(Jeddah, 23 Nov.08) The Islamic Development Bank (IDB), the Muslim world's premier multilateral financial institution, estimates that Arab countries may need to invest up to $200 billion in water-related infrastructure over the next ten years, in order to meet the rapidly growing demand for water and sanitation services. It is estimated that as many as 50 million people still do not have access to safe drinking water in the Arab world with a further 97 million lacking access to adequate sanitation.

While only a fraction of the investment requirements is currently being met by the private sector, IDB sees a greater role for the private sector in meeting demand for water and sanitation infrastructure services over the next decade, indicated Dr Ahmed Mohamed Ali, President of the IDB Group, at a high-level meeting of the United Nations Secretary General's Advisory Board on Water and Sanitation (UNSGAB) recently held at Riyadh's Conference Palace and hosted by the Kingdom of Saudi Arabia, in partnership with the Arab Water Council and IDB.

This high-level event, which was chaired by His Royal Highness Prince Willem-Alexander, the Prince of Orange and Crown Prince of the Netherlands, in his capacity as chairperson of UNSGAB, was held in conjunction with the 1st Arab Water Forum and the Prince Sultan International Prize for Water award ceremony. Along with some 20 members of this top UN panel on water, some 17 Arab water ministers and deputy ministers also participated, in addition to representatives from the League of Arab States, Japan, Germany, The Netherlands, United Kingdom and Italy (as it assumes the G8 Presidency). The Prince of Orange, for his part, praised IDB's role in supporting the development of the water sector across the Arab region through both investment and capacity building activities.

Addressing UNSGAB, Dr Ali reminded that, while the Arab region was home to 5 percent of the world’s population, it only possesses 1 percent of its renewable water resources, making it the driest region in the world. Today's average annual water availability per capita is merely a third of what it used to be in 1960, and is expected to drop by more than a half by 2050 to 550 m3 per capita per year, just slightly above the absolute water scarcity threshold of 500 m3 per capita per year, he added.

Population growth, urbanisation and declining water quality are putting unprecedented pressure on the Arab region’s dwindling water resources, some 60 percent of which emanate from outside the region itself, Dr Ali continued. This worrisome situation is being further exacerbated by climate change, food security concerns (in the aftermath of the global food security crisis that saw food prices surge dramatically in Spring 2008) and the looming global recession resulting from the unfolding global financial crisis. With as much as 80-90 percent of the total water allocation going to irrigation, there is growing competition in the Arab Region amongst the main water using sector: domestic, industrial and irrigation. Recognising these formidable challenges, Dr Ali said, the IDB Group Vision 2020, a blue print for its long-term objectives, singled out the provision of water and sanitation as one of its main themes.

To date, IDB has provided more than $2.5 billion of assistance in the water sector to its 56 member countries. This financing, which represents around 15 percent of its aggregate project financing commitments, targeted some 250 water-related projects worth in excess of $10 billion. AroundUS$1.5 billion of this assistance targeted the Arab region, including $1.1 billion for water supply and sanitation projects. IDB is equally active on the institutional capacity building front, for example, in its capacity as a founding member of the Cairo-based Arab Water Council, a regional water policy think-tank, and the Abu Dhabi-based Arab Water Academy, a regional capacity building programme hosted by IDB's Dubai-based International Centre for Biosaline Agriculture (ICBA) in partnership with the Abu Dhabi Environment Agency (EAD).

Arab water Ministers such as Saudi Arabia's Abdullah Abdulrahman Al-Hussayen, Minister of Water and Electricity, and Egypt's Dr Mahmoud Abu-Zeid, Minister of Water Resources and Irrigation, for their part, highlighted the need to pay greater attention to the financial sustainability of water investments through adequate water tariff structures and a stronger focus on water demand management.

At the conclusion of this 3-day meeting, Dr Ali and His Royal Highness Prince Willem-Alexander signed a cooperation agreement between IDB and UNSGAB, which will focus primarily on financing, sanitation services, water operators partnerships and integrated water resources management.