Unlocking the Nexus: How Policy, Finance, and Capacity Support Can Come Together

To transform the energy-water nexus from a pressure point into a climate solution, we need integrated action across three key areas:

1. Policy: Enabling Climate-Resilient Infrastructure and Systems Thinking

Governments and regulators play a critical role in mainstreaming the energy-water nexus into climate adaptation strategies. This means embedding systems thinking into planning processes—understanding how energy and water systems are interdependent, especially under stress from climate extremes.

For example, as countries are updating their Nationally Determined Contributions (NDCs) and rolling out clean energy transition plans, there’s a need to incorporate water availability and demand for different clean energy sources, especially in water-scarce places. Incentivizing co-located infrastructure, like data centers near renewable energy hubs or wastewater plants with energy recovery, can enhance grid stability, reduce emissions, and lower operational costs—yielding both climate and economic benefits.

2. Finance: Mobilizing Capital and De-risking Innovation

The World Bank estimates that the global financing need for water-related infrastructure will reach US$ 7 trillion by 2030. Yet, despite this immense demand, the water sector attracts less than 1% of global climate tech investment. This funding gap constrains innovation and limits access to transformative solutions, especially for underserved regions. New business models—like energy-as-a-service or irrigation-as-a-service—can expand access to clean energy and efficient water technologies without large upfront costs, making them viable for rural and low-income users.

Equally important are de-risking tools—such as blended finance, risk guarantees, Results-Based Financing, project aggregation, concessional finance, and technical assistance—which can help utilities and local governments adopt new technologies that would otherwise be seen as too risky or costly.

3. Capacity: Empowering Communities and Building Local Ownership

For policy and finance to translate into real-world impact, community engagement and capacity-building are essential. Solutions that work on paper can fail on the ground without local buy-in. Participatory planning, education, and training help ensure that energy-water innovations are tailored to the context, understood by users, and maintained over time.

Empowering women, youth, and marginalized groups is also a powerful multiplier. When communities are equipped to lead, outcomes are more inclusive and sustainable. The ACCESS project in Indonesia and Timor-Leste offers a strong example. It trained local operators—almost half of them women—to manage solar-powered systems that deliver both electricity and clean water. Participants gained the skills to operate and maintain critical infrastructure. These efforts not only improved service reliability but also generated local income. By equipping women to lead, the project strengthened both the technical and social foundations of energy-water resilience.

Powering a Resilient, Sustainable Future

The energy-water nexus is not just a challenge—it is a strategic opportunity to address climate change, advance sustainable development, and improve the lives of billions. When we manage water more efficiently, we save energy. When we modernize energy systems, we can deliver water more reliably and affordably. And when we connect these efforts, we unlock climate resilience, economic opportunity, and social equity.

Solutions exist. Technologies are ready. What we need now is bold vision, strong leadership, and collective action to scale these innovations where they’re needed most. With the right partnerships and commitment, the Asia-Pacific region can lead the way in building a climate-resilient, energy-efficient, and water-secure future—for everyone.

Authors

Ying Zhang, Regional Energy Specialist, Asia Pacific

Yusuke Taishi, Senior Technical Advisor, Climate Change Adaptation