ADB Warns Water Security Gains at Risk as Asia Faces Climate Threats, $4T Funding Gap

In recent weeks, devastating floods across Southeast and South Asia have underscored the urgency of climate-resilient water systems.

More than 60% of Asia and the Pacific’s population—about 2.7 billion people—has escaped extreme water insecurity over the past 12 years, according to the Asian Development Bank’s new Asian Water Development Outlook (AWDO) 2025. But this progress is at serious risk as environmental degradation accelerates and a massive financing gap widens, putting billions in danger of sliding back into water stress.

A Decade of Progress at Risk

The AWDO report finds that renewed political will, targeted investments, and strong governance reforms since 2013 have driven extraordinary gains in water access, sanitation, and resilience. Yet these gains are increasingly threatened by:

• Rapid ecosystem decline in wetlands, rivers, forests, and aquifers

• Climate-driven disasters, including saltwater intrusion, storm surges, and rising seas

• Intensifying flood events—the region experiences 41% of the world’s floods

• A widening funding shortfall for water-sector investment

In recent weeks, devastating floods across Southeast and South Asia have underscored the urgency of climate-resilient water systems.

A $4 Trillion Investment Need

AWDO estimates that $4 trillion in investment through 2040—or $250 billion annually—is required to meet basic water, sanitation, and hygiene (WASH) needs alone. However, current spending covers less than 40% of that requirement, leaving a yearly deficit exceeding $150 billion.

Norio Saito, ADB Senior Director for Water and Urban Development, cautioned:

“Asia’s water story is a tale of two realities—monumental achievements coupled with rising risks. Without water security, there is no development. We must urgently restore ecosystem health, strengthen resilience, improve governance, and deploy innovative finance to protect the region’s most vulnerable communities.”

Five Dimensions of Water Security Assessed

The AWDO measures water security across five core areas:

1. Access to clean water and sanitation for rural and urban populations

2. Water availability for key sectors such as agriculture

3. Health of rivers and natural ecosystems

4. Protection against water-related disasters

5. Water system governance, institutions, and resilience

Where Progress Has Been Strongest

India:

• Over 840 million rural residents gained improved WASH services since 2013, largely due to landmark government initiatives like Swachh Bharat Mission and Jal Jeevan Mission.

People’s Republic of China:

• Significant investment in flood control, radar-based rainfall monitoring, and emergency response systems has strengthened climate resilience.

Cambodia and Lao PDR:

• Substantial reductions in exposure to unsafe drinking water through expanded rural water systems.

Tajikistan:

• With support from initiatives such as Early Warnings for All, drought risk has decreased and national flood and storm preparedness has improved.

Nature-Based and Governance Solutions Needed

AWDO stresses that sustaining water security requires:

• Protecting natural ecosystems, including watershed forests and river systems

• Establishing national river health monitoring mechanisms

• Strengthening pollution controls and wastewater management

• Empowering subnational governments with funding and authority

• Ensuring gender-inclusive and youth-inclusive planning and decision-making

Mobilizing Finance for Water Resilience

Closing the financing gap will require innovative, blended finance models that combine public and private investment while lowering project risks. Improving water-sector financial sustainability—through tariff reform, efficiency upgrades, and reduced leakage—can help attract additional private capital.

A Collaborative Global Effort

AWDO 2025 was produced in partnership with leading institutions including:

• University of Oxford

• International Water Management Institute

• University of Queensland

• International Center for Water Hazards and Risk Management

• Global Water Partnership

• International WaterCentre

• Griffith University

• IHE Delft Institute for Water Education

The 2025 edition was funded by:

• Japan Fund for Prosperous and Resilient Asia and the Pacific (Government of Japan)

• Water Resilient Trust Fund (Government of the Netherlands)

• Urban Resilience Trust Fund (Government of the United Kingdom)

Since 2007, AWDO has served as the region’s most comprehensive assessment of water security, published every 3–6 years.

A Critical Warning for the Region

With climate impacts intensifying and ecosystems deteriorating rapidly, Asia and the Pacific’s water security outlook hinges on urgent action, strong governance, and unprecedented investment. Without decisive steps, decades of progress risk being reversed—deepening inequality, undermining development, and exposing billions to clean water shortages.