United Water, one of the largest water services providers in the nation, made a Commitment to Action today at the Clinton Global Initiative (CGI) Annual Meeting in New York that offers cities across the U.S. a new long-term solution to the challenge of meeting current and future water needs.
Continued growth in demand for water along with competing needs for other municipal services - from roads and fire departments to police and schools has stretched city finances beyond their limits. This, coupled with dwindling federal support for cities, has led to a decades-long decline in the nation’s water infrastructure. The American Society of Civil Engineers grades the country’s water system a “D” and the US Environmental Protection Agency says it will take more than $600 billion during the next two decades to bring pipes and treatment facilities nationwide back to standard.
As a Featured Commitment at the “Working Capital” plenary session of the CGI Annual Meeting, opened by President Barack Obama, United Water is being highlighted for bringing an innovative, cross-sector solution – and new financing model – to the challenge that many municipalities face today.
• United Water’s ‘Solution’ will upgrade and operate water systems more efficiently, help cities meet increasing environmental and water quality standards and attract new long-term capital from private equity partners.
• This new money will be used specifically to upgrade water systems and also to help ease pressure on municipal balance sheets, freeing cities to invest in other public services.
• Under this innovative contractual approach, municipalities maintain ownership and control of the water or wastewater system and of rates charged to users.
• Sustained and predictable investment in water will create new infrastructure-related jobs and spur growth in local economies.
“By making a Commitment to Action at CGI we aim to bring attention to a challenge facing America that has literally been buried for decades. What’s different about our solution is that – for the first time in the U.S. – our ability to improve water quality and operational efficiency is combined with the private equity investment needed to upgrade and maintain systems and stabilize water rates over the long term,” said Bertrand Camus, CEO of United Water.
United Water’s Commitment to Action comes on the eve of the 40th anniversary this October of the Clean Water Act (CWA) – landmark legislation that brought the first regulatory standards for water into being. Since the passage of the CWA, federal funding once available to help cities invest in water infrastructure and meet environmental standards has slowed to a trickle. United Water along with private equity partners will help cities now struggling to maintain and upgrade their water systems and help them meet Environmental Protection Agency standards.
Specifically, in its Commitment to Action, United Water and private equity partners will invest in two municipal water systems. United Water’s intention is to bring this innovative model to many other municipalities in the years to come.
• In the City of Bayonne, New Jersey, United Water and its joint venture partner Kohlberg Kravis Roberts, will, over the 40-year duration of the contract, make a $107 million capital investment in the water system and also retire $130 million of overhanging Bayonne Municipal Utility Authority debt. Initial capital investment in highly accurate wireless water metering and other monitoring systems, such as GIS, SCADA, and CMMS, will help reduce water loss from leakage, prioritize pipe replacement and improve operational efficiency. KKR has a long history of making infrastructure investments and a proven commitment to improving the operational and environmental performance of the companies in their portfolio, making them an ideal partner for this investment.
• United Water has also been selected to work with Nassau County, New York to improve the county’s wastewater system.
“Maintaining clean, sustainable water supplies is the single most important contributor to public health and it is essential to creating vibrant local economies. With ever increasing pressure on scarce water resources and dwindling public funds, the private sector has a more important role than ever to provide a lasting solution to America’s water challenge.” said Mr. Camus.
About United Water
United Water is one of the nation’s leading environmental companies, providing water and wastewater services to approximately 5.7 million people in the United States. In addition to owning and operating 20 water utilities, the company operates 100 municipal and industrial water and wastewater systems through innovative public-private partnerships and contract agreements. Founded in 1869, United Water is a subsidiary of SUEZ ENVIRONNEMENT.
About SUEZ ENVIRONNEMENT
Natural resources are not infinite. Each day, SUEZ ENVIRONNEMENT (Paris: SEV, Brussels: SEVB) and its subsidiaries deal with the challenge of protecting resources by providing innovative solutions to industries and to millions of people. SUEZ ENVIRONNEMENT supplies drinking water to 91 million people, provides wastewater treatment services for 63 million people and collects the waste produced by close to 57 million people. SUEZ ENVIRONNEMENT has 80,410 employees and, with its presence on a global scale, is a world leader exclusively dedicated to environmental services. SUEZ ENVIRONNEMENT, a 35.7% GDF SUEZ affiliate, achieved revenue of 14.8 billion Euros ($19.6 billion USD) at the end of financial year 2011.
About the Clinton Global Initiative (CGI)
Established in 2005 by President Bill Clinton, the Clinton Global Initiative (CGI) convenes global leaders to create and implement innovative solutions to the world’s most pressing challenges. CGI Annual Meetings have brought together more than 150 heads of state, 20 Nobel Prize laureates, and hundreds of leading CEOs, heads of foundations and NGOs, major philanthropists, and members of the media. To date CGI members have made more than 2,100 commitments, which are already improving the lives of nearly 400 million people in more than 180 countries. When fully funded and implemented, these commitments will be valued at $69.2 billion. CGI also convenes CGI America, a meeting focused on collaborative solutions to economic recovery in the United States, and CGI University (CGI U), which brings together undergraduate and graduate students to address pressing challenges in their community or around the world. For more information, visit clintonglobalinitiative.org and follow us on Twitter @ClintonGlobal and Facebook at facebook.com/clintonglobalinitiative.
Founded in 1976 and led by Henry Kravis and George Roberts, KKR is a leading global investment firm with $61.5 billion in assets under management as of June 30, 2012. KKR refers to Kohlberg Kravis Roberts & Co. L.P. and its affiliates. With offices around the world, KKR manages assets through a variety of investment funds and accounts covering multiple asset classes. KKR seeks to create value by bringing operational expertise to its portfolio companies and through active oversight and monitoring of its investments. KKR complements its investment expertise and strengthens interactions with investors through its client relationships, capital markets and global stakeholder relations platform. KKR is publicly traded on the New York Stock Exchange (NYSE: KKR). For additional information, please visit KKR’s website at www.kkr.com.