The first phase will cost $610 million for the poorest countries, according to the International Development Association (IDA).
It was learnt that water scarcity and variability have posed significant risks to all economic activities, including food and energy production, manufacturing and infrastructure development.
Other countries in the Niger Basin that would benefit from the fund are Benin, Burkina Faso, Cameroon, Chad, Côte d’Ivoire, Guinea, Mali and Niger.
The World Bank Group, which announced the fund, said that the gesture would be a significant boost in funding for water programmes in Kenya, the Niger River Basin and Morocco, to help tackle inherent challenges.
The move came as World Bank Group Vice President for Sustainable Development, Laura Tuck, warned that in just 35 years, 40 per cent of the global population would be living in water-scarce countries compared to 28 per cent in 2015.
Tuck said at the climate talks, COP21 in Paris, France, that overall water stress was increasing, because of climate change combined with population growth.
He noted that poor water management could exacerbate the effects of climate change on economic growth. On the contrary, he added that if water was well managed, it could go a long way in neutralising the negative impacts.
A key initiative announced by the bank group was a $500 million investment to support India’s $1 billion programme to improve management of its groundwater.
India is the world’s largest consumer of groundwater.
The funding, subject to approval from the bank’s board of executive directors, will help with institutional reforms, build up capacity and develop infrastructure.
Senior Director for Water, World Bank Group, Junaid Ahmad, said: “Water is so fundamental to life and to economic development and it’s vital we tackle these issues, particularly in the developing world, where water stress is already exacting a price on people and economies.”
In Mombasa, the coastal region of Kenya, water demands largely exceeds supply, with climate variability, droughts and floods taking its toll on poor people.
The World Bank Group is funding a significant portion of the cost of a $500 million government programme to boost water security and build climate resilience.