With climate change putting huge pressure on water use in Central Asia, Evgeny Vinokurov, Chief economist of the Eurasian Development Bank, explains how the Bank is helping to tackle one of the region's biggest problems.

Environmental Finance (EF): What are Central Asia's sustainability challenges?

Evgeny Vinokurov (EV): Access to safe drinking water and adequate water supply for irrigation are global issues, but they are particularly acute in Central Asia.

The Eurasian Development Bank estimates that the region may face a chronic water shortage by 2028. This will have significant inter-regional implications, particularly given that Central Asia is one of the most vulnerable to climate change due to the region's reliance on mountains glaciers as a water resource. As a result, year by year, the region is experiencing a decline in water availability while demand continues to rise. This is a bad equation, and a challenging long-term issue.

The region must address this issue, with the assistance of international organisations. There is a limited window of opportunity for solution. We have only four or five years and a significant action is required at both the country level and regional cooperation.

Agriculture consumes 104km3 for irrigation purposes out of the 127km3 of the total average annual water supply, with 40% of this being lost en route to the fields. This wastage can be reduced by around 1km3 per year, which, while it may not seem significant, could have a big impact. Likewise, the implementation of digital water meters could result in savings of approximately 10km3 per year if introduced comprehensively.

More comprehensive regional cooperation that satisfies upstream and downstream countries could also help to resolve the issue. Last year was a milestone for us, as several Central Asian countries officially acknowledged the urgent situation and introduced comprehensive state water-saving programmes. This gives me strong hope that the region will not face a chronic deficit.

EF: What impact has this research had on raising awareness of the issue in the region?

EV: Over the past three years, the Eurasian Development Bank has published a series of reports examining separately the estimated investment required for modern energy in the region, low-carbon connectivity in Central Asia, how the region should regulate regional water flows, and how to save water and introduce modern irrigation technologies. We have just published new research on drinking water and sanitation in the region. Drinking water accounts for only 7% of total water consumption in the region what importance these 7% bear for the rapidly rising cities! The pace of urbanisation in Central Asia is twice the world average.

The research has raised awareness and help structure dialogue among leading stakeholders in the international community, including, most importantly, states but also UN organisations and multilateral development banks such as the World Bank, Asian Development Bank, and Islamic Development Bank. We have a vibrant financial community in the region that engages in dialogue and shares research. We also called for urgent action at the highest levels of government and held discussions with the key ministries in Kazakhstan and Kyrgyzstan.

EF: How else is the Eurasian Development Bank promoting sustainability in the region?

EV: As a multilateral development bank (MDB), we have a mandate to promote sustainable development as a primary goal. We apply a rigorous environmental and social framework (ESF) to all our prospective investment projects, and the ESF ensures that each prospective project complies with common MDB principles, internationally acknowledged standards and conventions. The framework also includes a list of areas and sectors that proscribes us what we do in terms of our environmental and social requirements. We support Central Asian countries in their quest for sustainable growth and the low-carbon transition and in complying with best practices.

Secondly, we provide finance for a wide range of green projects. Our portfolio of green projects is now approximately $1 billion, which is a notable achievement for a regional development bank. This upward trajectory is set to continue. Last year, we obtained observer status to the United Nations Framework Convention on Climate Change and recently signed the Principles of Responsible Banking within the framework of the UN Environment Programme Finance Initiative.

EF: What are your next steps in driving change in the region?

EV: Water is a complex issue that requires complex solutions, so we are pursuing a systemic approach that proceeds like the following: first, underlying research; second, technical assistance; third, commercially viable projects.

We also support dialogues between governments and companies all along the way. We aim to promote partnerships. The reason is that the financing needed for sustainable development and water in Central Asia is significantly greater than the combined resources of all development banks and states. That is why we should ensure that development banks coordinate their work in the region.

We will continue to invest in renewable energy sources and provide transition finance to all our member states on the decarbonisation journey, which is a substantial part of our portfolio. We have also built our knowledge and facilitated knowledge exchange over the past few years, which is now beginning to bear fruit by providing inputs for government programmes and commercial projects.

To find out more about the Eurasian Development Bank research and work on sustainable development in the region, see eabr.org/en