Israel’s Water Technology and Industry Roots, Growth, Sustainability

1. Israel’s Water Technology and Industry Roots, Growth, Sustainability Mexico City 17 September 2014 Raanan Adin IPN Representation in Israel CEO, Adin Holdings, Israel radin@ipn.mx; raanan.adin@adinholdings.com

2. Outline • Introduction • Roots of Israel’s water industry • Innovation and start-ups • Conclusions

3. Israel • Area: 22,000 sq. km. • Population: 8 million (2013) Source: Google Maps, http://maps.google.com

4. Population growth 9,000 8,107 2013 = 1948 x 8.8 Mexico: x 4.8 (25m119m 217m) 919 0 1948 2013 Sources: Central Bureau of Statistics, Israel, http://www.cbs.gov.il; Mexico: http://www3.inegi.org.mx/Sistemas/temas/Default.aspx?s=est&c=17484

5. Initial Technology Drivers The need for survival resulted in rapid growth: Military Industry Agriculture Hi-Tech Medical Equipment Biotechnology Water

6. Trade Challenges • Trade destinations in a distance: Require being more attractive and more effective. Export from Israel in 2012 Europe 34% N. America 30% Mexico 0.7% Asia 25% Africa 2% S. America 3% Oceania 1% Others 5% Source: Central Bureau of Statistics, Israel, http://www.cbs.gov.il

7. Yearly precipitation (mm) Average 1981-2010 WaterBalance (1) • Climate Yearly precipitation (mm) Average 1941-2000 Source: Israel Meteorological Service http://www.ims.gov.il/ Source: http://mapasdemexico.org/maps/rain.html

8. Water Balance (2) Other 60 Regional support 143 Industry 120 Agriculture 1,044 Urban 764 MCM - Million Cubic Meters Source: Israel Water Authority - Water Sector Master Plan v4 Water balance (MCM/y @ 2010): Fresh water resources available - 1,200 Demand - 2,131 Deficit - 44%

9. Israel’s Major Water Works Water Resources Lake Kinneret Tel Aviv • 40% Ground water • 20% Surface - Lake Kinneret • 20% Reuse 450  500 • 20% Desalination 430  750 Milestones: • National water carrier: 1964 • Shafdan WWTP: 1969 • Ashkelon desalination plant: 2005 Jerusalem Dead Sea Israel’s Major Water Works Black: Water Red: Reuse

10. Water Reuse in Industry • Challenges: • Water quality requirements are high • Treatment of industrial pollutants is difficult • Drivers: • Regulation+enforcement: Discharge quality restrictions; Tight quotas • Cost: Fresh water consumption; Wastewater discharge • Solutions: • Flow source separation • Equalization tanks • Match the right technology • Ex.: Intel Israel, Kiryat Gat factory reuse over 50%. Goal: 80% • Government support: Loans for establishing reuse systems Source: Israel Water Authority - Water Sector Master Plan v4

11. Main State Institutions Ministry of Energy and Water - Legislator National Water Authority - Regulation, Pricing, Supervision Ministry of Health - Water Quality - Legislator, Regulation Ministry of Environmental Protection - Pollution Control Ministry of Agriculture - Regulator, Legislator Mekorot National Water Company - Water supply Municipal water authorities - Distribution to consumers Ministry of Economy - Water industry

12. Israel’s Water Industry Main segments • Irrigation • Treatment • Management • Flow control • Security and safety • Consulting, design offices Challenge: Develop locally, operate globally

13. Innovation and Technology Evolution paths: • Universities research -> Incubator -> Private investor-> Productization • "Back yard" -> Incubator -> Private investor -> Productization • Industry in-house development

14. Innovation and Technology Evolution paths: • Universities research -> Incubator -> Private investor-> Productization • "Back yard" -> Incubator -> Private investor -> Productization • Industry in-house development The gaps are hard to cross . . .

15. Nurturing Innovation • Knowledge and research • Capacity building • R&D encouragement • Leveraging the local market and infrastructure • Helping global expansion NEWTECH - National program aimed at promoting Israel’s water and sustainable energy sectors • Under the Ministry of Economy • “First round” for start-ups: 2006

16. R&D Encouragement • Office of the Chief Scientist tools to assist new technological initiatives: • Tnufa - EUR 40,000 grant • Incubators - EUR 700,000 investment/2 years • Support of research institutions • Magnet - Collaborative R&D in Industry • ISERD - EU R&D programs support (Ex.: HORIZON2020) • Numerous bi-lateral agreements

17. Leveraging the Local Market • Implementation of new water technologies with: • Local water utilities • Mekorot National Water Company • Openness in the private sector to support startups and allow beta and pilot testing

18. Helping Global Expansion • Utilize commercial attaches’ network abroad • Sign joint ventures with international partners & institutes • Funding for marketing efforts • Leverage standardization; Active participation of IIS in ISO • Participation in international events • Promote local conferences • Government guaranteed insurancefor oversees project

19. WATEC Exhibition & Conference • Bi-Yearly water industry promotion event • 150 exhibitors, including Israel’s leading companies, startups, institutions and several international companies • Delegations from over 100 countries, including ministers, investors and procurement officers http://www.watec-israel.com/

20. Private Incubators (1) • Kinrot Ventures • Founded in 1993; Privatized in 2006 • Main operation model: PPP - Private-Public-Partnership combining the owners and Chief Scientist incubator program • Portfolio: 14 companies, 10 in water: • TA Count - Near real time sensor for detection of reproducible microorganisms • Diffusaire - Energy saving aeration technology • FiltofleX - Fine filtration flexible media • and more . . .

21. Private Incubators (2) • L.N. Green Technological Incubator • Operating almost 20 years • Established more than 70 companies • Focused on environment since 2007 • Portfolio: 9 companies, 3 in water: • JP AquaKnit - 3D flexible biomass carrier for WWT • AgRobotics - Anerobic process for high organic load • Accurate Watering - Sprinklers for irregular areas

22. Success Stories • Treatec 21 Industries • A.R.I. • Diffusaire • Applied CleanTech

23. Treatec 21 Industries • Sector: Wastewater treatment • 1996: Academic research at the Hebrew University in Jerusalem • 2000: IP registration by “Yissum” • 2002: Ashkelon incubator supportedby the Chief Scientist ofthe Ministry of Economy • 2004: Private investor - Solor • 2010: Merged into a public company, traded in Tel Aviv Stock Exchange - Yaad Industries

24. A.R.I. • Sector: Water metering • Challenge addressed: Low flow metering at homes • Collaboration with Jerusalem’s local water company (Hagihon) to install at “neighborhood scale” of 5,000 homes • Support budget: EUR 200,000 • Success boostedinternational sales !

25. Diffusaire • Sector: Aeration - Wastewater treatment • Challenge addressed: Reduce aeration energy cost • Collaboration with a municipal water company to install in their WWTP • Support budget: EUR 50,000 • Project started: 2012 • Success in reducing energy cost dramatically - Company ready for the next step - private investment

26. Applied CleanTech • Sector: Wastewater treatment • Challenge addressed: Reuse of solids • Newtech: Collaboration with a municipal water company; ACT decided to use private investment. • Support budget: None • Key issue: Newtech’s support brought the partners together

27. Conclusions • Motivation: Survival . . . • Focus = Dedicated program NEWTECH • Support from pure R&D to global expansion, Connecting the pieces of the puzzle • Private initiatives strengthened by state policy

28. WATER IS LIFE Raanan Adin; IPN Representation in Israel; radin@ipn.mx CEO; And Holdings; raanan.adin@adinholdings.com