The African Development Bank Group is pressing for more sustainable financing models for shared water resources, including rivers, lakes and marine ecosystems, as development institutions seek to reduce dependence on short-term grants and secure longer-term investment in water management. The Bank raised the issue at the 11th Global Environment Facility (GEF) Biennial International Waters Conference in Bali, Indonesia, held from 17 to 22 October 2026, where governments and development partners discussed financing arrangements for transboundary waters and shared ecosystems.
According to the Bank, its participation focused on moving international water projects beyond reliance on grant funding towards more durable public and private investment. On 17 October, the Bank co-hosted a workshop with GEF IW, the Asian Development Bank, the Development Bank of Latin America and the Caribbean, the Inter-American Development Bank and the World Bank to examine how blended finance and multilateral development bank funding could support the next phase of investment in shared water systems.
The discussions come as African countries face growing pressure to manage water resources that cross national boundaries while meeting rising demand from households, agriculture, energy producers and industry. Rivers and lakes sustain irrigation, fisheries, hydropower and urban water supplies, making their management an economic and governance issue as much as an environmental one. Decisions taken in one country can affect water availability, livelihoods and infrastructure in neighbouring states, requiring coordination that extends beyond national budgets and regulatory systems.
For Africa, where many major river basins are shared by several countries, the financing of cross-border water management has implications for regional integration and economic stability. The Nile, Niger, Senegal, Congo and Zambezi basins support millions of people and underpin food production, electricity generation and commercial activity. Managing these resources requires investment not only in physical infrastructure, but also in water monitoring, pollution control, ecosystem protection, data sharing and institutions capable of coordinating decisions between governments.
The African Development Bank said its engagement at the conference included practical sessions on financing sustainable fisheries and aquaculture. Participants examined barriers that prevent projects from attracting investment, considered financing options and developed proposals aimed at investors, alongside briefing notes for finance ministries.
The emphasis on bankability reflects a persistent challenge in environmental finance. Projects that protect aquatic ecosystems or improve the management of shared water resources can generate substantial public benefits, but those benefits do not always translate into predictable revenue for investors. As a result, projects may struggle to attract commercial capital even when they are important to economic development and long-term resilience.
Blended finance is one approach to addressing this problem. By combining grants or concessional funding with public and private investment, it can help cover early stage project preparation, technical assistance or selected risks that commercial lenders are reluctant to absorb. Multilateral development banks can also provide longer-term financing and help governments structure projects with clearer financial and governance arrangements.
However, the approach has limits. Private investment is more likely to support activities with identifiable revenue streams, while ecosystem restoration, water quality monitoring and cross-border governance often require continued public funding. The challenge for governments and development partners is to determine which activities can support commercial investment and which must remain dependent on public budgets or concessional resources. Poorly structured arrangements could leave essential services underfunded or transfer excessive costs to water users and governments.
The issue is particularly relevant to African economies where water security is closely linked to food and energy security. Unreliable water supplies can disrupt agricultural production, raise costs for businesses and place additional pressure on public spending during droughts and floods. Hydropower projects also depend on water availability, while mining, manufacturing and urban expansion increase demand for reliable supplies. Investment decisions that overlook these connections risk creating infrastructure that is less resilient to changing rainfall patterns and competing demands.
Beyond financing, the Bank contributed to discussions on the Transboundary Diagnostic Analysis and Strategic Action Programme approach, known as TDA/SAP, used to identify shared environmental problems and establish coordinated responses. The conference session examined how strategic action programmes could be embedded more permanently in governance structures and supported by financing after individual projects end. Participants also developed recommendations relevant to the Global Environment Facility’s ninth replenishment cycle.
For African countries, the question of what happens after a donor-funded project closes is significant. Water management institutions need predictable resources to maintain monitoring systems, enforce environmental standards and coordinate with neighbouring governments. Without sustained funding and clear institutional responsibilities, the benefits of initial investments can weaken once external support is withdrawn.
The African Development Bank’s participation also provided an opportunity to discuss future joint projects with the Global Environment Facility and other partners, drawing on the Bank’s work on international waters and the blue economy in Africa. The conference did not announce a specific new African financing package in the published account, leaving the scale and geographic distribution of any future investment to be determined through subsequent project development and funding decisions.
The wider financing challenge extends beyond transboundary ecosystems to water supply, sanitation and climate-resilient infrastructure. African governments must fund expanding urban services and rural water systems while managing competing demands on limited public resources. Development finance institutions can help mobilise capital and strengthen project preparation, but outcomes will also depend on procurement, regulatory capacity, cross-border cooperation and transparent oversight of funds.
The discussions in Bali underline a central issue for Africa’s water security: securing initial project finance is only part of the task. Sustaining shared resources requires long-term funding, institutions capable of implementing agreed measures and cooperation between countries whose economic interests depend on the same rivers, lakes and ecosystems. Whether new financing models can deliver that continuity will be important to the resilience of African food systems, energy infrastructure and communities dependent on reliable water supplies.
