"The benefits of joint water-climate action span human, economic, and planetary dimensions"

Drawing on your experience leading the World Bank's $30 billion Water Global Practice portfolio, what key lessons have you learned about financing resilient, sustainable utilities?

The world has changed dramatically since 1990, when I started my career as a water professional at the World Bank. Since then, the global population increased 55% (from 5 to 8 billion), accompanied by economic globalisation, poverty reduction amid rising inequality, a technology and digital revolution, and increasingly devastating climate change impacts. However, one constant remains: 25% of the global population, mainly in developing countries, still lacks access to safe water, and, importantly, the basic principles needed to finance resilient and sustainable utilities remain unchanged.

Drawing on my experience, I highlight five of many lessons from financing sustainable water and sanitation utilities:

• The importance of an institutional framework, policies, and regulatory environment that provide stability and clear rules to investors, utility managers, and consumers. Recognising water as a natural monopoly, economic regulation must drive operational and performance efficiency; cost-reflective, affordable tariffs; transparent governance and reporting; and service quality standards that deliver social equity, health, environmental benefits, and climate resilience. A major challenge in Sub-Saharan Africa is that fewer than 50% of countries have an independent water regulatory system.

• The importance of a tariff regime that enables utilities to achieve full cost recovery for operations, maintenance, and capital expenses while ensuring equity and affordability for vulnerable populations. Community and other stakeholder participation in understanding and setting tariffs builds trust and increases willingness to pay for services that people want and can afford. Campaigns against charging for water, justified as water being a human right and also part of movements against the privatisation of water, fail to recognise that safe drinking water is a service that needs to be provided and paid for, be it through tariffs, user fees, or taxes.
• A requirement that utilities be creditworthy as a prerequisite for receiving financing. This means the utility must be financially viable and sustainable, operate efficiently and transparently within the regulatory environment, meet customer demand, and fulfil current and long-term financial obligations. Creditworthiness assessments are useful to evaluate a utility's financial health and identify operational, financial, and governance weaknesses that can be addressed. I call this approach "fix the leaks before adding new water." Kenya's Creditworthiness Index has led to increased accountability and access to commercial lending for 40 utilities.
• Technical assistance is critical for utility performance and creditworthiness. Many utilities experience significant staff turnover. Yet as technology and innovation develop rapidly, opportunities emerge for utilities in developing countries to leapfrog into the digital era, adopting advances in remote sensing, AI, water treatment technologies, and nature-based solutions. Capacity building can help utilities improve creditworthiness.
• Customer demand should inform service planning. Assumptions are often made that households will immediately connect to improved services. However, unserved households typically secure alternative provision methods (e.g., wells, public standposts, tanker trucks, onsite sanitation) and will only connect if the new service offers better quality, reliability, and affordability. Connections to sanitation often need to be mandated due to the increased costs and public good nature of off-site sanitation. As income increases, so does the demand for a higher level of service. Recent World Bank projects in Africa and Asia are expanding service from public standposts to household connections. Importantly, willingness to pay for reliable and improved services far exceeds what many politicians acknowledge.

With an estimated $6.7 trillion needed for water infrastructure by 2030, what mix of public, private, and blended finance is essential, and how can utilities position themselves to access it?

A substantial financing gap exists between the World Bank's estimate of $6.7 trillion needed to deliver services across water sectors by 2030 and the $165 billion in annual investment currently made in developing countries. Considering that developing countries account for 84% of the global population and that over 90% of annual water spending comes from the public sector, substantial scope exists to increase private sector financing from its current 2% share. With an annual investment of $20 billion by multilateral development banks (MDBs) in 2024, while catalytic, particularly to support sector reform, it represents only a drop in the bucket of total investment needs.

As utilities look for financing, they can best position themselves to access external financing by achieving creditworthiness, operational efficiency, and realistic short- and long-term planning, supported by a credible national regulatory environment. The importance of creditworthiness cannot be overemphasised, as it not only provides an assessment of a utility's ability to take on debt, but also, as public funding becomes more constrained, utilities need to show they are using public money efficiently, given the shortage of funds for the sector.

Utilities should focus on quick-win, practical investments, like leak reduction, solar adoption, and maximising connection rates in service areas

In terms of realistic planning, a focus on investment prioritisation and domestic resource mobilisation are good first steps for immediate results. Utilities should focus on quick-win, practical investments, like leak reduction, maximising connection rates in service areas, energy efficiency, and adoption of renewable energy. Additionally, with tariffs paid in local currency, mobilising domestic resources allows utilities to mitigate foreign exchange risks. Beyond user fees and tariffs, utilities can access domestic capital markets and leverage government-backed bonds. The Tanga Water Utility in Tanzania recently issued an oversubscribed green bond to finance major water infrastructure expansion, raising capital from domestic investors, including pension funds, insurance companies, and local financial institutions.

Blended finance instruments, hybrid models combining public and private capital, are part of the MDB reform process, with external grant and concessional finance being used to leverage private capital. By reducing perceived risk through partial guarantees or concessional first-loss capital, MDB financing enables utilities to access larger private investment. This bridge financing, usually coupled with technical assistance and enhanced credibility, often matters more than the capital amount provided.

Blended finance instruments extend beyond traditional PPPs and concessions to include green bonds, impact investments, ring-fenced bulk infrastructure investments, results-based financing, and risk-sharing facilities. Other financial innovations include vendor finance and a range of microfinance instruments provided to end users and to emerging technology start-ups. The As Samra wastewater treatment plant in Jordan has a blended financing package consisting of grants, government funding, equity investments, private commercial debt, and a non-commercial risk guarantee (provided by the Multilateral Investment Guarantee Agency - MIGA).

As climate change intensifies water risks, how can resilience be better integrated into investment planning, and how can utilities use the strong economic case for resilience to mobilise financing?

Climate change increases water risks stemming from increased water variability ("too much or too little water") due to droughts and floods, and rising temperatures, degraded water quality, and saline intrusion from sea level rise ("water too polluted"). Impacts spread across all water-consumptive industries — beyond utilities — to food production, energy, and industry. Small island states, coastal zones, regions with water scarcity, and populations living in major river deltas are particularly exposed to climate shocks.

Utilities can enhance resilience through proven adaptation strategies. The recent "day zero" experiences in São Paulo and Cape Town reinforce the need for utilities to operate with optimal efficiency and a relentless focus on demand-side management and community engagement as a precursor to investing in supply-side expansion. Important cost-effective strategies include investing in leak detection and water conservation, integrating climate risk modelling into planning, adopting early warning systems and drought and flood contingency plans, energy management and backup power systems, and applying economic tools to reward reduced consumption.

Supply expansion solutions typically require high incremental costs and can include infrastructure investments in water source diversification across watersheds, circular economy approaches, desalination and wastewater reuse, expanded storage and aquifer recharge, leak reduction, and elevating critical equipment above flood levels. Nature-based solutions like watershed protection and wetland restoration also provide year-round dual benefits of adaptation and mitigation.

Resilience investments in utilities offer high returns and reduce economic risk. The World Resources Institute analysed 320 projects and found an average of 27% returns over ten years, with over 50% of benefits occurring even without climate disasters, simply through improved efficiency. The World Bank notes that water supply disruptions can cause substantial economic losses and employment impacts, with water-intensive sectors accounting for 55% of employment in low-income countries. The cost of inaction is devastating: without investment, water disruptions will cost U.S. businesses $250 billion annually by 2039.

However, a challenge for utilities accessing climate finance, such as the UNFCCC Green Climate Fund, development finance, and impact/green investment, is the lack of global standards for quantifying incremental costs to climate-proof water investments. And of course, utilities must also be creditworthy and well-managed to be considered for climate finance.

How can utilities design projects or financing mechanisms that capture both resilience and climate-mitigation benefits, such as through renewable energy integration?

Water investments offer significant opportunities to deliver climate co-benefits by combining adaptation and mitigation

Water investments offer significant opportunities to deliver climate co-benefits by combining adaptation (adjusting to climate change impacts) and mitigation (reducing greenhouse gas emissions). Beyond the adaptation benefits mentioned above, mitigation benefits arise from improving utility efficiency across municipal water provision and water-intensive energy, agriculture, and industrial sectors; from using wastewater as a resource and reducing methane emissions; and from switching from thermal to renewable energy. The World Bank and other MDBs have committed to aligning their investment portfolio to the 2015 Paris Agreement, and as such require project proponents to show that their proposed investments will deliver development impact while supporting the transition to a low-carbon economy and building adaptive capacity.

As such, all World Bank-supported water and wastewater projects now include significant climate co-benefits, with notable examples of investments in water efficiency, flood management, resource recovery, and nature-based solutions. The Vinh City Flood Resilience Project in Vietnam funded a new stormwater storage lake and converted vacant land into green public spaces, which help the city cope with severe rainfall events and reduce flooding. At the same time, the improved stormwater and waste management reduced the pollution load in the water entering the treatment plant, thereby reducing its energy consumption. A performance-based contract with the Yerevan (Armenia) water utility led to the rehabilitation of pumping stations, providing cost savings, reducing energy use and greenhouse gas emissions. The improved operational performance of the utility built resilience against future cost increases and service disruptions.

The cost of inaction is devastating: without investment, water disruptions will cost U.S. businesses $250 billion annually by 2039

Investments in treating wastewater yield some of the highest co-benefit returns and are especially important for reducing methane emissions, a greenhouse gas 80 times more potent than carbon dioxide. Not only does untreated wastewater generate a GHG footprint roughly three times higher than treated wastewater, wastewater contains significant amounts of untapped energy and valuable resources. This includes capturing biogas from anaerobic digestion of organic waste and its reuse as a renewable energy source to power the facility. Nutrients can also be recovered and converted to fertiliser. Treated wastewater can be reused, including for industrial and agricultural purposes, thereby reducing the demand for energy-intensive desalination or extraction of new freshwater supplies and simultaneously building resilience.

In terms of nature-based solutions, a World Bank-supported Coastal Resilience Project in Indonesia funded the rehabilitation of mangrove ecosystems. Mangroves are effective "blue carbon" sinks, absorbing and storing atmospheric carbon naturally and also acting as natural buffers, protecting communities from coastal flooding and storm surges caused by climate change. Opportunities are now being explored to mobilise carbon credits for the carbon sequestration provided by the mangroves.

Equipping and converting utilities to renewable energy provides direct mitigation benefits. Solar-powered water pumps provide reliable water access during droughts while eliminating fossil fuel use. The World Bank found that closing irrigation gaps with solar pumps could benefit 98 million Africans while avoiding 410 million tonnes of CO₂ annually, adopting systems such as SunCulture in Kenya and Uganda's PUMP-UP project. Ethiopia's $50 million Green Climate Fund project is deploying solar pumps across drought-vulnerable regions, demonstrating how climate finance flows to projects with clear dual benefits.

Supporting utilities to strategically design projects that deliver both climate resilience and greenhouse gas emissions reductions not only benefits people and the planet, but the projects can also unlock multiple new financing sources.

Many water leaders talk about "scaling impact." In your experience, what actually helps scale innovation, policy, finance, or people?

Blended finance instruments extend beyond traditional PPPs and concessions to include green bonds, impact investments, and results-based financing

This is an excellent question, and one upon which I have been actively reflecting. To achieve large national-level impact, I believe a combined approach is required, one that blends: (a) science, data, and innovation; (b) policy and institutional reform; (c) stakeholder engagement and capacity building; and (d) finance and adaptive implementation. Given the complexities of temporal and spatial changes of the water cycle, the competing demands for water across sectors, rapid acceleration in technology, data science, and AI, and opportunities for countries to leapfrog into global best practices, scaling impact requires an intensive focus on implementation with continuous learning and adapting, moving from words to action.

This integrated approach to scaling impact and the principles of adaptive implementation were heavily debated during the 12th Rosenberg International Water Policy Forum on "Managing River Deltas," held in Vietnam last month, sponsored by the University of California and the Spanish Fundación Botín. A key overall objective of this forum is to emphasise the role of science in the making of water policy and in the management of water resources. I presented on experiences of translating the principles of Adaptive Delta Management, pioneered by experts in the Netherlands and the Sacramento-San Joaquin Delta in California, to address the complex and long-term challenges faced by river deltas due to increased demands for upstream water across sectors, urbanization and industrial pollution, reduced sediment flows, saline intrusion, and other impacts of poor development decisions and climate change. The Adaptive Management approach is cross-disciplinary, based on sound analytics, and integrates the concept of "adaptation pathways," which are sequences of possible management actions that can be triggered by future developments. The framework was adopted by the Vietnamese Government to prepare its 2013 Mekong Delta Plan.

The World Bank has provided technical assistance and financing to support the translation of this government-led, scientifically backed, extensively consulted delta plan into projects that could be financed and implemented. This included tangible investments in urban water supply, irrigation and climate-smart agriculture (switching from triple to double cropping rice, and leaving agricultural lands to excess waters during flood season), and ecosystem preservation. Lessons point to the challenges of coordination across multiple government, private sector, academia, and other stakeholder groups, while trying to innovate within existing government financing and budgetary processes. While the projects experienced significant implementation delays, with continued support, scalable impact was achieved through local ownership and policy appropriation, tangible and sustainable benefits delivered with communities, and the benefits of adopting a systemic learning and adaptive approach to implementation, supported by a sound data and information system.

Another example of impact achieved at scale by working across science, policy, people, finance, and implementation can be drawn from Bangladesh's response to arsenic-contaminated drinking water that affects close to 40 million people. The program's success stemmed from coordinated action across sectors. From a policy perspective, the government developed a national arsenic mitigation policy, provided standards for water quality with arsenic limits set at 50 µg/L, and protocols for water testing by local health and water departments. Innovations in drilling allowed for tube wells to reach deeper underground layers of clean water, and scientists also created maps of aquifers and simple test kits for communities to test their own wells. The World Bank provided funding for expanding infrastructure and capacity building through a program that tested 5 million wells and encouraged people to stop using contaminated wells and walk further to the new safe ones. By putting all these pieces together, science, policy, finance, people, and implementation, arsenic exposure dropped dramatically across the country, with research showing that switching from contaminated shallow wells to safe alternatives reduced exposure by 40-70%.

While these examples point to the criticality of an integrated approach to achieve impact at scale, the importance of evidence-based policy cannot be overemphasised, especially as a way to accelerate innovation take-up and investment. The policy, regulatory, and tariff reforms in Senegal in the early 2000s paved the way for the emergence of large-scale private engagement and financing of service expansion in the urban water sector across West Africa. Adoption of national policies allowing for community management of services dramatically accelerated rural water provision across China, Indonesia, and Morocco. And a policy shift by water utilities in Bangladesh allowed Drinkwell, a technology start-up supported by Imagine H2O, to provide "Water ATM booths" with new filtration technology and prepaid water meters to operate in hard-to-reach areas.

Delivering water impact at scale depends on an integrated approach, policy and institutions, locally adapted scientific and technical innovation, stakeholder engagement, and innovative, context-specific finance. Success requires a clear focus on implementation, adaptive learning, and accountability for achieving results.

Within this context and with countries and societies now facing acute challenges of a "too much, too little, and too polluted" water cycle with competing demands across not only water-energy-food, but also industry-ecosystems-AI-climate resilience nexus, there is no escape from the need for an integrated policy and planning approach to water management.

The success in addressing the complexities of Vietnam's Mekong Delta and Bangladesh's arsenic mitigation experiences through an integrated science-policy-people-finance-adaptive implementation approach was only possible because of the cross-sectoral approaches adopted. In the Vietnam Delta, this includes the need to adapt to the upstream hydropower projects for energy affecting water and sediment flows, sand mining for industrial and urban use, trade-offs between farmers using fresh water for rice or saline water for shrimp and fisheries, urban utilities needing fresh water storage due to groundwater depletion, and mangroves needing tidal flows for nutrients. Similarly, reducing arsenic poisoning in Bangladesh requires a nexus coordination across the drinking water industry, agriculture, and health.

The recent “day zero” experiences in São Paulo and Cape Town reinforce the need for utilities to operate with optimal efficiency

These examples demonstrate the need for a nexus approach to sustaining water resources and delivering water-related services across all sectors while building resilience. More specifically, water-consumptive energy generation competes with water for irrigation, flood control, and storage for drought management; energy is needed for all aspects of domestic water and sanitation provision. Climate stress intensifies these competitions and requires optimisation. Integrated planning using nexus frameworks identifies synergies enabling win-win solutions: climate-smart agriculture reducing water demand while improving resilience; wastewater reuse simultaneously conserving water and reducing energy pumping loads; hydropower generation balanced with environmental flows supporting food security through ecosystem services.

Nexus planning also enhances water resilience to climate variability. The Alliance for Global Water Adaptation has developed a tool called the "Water Resilience Tracker for National Climate Planning," which serves as a diagnostic guide for cross-sectoral water resilience understanding in national climate plans. Rather than optimising single sectors independently—potentially creating cascading failures when climate shocks disrupt one system—integrated approaches distribute risk across multiple water uses. Vietnam's adaptive delta management exemplified this: shifting from triple to double rice cropping simultaneously allowed seasonal flooding that sustains ecosystems supporting fisheries, while protecting urban areas from flooding. This enables the delivery of multiple resilience dimensions simultaneously.

In sum, successful nexus implementation will depend on coordinated science, policy, stakeholder engagement, finance, and adaptive implementation across sectors—and a huge degree of trust.

How can community-led or decentralised water solutions support water security in climate-vulnerable areas, and how might policy or finance frameworks better enable them?

I started my career working on community water and sanitation, supporting rural areas on the US Navajo reservation, in rural Liberia, and with indigenous populations in the Bolivian Altiplano. Even today, while these areas are often neglected by the "formal" water utilities, community-led, decentralised water solutions are critical to providing water security in climate-vulnerable areas. These systems are often the only solution where traditional centralised infrastructure provision struggles—in remote regions, small island states, and hard-to-reach communities facing severe water variability.

In 1997, I led a global research initiative that analysed the determinants of the sustainability of rural water and sanitation. It showed that communities already manage water through local methods: wells, standposts, and rainwater collection, and have ways of disposing of their waste. The research concluded that a key determinant of sustainable services was when they delivered better quality, reliability, and affordability—services that the community demanded and for which they were willing to pay. The results of this work were used to influence national policy and financing at scale that recognised decentralised, community-based solutions management, leading to national programs across the Andean region, Asia, and Africa.

Building on these lessons, we are now seeing, 30 years later, the continued resilience of community-led water systems and local management structures to respond more quickly to adapt to local water variability. In coastal Bangladesh, where saltwater intrusion contaminates centralised groundwater wells, village-managed rainwater harvesting now provides reliable drinking water while reducing flood risks by capturing seasonal monsoons. Ethiopia's community water committees blend traditional conservation knowledge with modern techniques, tripling agricultural productivity while cutting energy-intensive pumping that depleted aquifers. In other regions, when floodwater can contaminate supplies or droughts can lead to water shortages, communities can detect contamination faster, switch between sources within days rather than months, and adjust consumption service levels based on better knowledge of local hydrology.

A challenge for decentralised community water systems is the struggle for a favourable national policy environment and access to funding. Development banks and climate funds typically channel their finance through national governments or the private sector. However, with a well-established policy framework that supports community-owned and -managed systems, at scale, progress can be made, with the example of Indonesia's PAMSIMAS program. With small grants provided to villages and intensive training, the government has reached over 5,000 communities across the country, with results showing that systems that are locally maintained have a 78% functionality rate compared to 45% for utility-managed approaches.

Community-led decentralised water solutions, in rural and urban areas, should be considered as complements to centralised systems. In many places, these systems cost less, produce fewer emissions, can adapt faster, and, importantly, empower vulnerable populations. Supporting communities to manage their water security builds resilience in areas where climate impacts often hit hardest.

After decades of service, what gives you the most hope about the future of water and climate action?

The World Bank found that closing irrigation gaps with solar pumps could benefit 98 million Africans and 410 million tonnes of CO₂ annually

As world leaders gather at COP30 in Belém, Brazil, I have renewed optimism that water will receive its long-overdue recognition in the climate space, with the realisation by political leadership that water and climate change are inextricably linked.

Throughout my career, as I worked directly with countries, utilities, and communities across the developing world to support sector reform, build capacity, develop and finance sustainable and resilient projects while enabling the flow of knowledge and best practice across countries, the global water community tirelessly sought political visibility. In 2010, the UN General Assembly declared that water and sanitation are a fundamental human right. In 2016, the High Level Panel on Water, comprising 11 Heads of State, urged the global community to "rethink how we understand, value and manage water as a precious resource," while the Bellagio Principles established core values for water management. The UN 2023 Water Conference, inspired by the Dushanbe Water Process, generated unprecedented political momentum. Most recently, the Global Commission on the Economics of Water reframed water as a global common good, calling for revolutionary food systems, habitat conservation, circular water economies, clean energy with lower water intensity, and universal access to safe water by 2030. It recognised the importance of partnerships, finance, data, and global water governance to catalyse action.

In parallel, climate negotiations increasingly recognise water's central role. While not explicitly featured in the 2015 Paris Agreement, water has become embedded in Nationally Determined Contributions and National Adaptation Plans across energy, agriculture, sanitation, and ecosystems. At COP29, the Baku Declaration on Water for Climate Action was launched, and water is figuring prominently in the COP30 negotiations on a Global Goal for Adaptation.

I am hopeful that COP30 will result in accelerated water-climate integration. The benefits of joint water-climate action span human, economic, and planetary dimensions. Critically, joint water-climate action advances equity and justice. Vulnerable populations — women, children, Indigenous communities, and those in water-scarce regions — experience disproportionate climate-water impacts.

Urgent action remains needed to achieve water and sanitation goals and climate security. There is a moral imperative to ensure 2.2 billion people have access to safe drinking water and 3.4 billion people to improved sanitation, as we manage the impacts of "too much, too little, and too polluted water" across the world.

Without water security, neither the Paris Agreement goals nor the Sustainable Development Goals can be achieved.