AIIB to expand water financing in India amid El Niño-driven drought
AIIB to expand water financing in India amid El Niño-driven drought
IN · Published Sep 26, 2026
• The Asian Infrastructure Investment Bank (AIIB) plans to increase its water financing portfolio in India as El Niño conditions worsen, leading to the driest monsoon since
• India is facing a 15% monsoon rainfall deficit this season, with states like Maharashtra and Karnataka reporting drought-like conditions. AIIB has approved $13.8 billion in financing for India, with less than 7% allocated to water projects. The bank aims to fund water infrastructure, industrial wastewater recycling, and groundwater recharge projects. It also seeks to attract private capital to the water sector, which is currently 85% publicly funded.

Impact & Risks

The worsening El Niño conditions and monsoon deficit are threatening India's agricultural sector, which consumes 80% of the country's freshwater. Drought-like conditions in Maharashtra and Karnataka are affecting reservoir levels and water availability. The lack of adequate water infrastructure could exacerbate food security issues and economic challenges. AIIB's focus on water financing aims to mitigate these risks but requires significant private sector involvement.

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