ETFS In Financing of Water Desalination Plants

Abstract

http://doi.org/10.5281/zenodo.4294835

Water scarcity has become a global priority, and to ensure its sufficiency and timeliness, it requires strong investments in hydraulic infrastructure that allow safe drinking water to the population. The mechanisms and methodologies for making responsible investments draw the attention of public and private companies that seek to place their capital in socially committed and environmentally sustainable investments. In this context, the main objective of this research seeks to compare the profitability of financial instruments known as ETF bonds against traditional financing schemes or mostly used, such as bank credit or the placement of shares and, in the case of investments of Governments, the use of fiscal resources. The study was based on the Los Cabos B.C.S. desalination plant, whose infrastructure is developed and operational, with a public-private partnership. The results showed that ETF bonds are viable instruments to finance this type of project, since they offered a lower financing cost than other sources of investment analyzed in a comparative way.