It's not the friendliest time for an initial public offering, but two cleantech firms plan to give it a shot, with Germany's RWE pushing its sale of American Water Works back on the market, and San Leandro, Calif.-based Energy Recovery also trying its hand at a share sale.

RWE, one of Germany's top power companies, is exiting its water activities and hopes to raise as much as $1.9 billion through an offering of American Water Works on the New York Stock Exchange.

San Leandro, Calif.-based Energy Recovery, which makes energy recovery devices for the water desalination industry, is aiming pull in up to $175 million.

Last November, unfavorable market conditions caused RWE, Germany's largest power producer, to pull its sale of American Water Works, a Voorhees, N.J.-based water utility and wastewater treatment company (see American Water IPO put on the backburner).

But things aren't necessarily any better now.

In the first quarter of this year, Standard & Poor's 500-stock index dropped 9.92 percent, and the Nasdaq fell 14.07 percent, while the Dow Jones industrial average tumbled 7.55 percent.

Last month, Ralston, Iowa-based Renewable Energy Group withdrew its plans for a $150 million IPO, becoming the second biodiesel producer of the year to pull out of a share sale (see Renewable Energy Group cancels IPO).

The company cited market conditions as the reason for the withdrawal.

In January, Seattle's Imperium Renewables canceled plans for a $345 million share sale (see Imperium Renewables puts IPO on hold).

RWE plans to offer 64 million shares of American Water Works at $24 to $26 each, with the underwriters getting an option to buy up to 9.6 million additional shares.

Goldman Sachs, Citigroup and Merrill Lynch were named as joint book runners on the deal, set to float on the NYSE under the symbol AWK.

All of the cash from the IPO will be going to RWE, so American Water Works is planning a concurrent offering of $500 million of equity units.

American Water has said it plans to use a portion of the proceeds from the equity offering to repay recent commercial paper borrowings and for general corporate purposes.

California's Energy Recovery is heading for the Nasdaq with its share sale, planning to list under the ticker ERII.

Citigroup and Credit Suisse are listed as the lead underwriters on Energy Recovery's offering, but terms of the share sale have not been disclosed.

Founded in 1992 and backed by two Norwegian investment groups, Energy Recovery said it pulled in $35 million in revenue in 2007.

Norway's Arvarius holds 28.9 percent of Energy Recovery, with Caprice, also based in Norway, holding 11.3 percent.

Energy Recovery said it primarily operates in the sea water reverse osmosis, or SWRO, sector.

The company said its PX Pressure Exchanger helps optimize the energy intensive SWRO process by recapturing and recycling up to 98 percent of the energy in the high pressure reject stream.

In its filing with the U.S. Securities and Exchange Commission, Energy Recovery said its pressure exchanger reduces SWRO energy consumption "by an estimated 60 percent as compared to the same process without any energy recovery devices."

The PX device has been installed in over 300 desalination plants, according to the company.

Energy Recovery plans to use proceeds from its IPO for working capital and general corporate purposes.

American Water Works and Energy Recovery may be hoping to ride a potential boost in interest in the sector. Industry watchers have said a new wave of innovation is likely to return good profits over the next few years (see Cash flowing in the water industry).

In a Cleantech.com webinar last November, David Henderson, managing director of Toronto's XPV Capital, said water scarcity and security would be big issues.

Energy Recovery pointed out in its filing that a study conducted by the International Water Management Institute projects that by 2025, 33 percent of the population of the developing world will face severe water shortages.

The timing of the offerings from American Water Works and Energy Recovery has not been disclosed, but there have been reports that American Water Works could start trading as early as this month.