Strengthening Water–Energy Coordination to Build Climate Resilience in Central Asia

The OECD finds that Central Asia’s growing climate risks, ageing infrastructure and rising demand make separate management of water and energy increasingly costly and unsustainable. Stronger regional coordination, through shared data, better institutions and jointly planned investments could reduce economic losses, improve energy and water security, and build long-term climate resilience across the region

A report, produced by the OECD Secretariat with the Scientific Information Center of the Interstate Commission for Water Coordination of Central Asia (SIC ICWC), and supported by partners such as UNECE, EBRD and FAO under Germany’s International Climate Initiative, looks at how Central Asia manages two deeply connected resources: water and energy. The region’s five countries, Kazakhstan, the Kyrgyz Republic, Tajikistan, Turkmenistan and Uzbekistan, are under growing pressure from climate change, population growth and ageing infrastructure. Rivers are becoming less predictable, glaciers are shrinking, floods and droughts are more frequent, and electricity systems are struggling to cope. The report argues that managing water and energy separately is no longer workable and that closer coordination is essential for long-term stability and growth.

A System Shaped by History, Strained by Change

Central Asia’s water–energy relationship is shaped by its Soviet past, when resources were managed centrally across the region. Upstream countries stored water in winter and released it in summer for downstream irrigation, while downstream countries supplied fuel and electricity in return. This system prioritised regional efficiency but caused serious environmental damage, including the collapse of the Aral Sea. After independence, countries replaced central planning with regional institutions and agreements, such as IFAS and ICWC, to manage shared rivers and power systems. While these arrangements helped avoid major conflict, they were designed for short-term coordination and have struggled to adapt to today’s economic realities and climate risks.

The High Cost of Poor Coordination

Weak coordination between the water and energy sectors has real consequences. Power outages, inefficient water releases, unreliable irrigation and under-maintained infrastructure are increasingly common. Upstream countries face winter electricity shortages, while downstream countries suffer water stress during the growing season. Climate change is making these trade-offs harder, as river flows decline over time and extreme events become more frequent. The report shows that poor coordination leads to economic losses, wasted resources and political tension, while limiting the region’s ability to attract investment and adapt to climate change.

Three Practical Ways to Improve Cooperation

The OECD identifies three main areas where better coordination can make a difference. First, stronger data and knowledge sharing are essential. Good decisions require reliable information on water flows, climate risks and energy demand, but monitoring systems are often outdated and fragmented. Investing in modern data systems, science and training would help countries plan better and reduce uncertainty. Second, institutional coordination needs to improve. Water and energy agencies rarely work closely together, even though their decisions affect each other. More regular interaction, shared planning and longer-term agreements could reduce conflicts and improve efficiency. Third, infrastructure investment must be better coordinated. The region needs large investments to repair old dams, canals and power plants and to build new ones that can withstand climate stress. Joint planning and shared projects, supported by development banks and private investors, could deliver bigger benefits than isolated national projects.

Financing and the Road Ahead

A major barrier to progress is financing. Many water institutions struggle to cover basic operating costs, and water and energy tariffs are often too low to support maintenance and new investment. This weak financial base discourages private investors and increases reliance on public budgets and donor support. The report stresses the need for clearer rules, fair pricing, stronger institutions and better use of public–private partnerships to mobilise funding. Drawing lessons from river basins in Europe, Africa and Asia, the OECD shows that successful cooperation depends on clear roles, shared benefits and long-term planning. The report concludes that Central Asia faces a clear choice: continue with fragmented, short-term approaches that increase risk, or build a more coordinated system where water and energy support economic growth, climate resilience and regional trust.