The Globe and Mail reports on Toronto-based XPV Capital Corp. and its water investments in an article titled, ‘Precious drops of water prove lucrative’. Forbes business magazine has noted, “XPV may be the first venture capital firm in the world to focus exclusively on water.”
In an interview, XPV managing director and venture capitalist David Henderson comments on:
The relationship between water and industry
“We did a lot of analysis to understand how water plays a role in the input and output of (industrial) processes. What you soon discover is that at every level of the value chain water is mission critical. If you don’t have the right quantity at the right quality at the right time at the right place, those processes fail, or become very economically challenged.”
Water use in Canada
“Our GDP is dependent on the most water intensive industries on the planet: agriculture, mining, oil and gas, food and beverage.”
The use of waste water and the re-use of water
“(There is) finding value in waste water. …The economics of using the same drop of water in the same location over and over again is going to win, ultimately, everywhere. If you don’t have to treat and pump water, it saves an incredible amount of energy.”
The future of desalination
“We don’t have a shortage of water on this planet, we just have a shortage of the water we need. Today it is an energy problem, because the incumbent technologies that we use to produce desalinated water are very energy intensive. We think you are going to see a breakthrough in that area. …People forget that a lot of that desalinated water is not sitting beside the place where it will be used. You still have to pump it and move it. So the economics, even on cheap, low energy desalination are going to become a challenge, once you start adding in all those costs.”
Water innovation
“We have come to the conclusion that there are two areas that are rich in water innovation: Countries that have no water, and countries that have too much water. The countries that have too much water tend to have a lot of water-intensive industries, and they are being pro-active in how they manage that resource.”
On the profitability of water, a World Water Congress media release in April 2010 stated, “As one market analyst notes, as global clean water resources continue to be stressed driving-up the costs, companies involved in developing critical clean water technologies and services necessary to sustain life will benefit in comparison to other investment sectors by superior profits and growth.” In 2009, RBC chief executive officer Gordon Nixon stated, “Canada is well positioned to develop and commercialize technologies to conserve, reclaim, rehabilitate and purify water. The opportunities are limitless. The global water industry is estimated at $400 billion a year and is expected to increase to $1.6 trillion US in the next ten years.”
The full Globe and Mail article is at http://www.theglobeandmail.com/report-on-business/careers/careers-leadership/david-henderson-precious-drops-of-water-prove-lucrative/article6139002/ The Forbes article is at http://www.forbes.com/sites/ericagies/2012/03/26/venture-capitalist-sees-water-as-a-strategic-investment/. The XPV website is at http://www.xpvcapital.com/.
