Is Private Capital A White Knight For America's Water Infrastructure?

By Frank A. McGrew IV, managing director, and Jay Gorman, VP, Raymond James General Industrials Group

Understanding and acceptance of public-private partnerships continue to grow as the gap between infrastructure needs and funding widens.

We are in the midst of a water infrastructure crisis in the United States, with the American Society of Civil Engineers recently grading the quality of America’s wastewater infrastructure a “D.” A confluence of factors including outdated pipes and facilities, population shifts, and inadequate maintenance, has combined to leave our water infrastructure in a state of overstress. In order to meet the challenge of modernizing our water infrastructure, more than $1 trillion of capital investment is needed. The good news is providers of institutional private capital are extremely keen on the water sector and stand ready to provide the funding needed to restore our infrastructure to necessary standards. While political, cultural, and structural hurdles exist in deploying this capital, the private sector is now an integral piece of our water infrastructure puzzle. In this article, we will explore how localities are overcoming these hurdles and using a myriad of private sector solutions, ranging from consulting arrangements to full private ownership, to meet regulatory requirements, modernize facilities, unlock hidden value, and ultimately better serve their customers.