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OP 4.07 - Water Resources Management

These policies were prepared for use by World Bank staff and are not necessarily a complete treatment of the subject.
OP 4.07
February, 2000

Note:  This document, which replaces the version dated July 1993, is based on Water Resources Management: A World Bank Policy Paper (Washington, D.C.:  World Bank, 1993) and is consistent with Rural Development from Vision to Action, a Sector Strategy (1997).  It complements OP/BP 4.01, Environmental Assessment; OP/BP 4.02, Environmental Action PlansOP/BP 4.10, Indigenous PeoplesOP/BP 4.12, Involuntary ResettlementOP/BP 7.50, Projects on International Waterways; and GP 14.70, Involving Nongovernmental Organizations in Bank-Supported Activities.  

Questions may be addressed to the Director, Rural Development (RDV). 

1.  Bank1 involvement in water resources management entails support for providing potable water, sanitation facilities, flood control, and water for productive activities in a manner that is economically viable, environmentally sustainable, and socially equitable.

2.  The Bank assists borrowers in the following priority areas:

(a)  Developing a comprehensive framework for designing water resource investments, policies, and institutions.  Within this framework, when the borrower develops and allocates water resources, it considers cross-sectoral impacts in a regional setting (e.g., a river basin).

(b)  Adopting pricing and incentive policies that achieve cost recovery, water conservation, and better allocation of water resources.

(c)  Decentralizing water service delivery, involving users in planning and managing water projects, and encouraging stakeholders to contribute to policy formulation.  The Bank recognizes that a variety of organizations--private firms, financially autonomous entities, and community organizations--may contribute to decentralizing water delivery functions.  Thus it supports projects that introduce different forms of decentralized management, focusing on the division of responsibilities among the public and private entities involved.

(d)  Restoring and preserving aquatic ecosystems and guarding against overexploitation of groundwater resources, giving priority to the provision of adequate water and sanitation services for the poor.

(e)  Avoiding the waterlogging and salinity problems associated with irrigation investments by (i) monitoring water tables and implementing drainage networks where necessary, and (ii)  adopting best management practices to control water pollution.

(f)  Establishing strong legal and regulatory frameworks to ensure that social concerns are met, environmental resources are protected, and monopoly pricing is prevented. The Bank requires legislation or other appropriate arrangements to establish effective coordination and allocation procedures for interstate water resources. These issues are discussed in the project documents.

3.  Individual water lending operations are explicitly linked to the country's priorities for reform and investment and to the Bank's program of support.

4.  If inadequate progress by borrowers in these priority areas leads to serious resource misuse and hampers the viability of water-related investments, Bank lending is limited to operations that provide potable water for poor households or conserve water and protect its quality without additionally drawing on a country's water resources. 


  1. "Bank" includes IBRD and IDA, and "loans" includes IDA credits and IDA grants.


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