Australia's worst drought for 100 years will provide a host of money making opportunities for financiers, infrastructure managers, and contractors, according to a recent report from investment bank Citigroup.

The report said Federal and State governments' belated attempts to solve Australia's water crisis will result in billions of dollars worth of spending.

This will force them to use capital more efficiently in order to fund the operational and capital expenditure programs required, which in turn will benefit manufacturers and fund managers alike.

"Australia has been slow to adjust to the longer term impact of climate change, with both State and Federal Governments only providing a notable lift in water industry capital expenditure during the past couple of years," the report said

However, momentum is shifting quickly.

Citigroup highlighted the Federal Government's announcement last month that it would spend $11billion to improve water use efficiency and the Queensland state government's planned $7 billion splurge on water infrastructure.

It said following countries such as the United Kingdom down the privatisation road would improve efficiency and provide good business for fund managers.

"In the UK around 80 per cent per cent of the efficiencies extracted out of the privatised water industry were passed on to consumers, with the remaining 20 per cent going to the private sector asset manager," the report said.

It also said state governments' could issue debt to fund specific projects.

Companies that could potentially profit from attempts to improve water efficiency, according to Citigroup, include heavy engineering firm Leighton Holdings, construction giant Multiplex, project manager Transfield Services, engineer Downer EDI and water technology companies like Waterco, Crane Group, GUD Holding, GWA international and Nylex. The report said Bluescope Steel could also benefit through its manufacture of rainwater tanks.