Water is an essential resource for life. Therefore, having a good water supply and sanitation system helps improve living conditions and societal development. In Latin America and the Caribbean, nearly a third of the world's water resources are available, crucial for the growth and functioning of other sectors such as agriculture, industry, or energy.

IDB Invest and NTT Data have conducted a research series to provide findings, insights, and recommendations on how new technologies are transforming different industries and how access to new tools is crucial to closing the digital gap in the region.

As part of that series, the study "How New Technologies Are Transforming Water Supply and Sanitation in Latin America and the Caribbean" shows that advancements like Artificial Intelligence or Automation synergize with others, such as Big Data or the Internet of Things (IoT), creating a multiplier effect in value generation.

In this sense, the support of both the public and private sectors through collaborations becomes indispensable. In recent years, there has been an increase in these Public-Private Partnerships (PPPs), bringing significant benefits to water and sanitation:

1. improvement in management and efficiency,
2. enhancement of service coverage and quality, and
3. increased reach, reaching more areas.

On the other hand, the private sector utilizes new technologies to contribute to greater management efficiency, using IoT devices for data capture, employing drones to monitor water levels or vegetation recognition, and utilizing Artificial Intelligence and Big Data models for analysis to enhance decision-making by managers and identify and prevent risks.

Moreover, it possesses the capabilities and know-how to use new tools and techniques, staying updated on sector trends and innovative solutions (e.g., using BIM methodologies to develop water asset projects).

Another critical example is the use of Geographic Information System (GIS) technologies as a basis for managing networks, water abstraction, discharge points, and asset and work order management.

BID Invest is supporting such initiatives, for example, by granting a $50 million credit line to Consorcio Anillo Hidráulico, a joint venture between subsidiaries of Ortiz Construcciones y Proyectos, S.A. ("Grupo Ortiz"), to finance the execution of civil works aimed at improving Panama City's drinking water system, including the expansion and rehabilitation of the North Panama aqueduct under a construction contract with the National Council for Sustainable Development.

Another example is the long-term loan package of approximately US$300 million from BID Invest to Águas do Rio concessionaires to strengthen water and sanitation services in Rio de Janeiro State, Brazil. The project will provide a better potable water supply with reduced losses and wastewater collection and treatment services.

The application of technologies to make the value chain more efficient is another digital accelerator. From water abstraction to its return to the natural environment after use and treatment, digital solutions are helping manage water use more effectively.

Another example is solutions that automate drinking water, desalination, and wastewater treatment plants using advanced analytics models to improve water quality and reduce energy consumption.

New technologies also ultimately benefit end-users. Citizens have more water usage and quality data, with resources such as smart water meters enabling remote reading of counters. Other technologies, such as pulse meters, allow households to have a greater awareness of water consumption, encouraging sustainable use and resulting in significant savings on bills.

All these advances, combined with the increased global demand for water due to population growth and business development, are attracting the interest of investment funds. In this scenario, investment in water and sanitation has been one of the focuses incorporated by asset managers in their product catalogs, receiving large amounts of capital.

Two ideas support this increased investment appetite: solving challenges related to resource scarcity and societal concern for the environment (encouraging investments in companies pursuing sustainable objectives).

Opportunities abound. There is a wide range of companies dedicated to water, from those with a technological focus on finding scarcity-solving solutions to others focused on supply and distribution.

The joint work between the public and private sectors, combined with investment in modern and efficient infrastructures that integrate innovative technologies, can make a difference, ensuring a future where all people have equitable access to clean water and adequate sanitation services, essential for the well-being of communities and the economic development of countries.