Smart water infrastructure can address the problem of water scarcity and water management and has the potential to save $12.3 billion each year if fully implemented, a study from Northeast Group said.
Water scarcity is expected to grow more severe, even potentially leading to conflict between nations. An incredible 38 percent of all water produced in emerging market countries is lost to leakage from poor infrastructure, waste, and theft.
In fact, 72 emerging market countries are projected to cumulatively spend $46.5 billion by 2023, the study said. Spending will be allocated across smart water metering, smart water networks, smart irrigation and software analytics to optimize water use.
“Emerging market nations are struggling with water scarcity and cannot continue to ignore the full cost of water and water losses,” said Ben Gardner, president of Northeast Group. “Implementing smart water infrastructure is a critical step these countries must take to address their water challenges.”
Northeast Group’s study calculates a “full cost of water” to account for implicit subsidies and infrastructure costs that are often not captured in utility tariffs.
It uses this and current tariff costs to assess the savings potential for smart water infrastructure projects across 72 countries. The $12.3bn savings potential conservatively assumes one-third the difference between current tariffs and the full cost of water in each country.
Gardner says the return on investment for smart water projects is very positive, with payback periods often of just a few years. Financing and technical issues remain challenging in some countries, but smart water infrastructure has benefits that far exceed costs in almost all markets, the research said.