Investing in the Future of Water: A Conversation with Usha Rao-Monari

Usha Rao-Monari | Partner, Wellers Impact

Interview by Elena Forghieri

As water scarcity intensifies globally, innovative infrastructure models are becoming essential. In this Q&A, Usha Rao-Monari, Senior Partner at Wellers Impact, discusses why the Water Unite Impact fund invested in Flocean, how she defines water security, and what the future of water innovation requires.

What first drew you and the Wellers Impact team to Flocean? What made their model stand out?

I first came across Flocean when I met their CEO at a conference. What immediately caught my attention was not just the technology itself, but the model they were proposing: decentralized, modular subsea desalination. That’s very different from the dominant paradigm in desalination today, which is built around very large, centralized plants.

Traditional desalination has three big challenges. First, it’s extremely capital intensive, meaning you need huge upfront investments for large plants and associated infrastructure. Second, it is expensive to run and therefore often only viable in certain contexts or for certain off-takers. Third, and very importantly, it is frequently seen as environmentally destructive, largely because of the brine management issues tied to big centralized systems.

Flocean, in contrast, is putting forward something I would describe as an infrastructure model of tomorrow. Their units are subsea, modular and decentralized. That means you’re not tied to a single massive plant in one location. You can add modules over time, scale up or down as needed, and deploy systems in multiple places along a coastline or across regions. This kind of flexibility is critical when you are thinking about how to design infrastructure for a world in which water scarcity, climate variability and local conditions are changing.

In addition, by placing desalination systems 400–600 meters below the ocean surface, the technology harnesses natural water pressure to significantly reduce both costs and deployment time. This approach delivers a 50% reduction in energy consumption, requires 95% less coastal land use, and eliminates toxic brine discharge.

Now, we still need to see how far this model can be scaled and replicated globally, and that is part of what we are investing in. But if it does scale, I believe it has the potential to transform the desalination sector, not just by providing new water sources but by redefining what desalination infrastructure can look like and how it interacts with local economies and ecosystems.

How do you personally define water security, and where do you see impact investors playing the most meaningful role across the water cycle?

In my opinion, water security is actually a very simple concept, even though it is often described in complex terms. It is about whether I, you, and everyone else can access clean, fresh water whenever we need it and wherever we need it. The moment either of those conditions is constrained; if the water is not available where you are, or if it’s available but not clean, or if it’s available only intermittently, you’re already dealing with some form of water insecurity.

That can show up in different ways. You can have countries or regions with a lot of water on paper, but it’s locked away, inaccessible, or badly distributed. You can have places where water is accessible but polluted, and therefore unsafe. Water security is really a catch-all phrase for that very basic human and planetary requirement: having usable water, in the right place, at the right time, and in the right quality.

Historically, impact investing in water has focused quite narrowly on access: getting clean drinking water and basic sanitation to communities that lack it. That has been, and remains, absolutely vital. We still have around a billion people without safe drinking water. But that’s only one part of the story.

What’s starting to happen now, and what we at Wellers are very committed to, is a shift to looking at the entire hydrological cycle. That means thinking not just about access, but about scarcity, water creation and production, distribution, treatment, reuse and circularity. It’s about asking: how do we manage water as a system and as a resource under pressure, not only as a service?

Impact capital can and should increasingly support new technologies and new business models that directly address the limitations on water availability. Without that, the demand trajectory, which is driven by population, urbanization, agriculture, and industry, is going to outstrip foreseeable supply nearly everywhere. Unless we bring new models, like Flocean’s, into the picture, both people and the planet will be increasingly exposed to water stress and insecurity.

Where does desalination fit into that bigger picture of water scarcity, and what makes Flocean’s model different from other desalination players?

We’re in a critical window as we move towards 2030, with the Sustainable Development Goals as one reference point. If we continue to rely on yesterday’s ‘business as usual’ models in water, we simply won’t meet the needs of a very different future reality. Desalination has to be part of the toolbox, but how we do desalination matters enormously.

What Flocean is doing is offering a new infrastructure model for desalination, not just a marginal technological improvement. By going subsea, modular and decentralized, they remove a lot of the constraints of large-scale plants. You’re not forced into huge upfront capex in one location; instead, you deploy and grow in a phased way.

This can be particularly powerful in regions that don’t have the physical space, governance structures or grid infrastructure for big traditional plants. Flocean’s model offers a way to create new water sources in a more distributed, adaptive manner and if designed correctly, with a lower environmental footprint, especially in relation to brine management.

If the model proves itself in a variety of settings across different geographies, economies and regulatory environments it could become a major contributor to addressing water scarcity globally. That’s what excites us: it’s not just another project; it’s a potential platform for a new way of doing desalination.

What kind of technical assistance will Wellers Impact provide alongside the investment in Flocean, and more broadly, how do you see the role of post-investment support in impact investing?

I am not someone who believes that every impact investment automatically requires technical assistance. However, I do think that any investment, and particularly impact investments, can benefit enormously from well-designed post-investment support. That support can do two key things: enhance the value of the investment and mitigate risks that might not be fully visible at the outset.

In Flocean’s case, the company is, at its core, a technology innovator. They have developed a new technological approach and the beginnings of a compelling business model. But desalination is not just about technology in a lab or even under the water; it sits inside a much larger infrastructure ecosystem. That includes off-takers, political and regulatory risk, financing structures, connecting to existing water grids, long-term contracts, and engagement with local communities.

This is precisely where Wellers can add real value. We understand infrastructure development and finance, especially in complex markets, and that experience becomes crucial once Flocean begins expanding into new regions, particularly in the Global South. Installing a subsea unit is only the first step; the more challenging work happens afterward. Flocean needs to determine how the water produced will integrate into existing distribution systems, which may require navigating fragmented or outdated infrastructure. They must also identify who the off-takers will be and negotiate contracts that clearly define volumes, pricing structures, responsibilities and payment terms. Ensuring reliable revenue collection is essential, as is establishing mechanisms that guarantee the company can actually recover its investment. At the same time, they must engage local communities in a meaningful way so that the project is understood, accepted and aligned with local needs.

All of this takes place against a backdrop of political and regulatory uncertainty, which must be managed thoughtfully throughout the life of the project. Elements like infrastructure integration, off-take agreements, financial structure, community engagement and political risk are often what determine whether an infrastructure project succeeds or fails. Our role is to help Flocean bridge the gap between being a technology innovator and becoming a fully integrated, bankable and socially grounded infrastructure provider.

As global demand for climate-resilient water solutions intensifies, how is Wellers Impact evolving its strategy and thesis in the water sector?

Our thesis at Wellers is quite distinctive in the water investing world. First, we refuse to take the focus off access, that remains non-negotiable. At the same time, we put equal emphasis on scarcity, which is often neglected. You can’t only work on getting more people connected to water today if the resource base itself is under severe strain for tomorrow.

Second, we work across the entire hydrological cycle. We’re not just focused on drinking water systems or WASH (Water, Sanitation & Hygiene). We’re looking at production, storage, distribution, treatment, reuse, and the way water interacts with agriculture, industry and urbanization.

Third, we deliberately connect water to circularity and waste management. Why? Because if you don’t manage waste, whether plastics or other forms, it inevitably ends up in rivers, lakes and oceans. You can’t separate water security from pollution and waste; they’re two sides of the same coin.

Going forward, we see ourselves increasingly involved in new infrastructure models like Flocean, but also new distribution models, new production models, new off-take arrangements and new financial structures. That includes what I would call ‘blended finance 2.0’ which has more sophisticated ways of combining public, private and concessional capital to de-risk innovation and scale solutions.

The water sector is still one of the least evolved infrastructure spaces. Our ambition is to help change that by demonstrating, through concrete deals and platforms, that water can be both investable and transformative from an impact perspective.

The water sector is often described as lagging far behind sectors like energy in innovation, finance and policy. Why do you think that is, and what needs to change?

There are many reasons why water lags, and no single explanation is sufficient. A big part of it is perception. For a long time, water was considered almost infinite. It was something that was just there, you turned on the tap, and it came out. That sense of abundance meant that we didn’t build the same level of innovation, pricing discipline or investment frameworks around water as we did around, say, energy.

Then there is the idea of water as a fundamental human right. I agree with that framing, but it has also led to a belief in many places that you cannot, or should not, attach an economic value to water or to the services that deliver it. The result is that in most countries, raw water is not priced at all, and the water that is distributed through public systems is often heavily underpriced.

Historically, water has also been delivered predominantly by the public sector. It has been seen as a public service, financed by public budgets. When water utilities try to raise tariffs to cover the true costs of providing the service, including energy, maintenance, renewal and expansion, they often face strong public resistance. At the same time, people are paying multiples of that price for bottled water or tanker deliveries.

So we end up with this paradox: households might pay a lot more for private, ad hoc solutions when the public system fails, yet they protest if the public tariff rises even modestly to make that system financially sustainable. That contradiction is at the heart of why water has been so slow to evolve.

Water is also an inherently complex sector: it is financial and economic, because infrastructure is expensive; it is technological, because you need innovation in treatment, monitoring and distribution; and it is social and political, because it touches fundamental rights, equity and public trust. That combination makes decision-making slow and risk-averse.

What needs to change is the narrative and the models. We need to show that it is possible to generate reasonable returns in water, comparable to other infrastructure sectors, while delivering very high levels of social and environmental impact. That’s part of what we at Wellers Impact are trying to do: to demonstrate, through actual investments, that water does not have to be the poor cousin of energy or transport, but can be a vibrant, investable and impactful sector in its own right.

What are Flocean’s short-term and long-term objectives from your perspective, and what would success ultimately look like?

In the short term, Flocean needs to prove the model in the real world across a range of contexts. That means developing multiple use cases in different geographies and economic situations, both in the Global North and the Global South, and in places with different coastal, geological and regulatory conditions.

They also need to develop a complete delivery model. It is not enough to have a unit working under the water. You need to connect that unit into existing distribution systems, or in some cases build new distribution pathways. You need viable off-takers, clear pricing structures, contracts that ensure revenue flows back to the company, and mechanisms that manage operational and political risk. Short-term success will be about demonstrating that this entire chain, from subsea technology to a tap or industrial user, works smoothly in practice.

In the longer term, the vision we share with Flocean is to scale the company in a phased, strategic manner across multiple countries. That doesn’t mean expanding everywhere at once. It means being thoughtful about which countries and markets offer the best initial conditions for success, whether that’s in terms of regulatory openness, demand patterns, or coastal conditions, and building from there.

If, over time, Flocean can prove that its model works on pricing, on infrastructure integration, on environmental performance and on technology reliability, then I can see it becoming one of the seminal water infrastructure providers globally. That, to me, would be real success: a company that not only thrives commercially but also fundamentally shifts how we think about desalination and, more broadly, about water infrastructure for a water-scarce world. If this model works at scale, it could be genuinely transformative for the sector.