Chilean Water: A sustainable investment in clean water
The investment: In 2007, we acquired a majority stake in four water companies in Chile.
In the early 1990s, significant investment in public water was needed to address Chile’s urgent sewage treatment needs. Cities were unloading untreated sewage water into the sea and rivers. By 1998, even after an investment program, only 83 per cent of the country had sewage collection. To achieve its target of more than 90 per cent coverage by 2010, Chile required more than US$4 billion in investment, but the government-owned water companies had neither the expertise nor the capital to meet this target. This led to the introduction of a privatization strategy to revamp the water industry in the country.
At Ontario Teachers', we are focused on delivering steady returns while leaving a lasting positive impact on the communities we serve. So, when we reviewed the Chilean water utilities investment, we looked past the significant capital needed and took a long-term view: create a safe and predictable investment for our members and improve the lives of millions of Chileans.
Amid the devastation caused by the 2010 earthquake, a long history of operational challenges and a historic drought, we have invested over US$2.3 billion. Our efforts have ranged from renovations and modernization of the existing infrastructure, to innovation, to introducing a governance model founded on continuous improvement. At approximately 100 per cent coverage, Chile is now a global leader in sewage treatment in urban settings while maintaining some of the lowest water tariffs in the world for this level of service, comparable today to North America or Europe.
Through our partnership with the Chilean government, we have not only improved the financial wellbeing of our members, we have improved the health of Chileans too. It’s a refreshing approach to investing in a better future for all.
How we’re investing to make a mark
- Provided access to safe drinking water for 5.5 million Chileans
- Grew coverage levels for potable water, sewage collection and treatment to 100 per cent in urban areas
- Reduced the incidence of disease linked to poor sewage treatment, such as shigellosis and typhoid
- Created thousands of high-quality jobs for citizens across Chile
- Improved efficiencies and reduced leakage losses that continues to help Chile withstand a persistent drought
- Established Chile as a global leader in urban sewage treatment coverage
“The water industry needs a long-term view and the capacity and patience to plan and execute intensive capital programs to respond to future challenges. Being a partner of Ontario Teachers' in this kind of business is optimal – their infrastructure expertise and track record are hard to match in the world and they leverage their global perspective to consistently add value and share expertise, without imposing their will.”
“As CEO, it is a privilege to manage a company where the purpose and the many future challenges of the industry are linked with the philosophy and principles of its shareholder, deeply aligned to environmental, social, and economic sustainability, improving people's quality of life”
Jose Luis Murillo, CEO
Esval and Aguas del Valle