Water both enhances and limits Central Asian economic development. Built during the 1970s and 1980s, the region’s water infrastructure is outdated and dilapidated. However, governments do not have enough funds to invest in improvement and the private sector is not interested due to property ownership and institutional issues. The situation has become more serious since the collapse of the Soviet Union, as financing of water infrastructure has been reduced by up to one-half.

Reconstruction of old and building new infrastructure will be critical for water sector development. The infrastructure in the water sector is public, with only local operation and maintenance responsibilities being transferred to water users. Therefore, the countries of the region should target effective and improved public-private partnerships for water infrastructure financing. These reforms should go hand in hand with water governance and management reforms. Only operationally efficient and holistic water governance and management systems can address water-related problems. This chapter analyzes the current state, future needs, and options for financing of the irrigation sector infrastructure in Central Asian countries.