Water Will Become the Biggest Global Investment Theme Over the Next Decade

Over the last decade, energy transition has dominated investor conversations: renewables, grids, batteries, electric mobility. Over the next decade, a different but closely connected theme will move to the centre of the stage: water – and in particular, drinking water infrastructure.

From a capital-need perspective, water is already in “mega-theme” territory. Estimates suggest that USD 6.7 trillion will be needed for water-related infrastructure by 2030, rising to USD 22.6 trillion by 2050. (World Bank Blogs) At the same time, around 2.2 billion people still lack safely managed drinking water, and progress towards SDG 6 remains too slow. (un.org)

For professional investors, this combination – essential service, structural underinvestment, clear policy objectives and huge capex requirements – is exactly what defines a long-term global investment theme.

Why water is structurally different – and bigger than most expect

Several forces are converging to push water into the top tier of global investment priorities:

1. Underserved basic need at massive scale

   
   

   Safe drinking water is a non-negotiable basic good. Yet hundreds of millions of people still rely on unsafe sources or intermittent supply. (sdgs.un.org) Closing this gap requires not only new assets, but also rehabilitation of existing systems.

   
   

2. Decades of underinvestment

   
   

   The world needs to mobilise up to USD 7 trillion by 2030 just for global water infrastructure to meet SDG-related commitments and address historic underinvestment. (World Bank Blogs) More than 90% of current spending comes from the public sector, with less than 2% from private sources – a striking contrast to energy or transport. (World Bank Blogs)
   

3. Climate stress on water systems

   
   

   Droughts, floods and extreme weather events are already disrupting water services and damaging infrastructure. Climate scenarios consistently show water as one of the main transmission channels of climate risk – and therefore one of the main levers for climate adaptation investment. (OECD)
   

4. Ageing infrastructure in developed markets

   
   

   In Europe and North America, water networks and treatment plants built decades ago are reaching the end of their design life. Renewal, digitalisation and resilience upgrades will demand sustained capital – even where coverage is already high.
   

5. Policy and regulation catching up

   
   

   Governments, development banks and regulators are increasingly explicit: closing the water financing gap is now a strategic priority, and the private sector has a “key role” in bridging it. (World Bank)
   

Taken together, these drivers mean that water will not remain a niche within infrastructure portfolios. It is on track to become one of the largest, most persistent investment fields of the coming decades – comparable in scale to energy transition.

The heart of the theme: drinking water infrastructure

“Water” is a broad term. For investors, it is important to distinguish between:

• utilities and networks,

• bulk water supply,

• wastewater and reuse,

• agricultural and industrial water use,

• and drinking water infrastructure.

At Grasshopper, the focus is deliberately on drinking water – the point where water, health, social stability and climate resilience intersect most directly.

Drinking water infrastructure has several characteristics that resonate with professional investors:

• Essential, non-discretionary demand

  Households, hospitals, schools and businesses do not “switch off” their need for potable water in a downturn.

  
  

• Long duration, real assets

  Plants and networks are built to operate for decades, aligning naturally with long-term capital and liability structures.
  

• Regulated frameworks

  Even where tariffs are politically sensitive, there is usually a clear regulatory mandate to maintain and improve service levels.
  

• Measurable outcomes

  Volumes treated, people served, service continuity and quality standards provide tangible metrics – both for financial performance and impact reporting.

From invisible risk to visible allocation

Until recently, water has been discussed mainly as a risk: physical risk to assets, regulatory risk, reputational risk in corporate supply chains. The next decade will be about turning that risk perspective into visible allocation:

• Infrastructure and project finance

  New plants, rehabilitation and efficiency upgrades in public water systems will increasingly be financed through combinations of public budgets, development banks and private capital.
  

• Green, blue and sustainability-linked bonds

  Thematic bonds linked to water use, quality and resilience are becoming a recognised segment of the sustainable fixed income universe. For example, recent initiatives by multilateral and European institutions explicitly earmark billions for water-related projects, with the intention to leverage substantial private co-investment. (World Bank)
  

• Climate and adaptation finance

  As climate finance shifts more attention to adaptation, water projects sit at the centre of many adaptation strategies – from securing urban supply to protecting vulnerable regions.
  

• Blended and structured solutions

  In many emerging markets, structured approaches – for example project bonds, PPPs and receivables-based structures – will be key to connecting long-term utility payment streams with private capital, while keeping water services firmly in public hands.

The common thread: water remains a public service, but financing becomes more diversified.

What this means for professional investors

If water is set to become one of the biggest global investment themes over the next decade, how should professional investors respond?

1. Build “water literacy” in investment teams

   Understanding how water projects originate (planning, master plans, utilities, tenders) and where private capital can realistically participate is essential. Water does not behave like a solar park or a data centre.
   

2. Think in complementary pillars

   Central urban infrastructure, decentral solutions for underserved regions, and climate-linked water projects can play different roles in a portfolio – with different risk/return and impact profiles.
   

3. Look for specialist partners

   The key question is not “Is there a project?” but “Who has the sector experience, relationships with utilities and technical depth to turn long project cycles into investable opportunities?”

   
   

4. Connect financial and impact materiality

   In water, financial performance and real-world outcomes are closely aligned:

   Reliable infrastructure, reduced non-revenue water, improved quality and resilience all have both economic and societal value.

Water: from background condition to core portfolio theme

For decades, water has been taken for granted in developed markets and treated as a development or philanthropic topic in many emerging ones. The combination of capital needs, climate dynamics, policy direction and social expectations is now pushing it into a different category:

• not an optional ESG “add-on”,

• but a core building block of resilient, future-proof portfolios.

At Grasshopper, we see water – and especially drinking water infrastructure – as one of the defining investment themes of the coming decade. For investors willing to engage with the specifics of the sector, it offers something rare:

A global, long-duration real asset theme that is essential for people and the planet – and still significantly underrepresented in most portfolios.