
Yemen is one of the most water-scarce countries in the world. The country has about 120 cubic meters (m³) of renewable internal freshwater resources available per capita - just 2 percent of the global average. There is no perennial surface water and the country depends entirely on rainfall, groundwater and flash flooding. Market-led irrigation, which accounts for 90 percent of the total water use, is drawing groundwater at unsustainable levels. Those who can afford it resort to buying water from generally informal and unregulated private markets, mostly in urban areas.

To address these challenges in the past, IDA and other donors have invested in stand-alone projects as well as community-based micro-projects supported by the Yemen Social Fund for Development (SFD). While these investments have achieved results, donors have moved recently toward a broader approach that seeks to build capacities within various ministries and support long-term change, as articulated in Yemen’s national water sector strategy.

- Between 1997 and 2005, 772 small water supply sub-projects financed by the SFD benefited approximately 2 million people in remote communities. The proportion of urban residents with access to safe water has increased from 65 percent in 1997 to 86 percent in 2007. In rural areas, access has gone from 25 to 45 percent in the same period.
- Improved irrigation between 2000 and 2009 generated annual water savings of 50 million m³. About 41,000 hectares of farmland have been provided water through piped conveyance systems, of which about 1,700 hectares have been irrigated by modern irrigation systems.
- In urban water supply and sanitation, IDA-supported projects have increased reliability and reduced unaccounted-for-water in Sana’a, Hodeidah, Mukallah, and Taiz. Unaccounted-for-water has dropped from 44 percent in 2001 to 35 percent in 2009 in Sana’a, from 39 to 28 percent in Mukallah, and from 45 to 30 percent in Taiz. Reliability as measured by cubic meters provided per day per connection has also improved significantly.
- As part of an institutional reform program supported by donors, a new Ministry of Water and Environment was created in 2003 to bring most water institutions under one umbrella, though irrigation and watershed management remain with the Ministry of Agriculture and Irrigation.
- A US$4.4 billion, seven-year National Water Sector Strategy and Investment Plan (NWSSIP) was prepared in 2005 and updated in 2008 with support from IDA, Germany, DFID, and the Netherlands, paving the way for increased investment to attain the MDGs, more equitable water distribution and integrated management of groundwater, among other things.

Examples of IDA-supported activity during the last decade have included:
- Urban water reform: Sana’a Water Supply and Sanitation project (US$24 million, 2003-2009) and Urban Water Supply and Sanitation project (US$150 million, 2002-2010)
- Demand-driven approaches: Rural Water Supply and Sanitation Project (US$40 million, 2000-2009) and Yemen Social Development Fund (US$75 million for phase III, since 2004)
- Basin planning: Support to the National Water Resources Authority in establishing representative basin committees armed with accurate information on water balance and projections made by computer simulation basin models based on the meteorological and groundwater data collected by field staff. Sana’a Basin Water Management Project (US$24 million; 2003-2009)
- Improved water use efficiency: Groundwater and Soil Conservation Project (US$55 million; 2004-2011) and Irrigation Improvement project (US$21 million; 2000-2008)
More recently, IDA committed US$90 million to a multi-donor Water Sector Support project (WSSP; US$340 million, 2009-2014) that supports the government’s national water strategy.

There is a strong partnership among key development partners in Yemen’s water sector. Periodic meetings led by the Ministry of Water and Environment and the three most active donors (IDA, Germany and the Netherlands) help coordinate investments and analytical work.
IDA’s US$90 million credit for WSSP, is complemented by US$60 million from Germany, US$48 million from the Netherlands, and US$141 million from the Government of Yemen. Coordinated support is expected to increase the momentum of sector reforms while promoting improved transparency and accountability in national systems.

Implementation of the WSSP is set to begin late 2009 to help tackle both inefficient irrigation use and water service delivery issues. This US$340 million project, backed by IDA and other donors, is not, in itself, sufficient to meet Yemen’s strategic goals of reducing water stress and meeting the MDGs. But unprecedented innovations including harmonization of donor procedures and the application a Governance and Anti-corruption component in the WSSP, may turn the project into a catalyst for change by attracting other donors (from the Gulf Cooperation Council for example) and acting as a model which Yemen could scale up through its own sovereign and end-user financing sources.