Context and investment rationale
In 2020, we established our water infrastructure platform, Vital Capital Environment (VCE). VCE invests in and develops water-related environmental infrastructure projects in growth markets. Its core activities are focused on leveraging advanced technologies and environmental solutions for potable water provision, irrigation infrastructure and wastewater treatment.
Today, 600 million Indians face high to extreme water stress, while the country’s wastewater treatment capacity stands at 30% of total generation. With high demand for water solutions, large-scale investment and quality deployment, VCE built a management team with over 30 years’ experience in India.
VCE’s investment thesis was to establish a platform that would be able to navigate on both EPC and development projects, thanks to its strong in-house engineering capabilities, management’s track record and the financial resources of Vital Capital’s initial commitment.
In establishing the platform we first focused on building VCE’s internal processes and its team across four key areas: i) general management, including ESG and impact monitoring and management, ii) engineering and proposals, iii) business development and iv) administration. Critical to the overall process was ensuring VCE’s team remains strongly aligned with Vital Capital and therefore, a substantial amount of time was spent on strategy definition.
In 2021 VCE’s technical and financial expertise was leveraged to facilitate the takeover of a large-scale drip irrigation project serving a 12,000ha drought-prone agricultural region. The project will deliver impact at scale, benefiting 12,150 farmers across 28 villages, increasing their yields and subsequently improving food security, reducing poverty and stabilizing incomes. Additional impactful projects are in VCE’s pipeline with plans to commit over $100M in the near future.
In less than 12 months, our water infrastructure platform became a serious player in the Indian water ecosystem. VCE fostered partnerships with tier-1 providers with a strong backlog of projects, which will deliver strong financial returns and significant, widespread impact.