Image: SIWI’s Executive Director Helena Thybell (l) and Meike van Ginneken (r), Water Envoy for teh Kindgom of the Netherlands
Introduction
On the 25th of August, the government of the Netherlands, together with the World Bank and the Stockholm International Water Institute (SIWI), convened a high level event dedicated to the financing of water resilience in preparation for the 2026 UN Water Conference. The topics covered during this event included the challenge of closing the current water finance gap for Sustainable Development Goal 6, current efforts towards mobilising blended finance, and ensuring that investments in water resilience align with the expected outcomes of the broader dialogue on investments in water.
In her opening statement. The Dutch Water Envoy, Ms. Meike van Ginneken, argued that in general, ensuring water finance depends first on establishing reliable revenue streams and well-functioning national systems. There are a number of such potential revenue streams, which take the form of tariffs, taxes, cross-subsidies, transfers or official development assistance, and for all of these, countries need to ensure that they “get their house in order”: instead of dreaming of a pot of gold at the end of a rainbow, one needs to understand that finance will generally follow if there are credible systems in place with predictable revenues.
Currently, global investment in water, she stated, remains far too low – averaging at some 0.4% of GDP worldwide, whereas by comparison, the Netherlands spends approximately 1% of GDP, which is the recommended level in order to ensure water services, water management and flood protection. Although this level of spending is not easy to achieve, she underlined that water services and water management are inherently costly, and this can be tackled with the right approach.
For example, existing public funding for water – which accounts for more than 91% of all spending on water – is not being used effectively. Research shows that on average, only about 70% of budgeted expenditure in the sector is actually spent, owing to the nature of annual expenditure cycles, procurement difficulties and other implementation obstacles. In other words, on average, around 30% of already-allocated public funding remains unspent.
Another challenge is that the existing spending is badly targeted: there is a lot of spending on capital infrastructure, but very little on operations and maintenance. The result of this pattern is a lot of infrastructure, but infrastructure that degrades rapidly.
These are formidable challenges, but a hopeful initiative in the context of the 2026 UN Water conference is the Water Forward initiative – the largest water financing initiative in a long time, whereby multilateral banks have collectively pledged to provide water services to 1 billion people (of which 400 million accounted for by the World Bank) – this implies a doubling or tripling of current investments in water. These multilateral banks are in essence publicly owned, with national governments as their shareholders, and alongside this public funding there is also increasingly private investment in water, even of this investment tends to be highly concentrated in areas such as wastewater treatment.
Accelerating SDG 6: the case of Uzbekistan
Speaking on behalf of Uzbekistan, Mr. Timur Butunbayev, Deputy Head of the Administration of the President of Uzbekistan, placed the country’s financing needs within the wider experience of water scarcity in Central Asia. Drawing on a Swedish proverb—“You don’t miss the cow until the stall is empty”—he offered an Uzbek equivalent: “You know the value of water when the well runs dry.” For Uzbekistan, he said, the tragedy of the Aral Sea had turned that wisdom into lived reality. The country had therefore come to World Water Week “not just to observe, but to act”.
Water is scarce in Central Asia: renewable water availability per person in Central Asia is approximately half the global average, Butunbayev stated, while at present, climate change is reducing river flows and intensifying extreme weather. Against this background, the government of President Shavkat Mirziyoyev has made water a strategic national priority. As a result, water sector expenditure is expected to reach 4.2% of the state budget by the end of 2026, while in the preceding period between 2017 and 2025, annual funding for water management increased almost fourfold, while investments in drinking-water supply increased tenfold.
Butunbayev stressed that the intention was that increased financing must produce institutional reforms, technological change and measurable results. Major reforms have been implemented: Uzbekistan has established a dedicated ministry, adopted a new Water Code and more than 100 regulations, and introduced a national water strategy extending to 2030. According to the government, more than 20 million people—over half the country’s population—have gained improved access to water-supply and sanitation services since 2017.
Reducing pressure on water resources is important in the context of water scarcity. Water -saving technologies now cover more than 60% of Uzbekistan’s irrigated land, with full coverage targeted by 2030. When the reforms began, the government faced constrained public finances, little domestic production of water-saving equipment and limited awareness among farmers and local water authorities of the value of the technologies. It responded with a combination of subsidies, loans, tax incentives, digital platforms and professional training. Butunbayev said this had helped expand domestic manufacturing from two companies to 64, increase local content from 10% to 80%, and train more than 5,000 specialists. A further 90,000 farmers and water professionals have received training through the country’s specialised water-training programme.
Taken together, these measures are already saving an estimated 11 billion cubic metres of water annually, according to Butunbayev. By 2030, Uzbekistan aims to increase annual savings to 15 billion cubic metres—equivalent to approximately one-quarter of its current water consumption. He also pointed to UN-Water figures indicating that the country’s water-stress level declined from 169% in 2017 to 122% in 2022, with a further reduction to 95% targeted by 2030.
However, Butunbayev cautioned that completing the modernisation of Uzbekistan’s water infrastructure would require financing at least six times higher than historical levels. Uzbekistan was consequently among the first 14 countries to join Water Forward, the World Bank Group initiative intended to improve water security for more than one billion people by 2030. The resulting Uzbekistan Water Compact, developed jointly with the World Bank, brings together policy reforms, investment and measurable targets.
By 2030, the Compact aims to extend water-saving technologies across all irrigated land, reduce irrigation losses by 25% and water-supply losses by 30%, achieve universal access to safe water and sanitation, and complete the digitalisation of the sector. Delivering these objectives is expected to require approximately US$10 billion between 2026 and 2030. Of this amount, US$3.9 billion has already been identified, leaving a financing gap of US$6.1 billion. The World Bank plans to mobilise US$500 million to help attract additional financing from other international financial institutions and investors.
Butunbayev presented this shortfall not only as a challenge, but also as an opportunity for investment and strategic partnership. Public financing, he argued, could not act alone. Approximately one-fifth of Uzbekistan’s pumping stations are already managed through public–private partnerships. The government is also working with the International Finance Corporation, other financial institutions and investors on a major project to modernise pumping stations and integrate solar generation and battery storage. This, he said, would improve operational efficiency while reducing pressure on the state budget.
Placing water at the centre of economic and climate investment
Following Butunbayev’s intervention, Dr Mohamed C.B.C. Diatta, Senegal’s Sherpa for the 2026 United Nations Water Conference, welcomed the decision to place financing at the centre of the discussion. Developing countries, he observed, face a substantial annual financing gap at a time when water systems are coming under increasing pressure from floods, droughts, scarcity and pollution. Therefore, he argued, responding effectively would require both greater investment and a more strategic approach to how available finance is used.
Dr. Diatta identified four priorities. First, he argued that water must move to the centre of economic and climate investment. “Water resilience is economic resilience, and water resilience is climate resilience,” he said. This relationship should be reflected in national and international budgets, development-finance decisions and climate-investment portfolios.
Second, Africa brings particular urgency to the financing debate. With only four years remaining until 2030, the continent requires approximately US$50 billion annually to meet its water-security and sanitation objectives, while current investment is estimated at only US$10–19 billion. This leaves an additional financing requirement of at least US$30 billion annually. Traditional sources of finance would not be sufficient to close the gap, Diatta said, particularly while many countries allocate only around 0.5% of GDP to water and sanitation.
Financing would therefore need to be diversified through blended finance, climate finance, guarantees and appropriate forms of private investment. However, attracting additional capital would also require African countries to develop stronger, investment-ready projects, supported by better preparation and credible institutions. More finance, in other words, would need to be accompanied by better projects and stronger partnerships if investment was to produce genuine water security.
This led to Dr. Diatta’s third priority: the creation of credible national investment pipelines. While international discussions often focus on the financing gap, he argued that equal attention must be paid to the “project-preparation gap”. Investors require clearly defined priorities, credible projects, reliable data, strong institutions, appropriate regulation and transparent allocations of risk. Governments must therefore invest in investment readiness by preparing projects and assembling coherent pipelines. Multilateral development banks and development partners, meanwhile, should support project preparation through guarantees, concessional resources and blended-finance instruments. Diatta cited the African Water Facility of the African Development Bank as one institution already performing this role. The objective, he said, should be to use limited public finance to unlock much larger pools of capital.
Senegal is seeking to put this approach into practice through its National Water Security Compact for 2026–2030, developed under the World Bank’s Water Forward initiative. The Compact brings together national priorities, reforms and investments covering water supply, sanitation, wastewater management and climate resilience. Senegal aims to mobilise close to US$4.7 billion over the period. The Compact is intended to provide a common platform through which the government, development partners, financial institutions and the private sector can align their activities around a shared investment agenda. For Dr. Diatta, it illustrates the necessary progression from identifying national needs, to establishing priorities, and then translating those priorities into investment-ready project pipelines.
His fourth priority was to bring water more firmly into climate finance. Water lies at the heart of climate adaptation: flood protection, drought resilience, watershed management, water reuse and climate-resilient infrastructure all protect communities and economies against climate impacts. Water should therefore occupy a much stronger position within the portfolios of climate-finance institutions.
Looking towards the UN Water Conference in Abu Dhabi, Diatta described the meeting as an opportunity to translate this agenda into stronger political commitments. Governments would need to increase domestic financing and prepare credible project pipelines. Multilateral development banks should provide more affordable, predictable and catalytic finance, while climate-finance institutions should recognise water as a core adaptation investment. Private capital should be mobilised where appropriate through carefully designed risk-sharing instruments.
Success, Diatta concluded, should ultimately be measured not by the amount of finance announced, but by tangible outcomes: more people receiving services, more resilient cities and economies, better-protected ecosystems and stronger resilience to climate change. “Let us move from commitments to pipelines, from pipelines to investment, and from investment to results,” he said. “That is how we finance water resilience and prosperity.”
The World Bank and the Water Forward Initiative
Sarah Nedolast of the World Bank Group described water security as one of the fundamental challenges of the present era and introduced Water Forward as a new model for responding with greater ambition, urgency and collective action. The scale of the challenge, she said, made it clear that the international community could not continue along its current path.
Globally, 2.1 billion people still lack access to safely managed drinking water, while 3.4 billion lack safely managed sanitation and more than four billion experience some form of water insecurity. The financing requirements are correspondingly vast, with investment needs estimated in the trillions. Yet annual water-sector spending in developing countries amounts to only around US$165 billion, of which private-sector spending accounts for less than 2%. Governments spend an average of approximately 0.5% of GDP on water, compared with substantially higher levels of investment in sectors such as energy and transport. This chronic underinvestment, Ms. Nedolast said, was one of the principal challenges Water Forward was designed to address.
The response would require a change in the way water is understood. Water is not only a basic human need, she argued, but also an “opportunity multiplier” that is fundamental to a country’s growth and development. Investment in water directly creates jobs through the construction and maintenance of infrastructure, enables employment by improving health and workforce productivity, and protects jobs and economies by reducing disease and limiting the damage caused by floods and droughts.
The World Bank Group’s Water Strategy Implementation Plan seeks to address these challenges through three pillars: Water for People, Water for Food and Water for the Planet. Endorsed by the World Bank Group’s Board in December 2025, the strategy represents an unprecedented institutional prioritisation of water. Under the three pillars, the Bank has identified packages of scalable solutions, ranging from improving urban water and sanitation services and supporting farmer-led irrigation to reducing flood and drought risks. These interventions are supported by the Bank’s knowledge work and longer-term programmes anchored in country partnerships.
This approach is intended to bring together the full range of World Bank Group instruments, including those supporting both public- and private-sector investment, to help countries mobilise additional financing. The strategy commits the World Bank Group to improving water security for 400 million people by 2030. Although ambitious for the institution, Ms. Nedolast observed that this represents only around 10% of the more than four billion people currently experiencing water insecurity—a sobering indication of the scale of the global challenge.
Water Forward expands this effort into a wider international coalition with the objective of improving water security for one billion people by 2030. It brings together national governments, multilateral development banks, private companies, donors and philanthropic organisations, each contributing according to its comparative advantage in policy reform, financing, technical support or implementation. The initiative is based on a straightforward premise: no single institution can solve the global water challenge on its own.
Under the Water Forward model, governments first establish their water-security priorities and commit to reforms through national water compacts. Development and financing partners then align their activities around those priorities, working jointly to improve the efficiency and effectiveness of existing expenditure and to mobilise additional public and private finance. Ms. Nedolast summarised the approach in three linked objectives: obtaining more water outcomes from the money already available; mobilising more money for water; and delivering water security to more people.
Achieving these objectives requires more than capital. Bankable and sustainable investments also depend on appropriate policies, credible data, institutional capacity and well-prepared projects. Water Forward therefore promotes longer-term, programmatic engagement in which different institutions and financing instruments can be deployed at different stages. This is intended to move beyond fragmented, project-by-project approaches and the tendency to consider public and private finance separately.
Ms. Nedolast explained that Water Forward involves three categories of partner. Compact countries set ambitious national targets, undertake policy reforms and seek to mobilise public and private finance through country-owned water compacts. Financing partners provide investment and blended finance and commit to joint reporting against the coalition’s target of reaching one billion people. Enabling partners align technical assistance and capacity-building support with government priorities, participate in national coordination platforms, and help co-design and prepare solutions.
The country water compacts form the foundation of this model. They are intended to be owned, led and designed by the participating countries themselves, setting out national reform commitments, investment plans and strategies for leveraging public, private and commercial capital. Twenty countries have now completed compacts. Although national circumstances differ, the compacts identify several recurring challenges, including non-revenue water, operational inefficiencies, climate vulnerability, water scarcity, and persistent inequalities in access.
The corresponding reform priorities generally fall into four areas: governance and institutions; financial sustainability and tariffs; private-sector participation; and service delivery and infrastructure. According to Ms. Nedolast, progress in these areas is essential both to improve the use of existing resources and to attract additional investment that can be sustained over time.
Partners can support country compacts in several ways, including financing and co-financing public programmes, using blended-finance structures to unlock private investment, providing technical assistance to utilities and operators, strengthening institutional capacity, and supporting project preparation. The objective is to reduce transaction costs, align previously fragmented efforts and maximise the impact of available resources.
Nine multilateral development banks have made commitments towards Water Forward’s target of improving water security for one billion people by 2030. Other international financial institutions and climate-finance partners—including the International Fund for Agricultural Development, the OPEC Fund for International Development and the Green Climate Fund—have also committed to supporting the initiative. At country level, partners can provide multi-year resources through mechanisms such as the Global Water Security and Sanitation Partnership, while investing in the institutional capacity needed for long-term sustainability.
Concluding her intervention, Ms. Nedolast encapsulated the coalition’s ambition in three propositions: “Water is life. Water is jobs. Water is resilience.” Water Forward, she said, seeks to unite partners, solutions and finance to secure water for present and future generations.