Gulf sovereign fund and private equity back NanoH2O's expansion in desalination tech

Based on what I read, Seoul-based desalination membrane producer NanoH2O , which used to be part of LG Chem Water Solutions , has wrapped up a new investment round. This round was led by South Korean private equity firm Glenwood Private Equity and the Abu Dhabi sovereign fund Mubadala Investment Company. The companies said in a joint statement that all the necessary regulatory approvals and closing requirements have been met, and this move effectively makes NanoH2O an independent entity focused solely on reverse osmosis (RO) membranes for seawater and brackish water desalination.

NanoH2O, which started out as LG Chem’s water treatment division back in 2014, supplies RO membranes that are used in big-scale desalination projects. Industry data shows that RO systems tend to be more energy-efficient compared to thermal desalination methods, making them pretty handy when it comes to decarbonisation and ensuring water security. Interestingly enough, the company gets over 95% of its revenue from overseas clients, mainly municipalities and industrial users, so, it’s quite a global player.

Glenwood PE’s CEO, Lee Sang-ho, described the deal as pretty typical of their overall strategy. “This investment really showcases our philosophy of unlocking value by carving out non-core or less-critical parts of large corporations,” he said in the initial announcement. As per that statement, Glenwood plans to work alongside Mubadala and other investors to help scale NanoH2O’s sustainable solutions and expand its international footprint.

Mohamed Albadr, Mubadala’s head of Asia, mentioned that the investment fits with the Saudi sovereign fund’s focus on long-term partnerships tackling global issues. “We’re highly confident in NanoH2O’s technology and its potential for long-term growth,” he stated. Abdulla Mohamed Shadid, who heads Mubadala’s energy and sustainability division, highlighted how RO membranes play a vital role in both water security and cutting carbon emissions. “Reverse osmosis membranes enable large-scale water supply in a pretty energy-efficient way,” he noted, adding that NanoH2O’s proven tech and its focus on replacement-driven revenue give it a competitive edge.

For professionals involved in climate tech in the UAE, this deal sends a couple of clear signals. First, it reflects ongoing investment by Gulf sovereigns into specialized water tech. Mubadala, which has a diverse portfolio covering energy, aerospace, healthcare, and tech, is increasingly emphasizing sustainability and industry partnerships. The investment, then, serves a dual purpose: not just to get exposure to a vital technology but also to bolster regional resilience by adopting proven desalination solutions.

Second, it highlights a shift from thermal to membrane-based desalination in many new projects. RO systems generally burn less energy per cubic meter of water compared to methods like multi-stage flash or multi-effect distillation. As decarbonisation efforts advance across the Gulf and MENA regions, pairing RO with cleaner energy sources could significantly lower the lifecycle emissions from producing water. Industry experts point out that the performance, durability, and resistance to fouling of membranes remain crucial factors affecting project economics. NanoH2O’s focus on replacement demand and its global network position it well to benefit from both new installations and aftermarket sales.

Third, using a carve-out approach like Glenwood’s shows how private equity can speed up industrial spin-offs. Glenwood’s experience involves acquiring solid but non-core parts from large firms, then restructuring operations and expanding into new markets. According to their public profile, Glenwood typically targets businesses with clear potential for improvement and international growth. For technology vendors and engineering firms operating in the UAE, this could mean more options for sourcing membranes and aftermarket services from a company supported by long-term capital.

There are also practical implications for project developers and policymakers. The fact that Mubadala backs a membrane maker might make it easier to access technology and financing for desalination projects in the MENA region. Governments eager to accelerate low-carbon water supply solutions could find it more appealing to work with investors and suppliers willing to collaborate on integrated projects that combine RO, renewables, and energy efficiency upgrades. However, industry players should also keep an eye on the usual transition risks, membrane companies need ongoing R&D to lower energy use and improve lifespan, especially under harsh water conditions.

According to NanoH2O’s own materials, the company is still heavily investing in membrane innovation and expanding its global service capacity. Its base in Seoul and its international distribution channels remain key assets. This transaction is seen as a step toward scaling both their technology deployment and aftermarket support, especially in important markets like the Middle East and North Africa.

All in all, this partnership between Glenwood and Mubadala strengthens NanoH2O’s position as a key player in the RO membrane space, owned now by investors with regional and operational ambitions. The deal aligns funding, technology, and market access at a time when the UAE and nearby countries are pushing to develop more resilient, lower-carbon water supplies. Moving forward, climate tech stakeholders and project sponsors in the region should keep an eye on how NanoH2O’s technology, pricing, and service offerings evolve to meet the growing demand for desalination.

Source: Noah Wire Services