STAX Inc., a global strategy consulting firm, has been working in collaboration with International Enterprise Singapore (IE) for over two years to inform Singaporean companies and investors on investment opportunities in Sri Lanka. IE is a statutory board under Singapore’s Ministry of Trade & Industry that facilitates the overseas growth of Singaporean companies and promotes international trade.
Given this liaison with IE, STAX has presented regularly to business communities in Singapore on the macro-economic landscape and investment opportunities in Sri Lanka. STAX was recently invited by IE and the Singapore Water Association (SWA) to present an overview of the opportunities in Sri Lanka’s water sector. “The presentation provides potential investors with a comprehensive view of the required investments relating to the water sector in Sri Lanka,” says Dr. Kumudu Gunasekera, a Director at STAX.
Sri Lanka has an ample water supply with 52.8 billion cubic meters (BCM) of surface, ground, and overlap between surface and groundwater. The country’s water consumption in 2013 was 16 BCM and is set to reach 20 BCM by 2018. Of the 120 BCM of annual rainfall received, only about 36% is available for use due to run-offs in the river system and lack of dam capacity. Over 64% of annual rainfall is currently non-utilisable because of insufficient catchment capacity. Other reasons for loss of water include infiltration and seepage, evaporation, and ground water recharge.
Despite the ample rainfall and the broad supply of water resources available to the populace, dry zones in the island are expected to face absolute water scarcity by 2025, largely owing to the forecasted increase in water-intensive paddy cultivation. The situation is exacerbated by poor adoption of water saving techniques and technological advancements; high losses associated with storage, distribution, and on-farm utilisation of water; and lack of incentives for conservation due to free state supply of water for irrigation.
The other reasons for the impending crisis include the regional differences in the distribution of usable water, as the Wet Zone (Central and South West districts) occupy 25% of the country’s area but have 70% of the water resources, while the Dry Zone (North and East) occupies more than half the land area but claims only 30% of the water resources and more than 80% of the water demand. Furthermore, climate change is expected to aggravate water scarcity in future. This is evident in the increasingly unpredictable and debilitating droughts and floods that Sri Lanka has recently witnessed – both of which can lead to shortages of clean water. Pollution of water sources too plays a key role in reducing the water available for agriculture as well as domestic use.
Hence, there is an increasing need for efficient water management to ensure sufficient water availability for all consumption sectors. While many efforts have been taken by the government and the private sector, more investment is needed to implement schemes to adequately prepare for the upcoming crisis. These include efforts for water conservation (particularly in the agriculture sector)—such as high-tech irrigation and precision agriculture—as well as better techniques for water catchment, treatment and most importantly distribution. “Our team at STAX is committed to not only researching the global best practices in these areas, but also to harnessing investment potential to bring those much-needed best practices to Sri Lanka,” added Dr. Gunasekera.
STAX, Sri Lanka’s leading strategy consulting firm, has its headquarters in Boston, and branch offices across Chicago, New York, Colombo and Singapore. For over 20 years, Stax has been advising 15 of Top 20 global Private Equity investors and 25+ Fortune 500 companies. Since inception, we have delivered over 2,500+ client engagements, across diverse industries covering 40+ international markets. With a growing client base in Sri Lanka, including diversified conglomerates, blue chip industry leaders and large family businesses, Stax inspires organisations to dream big, think outside the box and compliment gut-based decisions with fact based research. If you are looking for a strategic partner to help grow your organisation, we invite you to find out more at www.stax.com