Chile Water Report 2015
BMI View: We view Chile as one of the most attractive markets in the region both for water infrastructurecompanies and, following the announcement of the potential sale of a key water utility, for water servicecompanies. However, we highlight that risks remain for industrial consumers, who will continue to facehigh costs for the construction of water supply and treatment facilities.
The Chilean water sector is one of the most active in the region, with numerous opportunities for waterservices and water infrastructure companies, particularly those involved in water reclamation technologies.We see this as partly due to the almost complete privatisation of the sector, but also due to the fact the watersector is undergoing continual and intensive modernisation and expansion, driven by the combined energiesand funds of the government and the mining sector, which we expect to continue. However, the sheervolume of investments is due to the shortcomings of Chile's natural water resources and the water sectoritself. Water quality and water scarcity remain the two main issues that this water-stressed country is facing.
The problem is magnified by the fact that the country's two biggest industries are agriculture and mining,which are the two largest water consuming sectors. Furthermore, both of these industries contribute heavilyto the pollution of the already scarce natural resource. However, change is in the air with a potential newwater rights allocations legislation and a redefining of glaciers. This could inhibit the mining sector, butshould aid the provision of water for domestic users and small farmers.
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