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INNOVATIONS IN WATER

Driving Water Markets

18 November 2010

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1 Water-The Blue Gold

2 Water Scenario India

3 Market Development Innovative Ways to drive the Market

4 Finance

5 Way Forward

CONTENTS

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Page 3

Water - The Blue Gold

Philips India launchedIntelligent Water Purifier in

2007

WiproWipro Ltd, whichlaunched its venturein the water businessin 2008Wipro Water, adivision of the ITmajor Wipro, isfocusing onexecuting big watertreatment projects, tothe tune of Rs100Crore

Tata forayed into waterbusiness in Dec 2009launching water purifierTata Swach

L& T forayed intoWater transmission & distribution systems.Water treatment plants &Industrial effluent treatment plants.Waste water treatment and disposal.

Gammon

Executed first water projectin 2001

IVRCL Infra & ProjectsExecuted first water project ~1992Water & Environmental projects contribute to 50% share

in revenue ~2006 ~ INR 450 Crs

Aquaguard continues to be the leader indrinking water category, where the penetration

of water purifiers is a mere 2.5 %.

Hindustan Unileverlaunched Pureit in 2005

Warren BuffetBought a water treatmentprovider. A clear signal thatinvesting in water is an untappedopportunity. Water, like oil, is finite.

http://www.google.co.in/imgres?imgurl=http://2.bp.blogspot.com/_M1nrFzOhiWo/TNl7I7VLq5I/AAAAAAAADyU/FWocJFQIg_w/s1600/39197167_gold.jpg&imgrefurl=http://oregonecon.blogspot.com/2010/11/gold-gold-gold.html&usg=__4i1Hq8XYywUuhIg2zKO1bzi_Ih4=&h=300&w=350&sz=26&hl=en&start=2&zoom=1&itbs=1&tbnid=IeBfH2v_LJI4kM:&tbnh=103&tbnw=120&prev=/images?q=gold&hl=en&gbv=2&tbs=isch:1

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Water Scenario-India

Indian industries consumed about50 billion cubic meters of water

Large population still lacks accessto safe drinking water

WaterScarcity-Is a Crisis

loomingahead?

Fresh water available per capitaper annum in India has droppedfrom 5,200 m3 to 1,820 m3 in 01According to WHO, mortality ishigh due to water borne diseases

Text

Surface Water-PollutedGround Water-DepletedRainfall - Wasted

Industry -GrowingWater Reqd- IncreasingWater Recycle- ? ? ?

Quality of water- PoorHealth Issue-IncreasingIndias water future-???

Population IncreasingDemand IncreasingConsumption-Increasing

Establishment of UMPPs will

further strain the thin waterresources

Would the next

world war would

be over water ?

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Market Development - Innovative Ways of Driving theMarket

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Virtual Water-International Water Trading

Countries which imports products containing virtual water from other countries, would becharged extra as scarcity value to the water

Low mean rainfallLow water resourcesLow Fertile Land AvailabilityDry climate and high rate ofevaporation

Low yield of product

Virtual watercontent ofproduct inAustralia= XMm3/yr

Virtual watercontent ofproduct in

Egypt = YMm3/yr

Trade ofproduct

Global Water savings= Y-X Mm3/yr

National Watersavings (Egypt) = YMm3/yr

National Water lossAustralia = X Mm3/yr

Better water management &planningClimatic conditions more

feasibleHigher yield of productBetter productioninfrastructure

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Another Protocol like Kyoto. But this time forWater

An initiative for International Cooperation in the area of water use reduction and conservation.

Primary objective being reducing the consumption of water used

Countries will reduce their aggregate water consumption by certain % below base year

Process of buying and selling of water credits in international market.

Two mechanisms to supplement national actions

To achieve real, long term, measurable & cost effective water reductions

Water Reduction

Mechanism

International

Water Trading(IWT)

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Water Entitlements-National Trading

Process of buying &selling of water accessentitlements Waterrights.

Countries having watertrading-Western states ofthe United States, Chile,South Africa, Australia &Spain's Canary Islands.

Allows scarce waterresources to be transferredto their most productiveuses.

Water Entitlements

Water Allocations

In Australia, the activationstarted in 1980s after the capon Murray-Darling Basin inQueensland

Water trading rules fall underthe Australian Water Act

(2007)

Under the National WaterInitiative (NWI), water trade isthe transfer of water accessentitlements (permanent) andseasonal water allocations(temporary) between differententities

Use

Trade

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Demand Side Management

Water demand management implies actions that influence the quantity of water consumed by users.

DSM will lead to sustainable water systems and markets.

DSM measures should be the first considered and actively incorporated into water policies.

Developing market based mechanism for promoting implementation of DSM measures PerformAchieve & Trade (PAT) for Water.

Trading

DCs exceeding targets

shall be credited with WSCerts

DCs failing to achieve targets

shall either meet target by

buying permits or pay penalties

Goal SettingWater Intensive Consumersshall be measured for Specific Water

Consumption and target will be setfor each Designated Consumer (DCs)

Reduction

Between certain time

period, DCs shall

Reduce their water

consumption to meet

targets

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Recycled Water Certificates -Promoting Recycling

State

regulators

Industry Commercial Residential Agriculture

Recycled waterusage

obligations

Penalty on non-compliance

State agency

RecycledWater

certificates

Recycled water usage obligations (in

% of actual water consumption)can be introduced by waterregulators according to consumption( for above categories)

Certain percentage of obligation canbe obtained by purchasing

Recycled Water Certificates.

The penalty mechanism on non-compliance may be introduced.

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Innovations

Development of Water Savings Companies (WSCos) concept for undertaking waterefficiency projects

Financing of projects based on loan securitization through water credits

Before During thecontract

(less than life span)

After thecontract

Payment

toWSCO E

nd

users

savings

Wate

rBill

Project Start-upContract signed

Transfer of the equipment property

End of the contract

WterBill

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Way Forward

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Way Forward

NationalTrading

WayForward

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Increase inAgriculturalProduction

PovertyAlleviation

Increase inIndustrial

Production

Increase in Agri-based industries

Increase Per capitaIncome

Increased demand forcash crops

Increased demand forIndustrial goods

Education,

Sanitation

Food Supply,Health

EconomicGrowth

Eradicate poverty &hunger

Reduce child mortalityAchieve universal primary

education

Achieve eradication ofHIV/AIDs malaria and

other diseases

SUSTAINABILITY

The lack of clean water and sanitation slows the worlds

economic growth by $556 billion each year.

Water Core For Sustainable Economy

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THANK YOU