The World Bank Group has launched a global platform, Water Forward, alongside major multilateral development banks and financial institutions, in a bid to improve water security for up to 1 billion people by 2030 and unlock investment into a sector it says underpins economic growth and jobs.
The initiative brings together partners including the Asian Development Bank, European Investment Bank, Islamic Development Bank and the Inter-American Development Bank to align policy reforms, financing and technical support across countries, the lender said in its announcement at the Spring Meetings on Wednesday.
“Water is foundational to how economies function. When water systems work, farmers produce, businesses operate and cities attract investment,” said World Bank Group president Ajay Banga. The priority is to “align reform, financing, and partnerships to deliver reliable water services at scale”, he added.
The platform centres on country-led “water compacts”, with 14 nations already announcing plans to reform policy, strengthen institutions and develop investment routes aimed at attracting public and private capital.
The World Bank Group and its partners argue that expanding the water sector is essential not only to address shortages but to sustain economic growth and develop an estimated 1.7 billion jobs tied to water-dependent industries.
The 1.7 billion figure includes direct water-related jobs and employment in sectors such as agriculture, energy and industry.
The initiative could go beyond its goal of improving water security 400 million people by 2030, the lender said. Weak regulation and financially unsustainable utilities continue to deter investment in many countries, it believes.
“The World Bank Group alone cannot meet the immense needs of countries’ water challenges,” it added.
Thirsty for funds
The World Bank said private sector participation is “a critical lever for addressing the growing challenges in the water sector”, noting that firms “bring not only additional capital, but also innovation, operational efficiency and results oriented delivery models”.
Their role, however, remains limited. Private investment accounts for only about 10 per cent of capital expenditure in water, compared with about 50 per cent in transport and energy, and 90 per cent in digital infrastructure, the report said.
While similar levels may not be achievable in water, the World Bank said there is scope to double private participation to 20 per cent over the next decade, driven in part by fiscal constraints on governments and “growing recognition of the importance of cost-reflective water pricing to reduce wastage and ensure financial sustainability”.
To incentivise private capital, its report highlights a clearer investment case. It recommends the creation of more “bankable” projects, alongside regulatory reforms and financial de-risking tools such as guarantees, blended finance and credit enhancement, all measures designed to improve returns while limiting exposure in markets historically seen as high risk.
Foundation for growth
Beyond financing, the World Bank said water is a foundational input across the global economy, with reliable water systems raising productivity and reducing operational risk.
The economic value of water ecosystems has been estimated at as much as $58 trillion annually, despite limited direct monetisation, according to World Economic Forum analysis.
This can translate into investment opportunities in irrigation, wastewater reuse, and bulk water supply for expanding urban and industrial centres.
At present, however, the sector remains overwhelmingly public. Annual water spending in developing countries totals about $164.6 billion, about 0.5 per cent of their GDP, with around 91 per cent funded by governments and state-owned entities. Less than 2 per cent comes from private investors.
Closing the gap would require an additional $131 billion to $140 billion annually, nearly tripling current investment levels.
“Public investment alone is insufficient to meet the scale of these challenges and badly needed private investment remains constrained,” the World Bank said.
The institution stressed its latest initiative is not about privatisation but enabling private participation alongside public oversight.
Central to this are the “country water compacts”. These aim to improve utility creditworthiness, introduce clearer pricing structures and create stable policy environments. The World Bank said these conditions are necessary to “secure market development”.
With more than 1.2 billion young people expected to enter the workforce in developing countries over the next decade, the institution said reliable water systems will be critical to sustaining job creation and economic expansion.
For years, regulatory uncertainty, weak revenue models and political sensitivities around water pricing have limited private investment. The World Bank said its strategy seeks to address those barriers through co-ordinated reforms and financial instruments.
