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Growing demands for water are putting an increasing strain on this critical finite resource. In most urban areas in developing countries, water resources are polluted and groundwater is being extracted more quickly than it can naturally be recharged. More and more countries are under severe water stress making them vulnerable to floods and droughts, particularly with the anticipated effects of climate change. As the largest global financier of the water sector, the World Bank is helping client countries better manage their water resources for sustainable growth and poverty reduction.  From 2003-2009 lending for all water sub-sectors has increased including:

Water Supply: Extending and improving urban and peri-urban water supply services requires sound investments along with competent, efficient, and customer-oriented utilities. In rural areas, governments must support demand-driven community managed systems placing the community at the forefront of decision making and management.

Sanitation and Hygiene: More than 2.6 billion people do not have access to basic sanitation and every day, 6,000 children die from diarrheal diseases which are associated with poor hygiene. Building demand for sanitation services and behavior change programs are critical to reduce the risk of disease transmission.

Agricultural Water Management: With so much of the world depending on irrigation for robust crops, water resources will have to be used in a more efficient way. New irrigation projects will have to be balanced with an integrated water resources management framework with participation of many partners, including the private sector.

Environmental Services: The health and productivity of a country’s water resources are critical for restorative and sustainable development. Any reform measures must assess potential impact on rivers, lakes, groundwater and wetlands which are critical for the integrity of ecosystems, and the health and well being of all citizens.

Hydropower: Hydropower is the world’s largest affordable renewable energy accounting for 20 percent of world electricity supply.  But, successful and sustainable projects require careful attention and must respond to all stakeholders and protect the surrounding environment.

Water Resources Management: Managing water resources in a sustainable way must balance the economic, environmental, social and technical dimensions of development. The World Bank works across all sectors to ensure a balanced look at competing uses of water with the participation of all stakeholders.