Bridging the %E2%82%AC6.5 Trillion Water Infrastructure Gap A Playbook 2025

Currently, global investment in water infrastructure amounts to roughly €326 billion per year, equivalent to just €41 per capita. To bridge this gap by 2040, annual investments would need to grow by an additional €431 billion per year, representing an increase of around €54 per capita. This implies that the required future spending must reach approximately €757 billion annually, or €94 per capita, equivalent to slightly less than 1% of global GDP in 2025. The composition of global water infrastructure needs reveals important insights into the nature of the challenge. Nearly half of the total requirement, about €5.3 trillion, is tied to the expansion of new infrastructure, corresponding to €352 billion per year, largely reflecting the scale of the infrastructure access gap in low- and middle-income regions. A further €4.8 trillion, or 40% of the global total, is allocated to infrastructure renewal. These expenditures, amounting to approximately €323 billion per year, are directed towards revamping existing infrastructure, mostly in middle- and high-income regions, to improve efficiency and climate resilience. Sustainability-focused investments, designed to scale up water reuse and circularity, account for another 10% of the overall need, or about €1 trillion, translating to an annual requirement of €65 billion. Finally, about €300 billion is directed towards innovation, encompassing advanced technologies such as robotics and artificial intelligence (AI). While representing a smaller share of total expenditure, these investments are less capital-intensive yet expected to deliver disproportionately high returns in terms of efficiency gains. When disaggregated along the value chain, midstream infrastructure dominates the picture, absorbing roughly €6.2 trillion, or 55% of the global need. This figure is largely driven by the substantial investments required to extend and upgrade networks to connect populations to safe water and wastewater services. Upstream investments represent about €3 trillion, or 25% of the need, reflecting the urgency of securing safe water sources for all. The downstream stage accounts for the remaining 20%, or €2.2 trillion, required to expand and modernize treatment facilities to enable water reuse and to reduce pollution. The distribution of investment needs is not uniform across regions. Asia accounts for the largest share, with an estimated €5.2 trillion, equivalent to 46% of the global requirement. Providing access to basic water and wastewater infrastructure drives much of the investment need, while water stress is pushing many countries to actively engage in reuse activities, requiring substantial investments to upgrade wastewater treatment plants and build dedicated networks. Europe and North America together demand substantial resources, requiring €1.7 and €1.8 trillion, respectively, or about 30% of the global gap. In both regions, the dominant need lies in modernizing ageing systems to enhance efficiency and ensure long-term infrastructure resilience, alongside a strong push to upgrade wastewater treatment plants and address emerging contaminants such as per- and polyfluoroalkyl substances (PFAS) in drinking water. Africa and the Middle East contribute close to €1 trillion, representing around 15% of the global total. In Africa and lower-income Middle Eastern countries, more than two-thirds of resources are expected to be directed towards the expansion of new infrastructure, reflecting the urgent imperative to close persistent access gaps. This investment also offers the chance to adopt innovative technologies from the outset, rather than relying solely on traditional systems, potentially achieving faster and more efficient improvements. To bridge this gap by 2040, annual investments would need to grow by an additional €431 billion per year, representing an increase of around €54 per capita. Methodology BOX 1 Purpose and scope: This white paper quantifies the global water infrastructure gap in the 2025- 2040 timeframe. The analysis focuses on utility- managed infrastructure; and domestic, municipal and industrial water and wastewater systems. It excludes agriculture and privately managed assets, whose financing and governance structures differ substantially. Analytical approach: The gap is defined as the difference between the investment needs projected to meet 2040 targets and the baseline spending under current policy trajectories. Data and coverage: The model covers 100 representative countries across seven regions – Europe, North America, Latin America, the Middle East, Africa, Asia and Oceania. Data sources include Global Water Intelligence (GWI) databases and a series of expert interviews with utilities, regulators and financiers. Investment gap closing goals: Investment needs are structured around four key goals that align with the sector’s long-term transformation agenda: (1) achieving universal access to safe drinking water and basic sanitation for all; (2) revamping ageing assets at optimal replacement rates and reducing leakages to acceptable levels; (3) achieving high water reuse rates; and (4) deploying smart and advanced technologies across assets and networks in urban areas. These drivers are applied across the upstream (water sourcing and treatment), midstream (water distribution and wastewater collection) and downstream (wastewater treatment and reuse) stages of the value chain. Bridging the €6.5 Trillion Water Infrastructure Gap: A Playbook 8