Australian Water Investments Pty Ltd is no longer and they have been deregistered with ASIC. However, investing in water in Australia is still quite popular.
Investing in Water
There are a number of ways to do this. The easiest is to use a managed investment scheme. There are superannuation funds that do this too. The downside to this approach is there are fees paid to the managers and you have less control over the investment.
Investing directly in water is less complicated than you might think. You will need to buy permanent water shares. Each state uses different terminology, but if you mention permanent water to a water broker, they will know that this is what you mean.
Water licences have a share component and this is the share of your space in the storages. The share component is the thing you are investing in.
To get a water licence to put water shares on is relatively simple and free in South Australia and Victoria. In New South Wales, there is a cost involved. A water licence can be created when you buy the water shares. You don’t need to own land to own a water licence.
There are different types of water shares based on geography and priority. The water market is split into trading zones and each zone has it’s own type of water share. In Vic and NSW, irrigation water shares can have different priority. There are high security (NSW)/high reliability (Vic) shares and then there are general security (NSW)/low reliability (Vic).
Each water year (the same as the financial year in the Southern Murray-Darling Basin), the water shares get an allocation. This might be 100 % of their share component or something else. In a dry year, they will receive less than 100 %. High priority shares get more allocation than low priority and some geographic areas will get more than others.
A water investor can sell their allocation water to irrigators who need to use more allocation water than they have on their own licences. This is similar to leasing out property for the rest of the year, which is why it’s sometimes called “leasing” water.
The other way investors make money from investing in water is through the increase in value of their share components.
To invest in water or for any other water trades, please visit this water trading website run by Water Broking World.