Clean and Safe Drinking Water – Why It Matters for Investors

When you open a tap in Frankfurt, Amsterdam or Zurich, you don’t think about it. The water is simply there – clear, drinkable, reliable. For most people in Europe, this feels so normal that it almost disappears from view.

Globally, however, this “invisible” infrastructure story looks very different.

According to WHO/UNICEF data, around 2.2 billion people still live without safely managed drinking water – roughly one in four people worldwide. (unwater.org) And even where water is available, networks are often fragile, over-stretched or ageing. At the same time, climate change, urban growth and rising consumption are putting additional pressure on already stressed systems. (OECD)

For investors, this raises two fundamental questions:

1. How big is the global challenge?

2. What role can private capital realistically play – without compromising the public character of water?

The global challenge behind a glass of water

To understand the scale, it helps to zoom out from the glass to the system behind it.

Providing safe drinking water is not just about a water source. It requires:

• Abstraction and storage – capturing water from rivers, lakes, aquifers or desalination plants.
  

• Transport and treatment – bringing raw water to treatment facilities and ensuring it meets quality standards.
  

• Distribution networks – pipelines, pumping stations, reservoirs and pressure zones that deliver water to households, hospitals, schools and businesses.
  

• Operation and maintenance – monitoring, leak detection, repairs, energy use, billing and customer service.
  

In many regions, this chain is broken or under severe strain. The UN estimates that decades of underinvestment have created a multi-trillion-dollar gap in global water infrastructure that needs to be closed by 2030 if water-related SDGs are to be met. (World Bank Blogs)

The consequences are not abstract:

• lost school days and productivity due to water-borne illness,

• higher healthcare costs,

• constraints on agriculture and industry,

• and, in fragile regions, additional stress on social stability and migration.

An essential service – and a structural investment theme

For investors, drinking water has a number of characteristics that are very different from many “trend” themes:

• Non-discretionary demand

  People, cities and industries will always need water. Consumption may shift, but it does not disappear.
  

• Long-lived assets

  Once built, water infrastructure is designed to operate for decades. This naturally aligns with long-term capital.
  

• Link to climate resilience

  More frequent droughts, floods and extreme weather events increase the need for robust drinking water systems, diversification of sources and smarter networks. (IFC)
  

• Direct connection to SDG 6 and beyond

  Investment in drinking water touches health, education, gender equality, economic development and climate adaptation at the same time. (World Health Organization)

Yet despite this, private capital still plays only a very small role in the sector. World Bank data show that more than 90% of current water spending comes from the public sector, with less than 2% from private sources. (World Bank)

This is precisely where specialised project developers and structuring partners can make a difference.

Why water projects are not “plug and play”

Many investors are used to the logic of renewable energy: a solar or wind project, a power purchase agreement, a clear project SPV, and relatively standardised contracts.

Drinking water looks very different:

• Projects are often anchored in public utilities and long-term planning processes.

• They are embedded in master plans and national or regional strategies for water supply.

• They need to reflect local conditions: water sources, climate, urban growth, existing networks and regulatory frameworks.

• The implementation involves multiple professional parties – utilities, engineering firms, consultants, sometimes development banks and local partners.

  
  

This complexity is one reason why many investors shy away from water: it is not always obvious where and how to engage without taking operational roles that belong with utilities and operators.

However, within this complexity there are clearly definable segments where private capital can be linked to:

• specific parts of the infrastructure,

• long-term payment streams (for example from public utilities under contractual arrangements), and

• transparent, measurable impact indicators.

The opportunity: closing the gap between public mandate and public budgets

The mandate to provide safe drinking water is public. But public budgets in many regions are not sufficient to close the infrastructure gap on their own.

International organisations, development banks and policymakers therefore increasingly highlight the need to mobilise private capital for water, alongside public funding. (European Commission)

For investors, this is not about privatising water or buying utilities. It is about:

• financing specific, clearly defined projects or portfolios,

• where the service remains public,

• but technologies and project structures are designed in a way that allows long-term oriented capital to participate.

  
  

Done properly, this creates a triple alignment:

1. People and communities gain reliable access to clean and safe drinking water.

2. Public utilities receive modernised infrastructure and support in delivering their mandate.

3. Investors gain exposure to an essential real-asset theme with clear environmental and social co-benefits.

What thoughtful investors should look for

For those considering allocations to drinking water as an investment theme, a few guiding questions can help:

• Who is behind the projects?

  Is there deep sector expertise and a track record in water – not just in finance?
  

• How are projects selected and prepared?

  Are they part of broader water strategies and master plans, or isolated one-offs?
  

• What exactly is being financed?

  Is the focus on well-defined parts of the infrastructure and technology, or on taking broad construction and political risks?
  

• How are revenues generated?

  Are they linked to public utilities and stable, long-term service arrangements?
  

• How is impact measured and reported?

  Are there clear indicators for people reached, volumes of clean water provided, climate and resilience benefits?

Clean drinking water as a cornerstone of future-proof portfolios

Clean and safe drinking water is one of the quiet foundations of modern life. When it works, it is invisible. When it fails, everything else becomes harder: health systems, education, economic activity, climate adaptation.

For investors, this is not only a moral or philanthropic topic. It is a structural, long-term investment theme that will shape the coming decades: from replacing ageing infrastructure in developed markets to building entirely new systems in fast-growing cities and climate-vulnerable regions.

At Grasshopper, we focus on precisely this interface: where professional water projects and private capital can meet in a way that respects the public character of water, supports utilities and communities, and offers a clear, long-term perspective for investors.