while sewage overflows into rivers. These failures share a common cause: inadequate regulation, inadequate accountability, and inadequate protection of the public interest.
The solution is not to exclude private investment. It is to govern it properly. Governments must set the framework: price controls that protect affordability, service standards that are legally enforceable, reporting requirements that are transparent, and regulatory bodies that are genuinely independent of both government and industry. With that framework in place, private capital can play a constructive role — bringing efficiency, technology, and scale that public utilities often cannot achieve alone. Without it, private capital in water is a threat to the most vulnerable people in any society.
Every government reading this — and we hope some do — should make water infrastructure a budget priority that is immune to political cycles. A kilometre of water pipe lasts sixty years. The government that builds it today serves three generations of citizens. The government that delays because of short-term budget pressure condemns those same citizens to inadequate access, higher disease burden, and lower economic productivity. The arithmetic of water investment is the most compelling in public finance. For every dollar invested in water infrastructure, six dollars of future damage is avoided. That is not a good investment. It is an extraordinary one.
The $1Q thesis identifies 16 compounding forces. Water is not listed as one of them — because water is not a force within the $1Q. It is the precondition for all of them. AI data centres need water cooling. Agricultural productivity — which feeds the eight billion people whose consumption drives the global economy — depends on irrigation. Industrial manufacturing requires water at every stage. The green energy transition requires water for cooling, hydrogen production, and mineral processing. Human health — the foundation of human economic participation — depends on clean water more than any other single factor.
A world that reaches the quadrillion economy without solving its water crisis is not possible. It is a mathematical fiction. The countries that solve water security fastest will grow fastest. The companies that enable that solution will compound longest. And the billions of people who gain access to reliable clean water for the first time will add their productivity, their creativity, and their consumption to the global economy — contributing to the $1Q in ways that no forecast can fully capture.
Two billion people do not have safe water today. Every year of delayed investment makes that number larger. Every well-governed private investment that builds a treatment plant, fixes a leaking main, or deploys a smart sensor that prevents a break is an investment that pays a return in money — and in something that money cannot buy. The business of water, done right, is the business of keeping people alive. Invest accordingly.
Written from first principles. Not consensus. Not noise. Long-horizon thinking on capital, technology, and the forces shaping the next decade of wealth creation. Published when something is worth saying — not on a schedule.