New Delhi: The Asian Infrastructure Investment Bank (AIIB) is looking to significantly expand its water-sector financing in India as worsening El Niño conditions and rainfall deficits raise concerns over drought and water security.
Speaking during India International Water Week, AIIB Acting Chief Economist Jang Ping Thia said the bank plans to support water infrastructure as well as policy-based lending for regulatory reforms.
India is AIIB’s largest borrowing country, having received around $13.8 billion in financing since the bank began operations, but less than 7% has been directed towards water-related projects.
The proposed financing could support industrial wastewater recycling, groundwater replenishment, urban water utilities and water-efficient irrigation. A $1.1 billion Maharashtra project, for instance, includes automated shut-off mechanisms for solar irrigation pumps to promote water conservation.
A joint AIIB–CEEW study estimates a potential $35 billion market for treated wastewater reuse and a $118 billion opportunity in micro-irrigation, highlighting the scale of India’s emerging water economy.
However, private investment remains limited, with around 85% of water-sector financing currently coming from public revenues. AIIB has identified urban water utilities, smart metering and reliable billing systems as potential avenues for attracting private capital.
With agriculture accounting for up to 80% of India’s freshwater use, the bank has stressed that improving agricultural water efficiency will remain central to India’s long-term water security.
Source: The Economic Times