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Oxford Business Group

Oxford Business Group

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Emerging Markets Embrace Innovative Water Management Strategies

  • Water scarcity to affect an increasing proportion of the world’s population.
  • Several emerging markets have launched national water-management strategies.
  • Upgrades to infrastructure and smart metering help to reduce water loss.
  • Innovative funding mechanisms key to financing water security projects.

With extreme weather events such as drought or flooding becoming more common due to climate change, countries around the world are looking to innovative solutions for water management.

Water scarcity captured global headlines last summer, as Europe experienced its worst drought in 500 years and China’s Yangtze River reached record low levels, derailing hydropower operations. Elsewhere, widespread flooding affected Nigeria, India, Pakistan and other parts of the world.

Due to population growth, climate change and the rise of water-intensive clean energy technologies, the gap between renewable water supply and demand is expected to reach 40% by 2030, according to US investment bank Morgan Stanley. The UN estimates that drought could affect over three-quarters of the world’s population by 2050.

However, progress is being made, with the percentage of the global population with access to safely managed drinking water at home rising from 70% to 74% between 2016 and 2020, and an estimated 107m people gaining access in 2020 alone.

Thanks to new government strategies, public-private initiatives and improvements in monitoring technologies, emerging markets are modernising their water-management and distribution networks while working to limit waste, and conserve and augment existing sources.

Monitoring technologies

In water-constrained areas, reducing water loss – also known as non-revenue water (NRW) – is typically more cost-effective than supply augmentation. New technologies such as smart meters and sensor networks can help limit loss and mitigate potential contamination.

Smart meters offer an internet-of-things solution to NRW by monitoring water distribution and usage, helping to identify inefficiencies and instances of leakage and theft. Market analyst firm Transforma Insight estimates that 700m smart water meters will be deployed globally by 2030. Related: Bacteria Breakthrough Could Simplify Rare Earth Element Processing

Founded in 2017, Egyptian start-up Pylon offers subscription-based smart metering as a service to water and energy companies in Egypt and the Philippines, with plans to expand in Africa and South-east Asia. The company, which raised $19m in a seed funding round last year, leverages smart-grid infrastructure to help its clients reduce water losses by an estimated 22%, enough to serve 40m people per day.

Sensors can also play an integral role in improving sanitation efforts by identifying potential contaminants.

US-based water monitoring technology company Virridy, for example, aims to use investment from a June 2022 $5.5m Series A funding round to develop water E-coli sensors. The company already operates a network of satellite-linked borehole water monitors to boost drought resilience in Ethiopia, Kenya, Nigeria, Rwanda, Sierra Leone and Uganda.

Outdated or insufficient infrastructure is a major driver of NRW, with emerging markets losing some 45m cu metres daily to leakages from ageing distribution networks, according to the World Bank.

In 2022 Manila Water, the water services company responsible for the Philippine capital, reduced NRW to 12.7%, well below the World Bank standard of 25% and on a par with NRW levels in Japan and Western Europe. The company used a combination of modern metering and infrastructure repairs, with strong communication networks with local stakeholders allowing for quick responses to leakages or theft.

In addition to limiting municipal NRW, addressing inefficiencies in irrigation systems is an important step towards ensuring global water security. With roughly 70% of global water usage dedicated to agriculture, improved monitoring and more sustainable agriculture practices in emerging markets are helping to boost food security around the world.

Conservation strategies

Ensuring universal access to and sustainable management of clean water and sanitation by 2030 is the focus of UN Sustainable Development Goal (SDG) 6. To help organise global efforts for sustainable water management into actionable commitments, the first UN Water Conference in 50 years was held in New York City in March 2023.

On a national scale, a number of countries have prioritised management of water supplies in recent years, with both government plans and new financing arrangements seeking to ensure improved water access.

In December 2022 Vietnam’s prime minister approved a water resources planning scheme for 2021-30 that includes the goals of reducing water loss in supply activities to 10%, and increasing clean water access rates to 95-100% for urban areas and 65% for rural areas by 2025.

Saudi Arabia, which has the world’s third-highest per capita water consumption behind the US and Canada, aims to reduce its usage by 43% by the end of the decade, in line with Saudi Vision 2030. In early 2023 the Kingdom announced the tendering of six wastewater treatment projects under public-private partnership (PPP) schemes to help upgrade the country’s infrastructure and reduce NRW.

In order to improve water access, countries such as Saudi Arabia have invested in desalination plants, especially as the industry attempts to reduce its carbon footprint and commodify wastewater.


Financing is central to the success of water-management projects, with the OECD estimating costs of $1trn per year, or 1.21% of global GDP, to achieve SDG 6. Beyond government expenditure, performance-based contracting offers a key financing opportunity, incentivising companies based on their record for reducing NRW.

Ho Chi Minh City – Vietnam’s most populous urban area, which is at risk of flooding and freshwater scarcity – has effectively utilised this contracting model to upgrade its water distribution and sanitation infrastructure, saving the city an estimated 122m litres of water daily.

In March 2023 global investment company Metito and British International Investment, the UK’s development finance institution, announced the launch of the Africa Water Infrastructure Development platform, which aims to fund sustainable water projects across Africa and boost the continent’s overall water security. The platform’s first asset, a 40,000-cu-metre-per-day bulk surface water treatment plant in Kigali, Rwanda, provides 25% of the city’s potable water supply and is the first PPP-run plant in sub-Saharan Africa outside of South Africa.

By Oxford Business Group

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