Financing water resilience to face climate challenges

As we navigate the ever-increasing effects of climate change on our water resources, the importance of water preservation and innovation cannot be overstated.


At the Council of Europe Development Bank we are committed to promoting inclusive and resilient living environments, which involves safeguarding our water systems. 

“CEB partners with member countries' national and local authorities, as well as utilities to improve the quality and performance of urban water and sanitation systems, to ensure that every European citizen has appropriate access to such basic services while protecting the environment,” said Jérôme Costanzo, Technical Advisor at the CEB. 

On the occasion of the World Water Week 2023 we delve into some of the CEB's projects that exemplify our dedication to creating a more water-wise future.

Larnaca: enhancing water sustainability in Cyprus 

Water scarcity has always been a serious problem for Cyprus. It is not unusual for the country to experience consecutive dry years but the climate change has led to more frequent droughts. This, coupled with increased demand from tourism, is worsening the water scarcity problem on the island.

Located on the southern coast of Cyprus, the city of Larnaca is one of the key economic and commercial centres on the island, with the country’s international airport, an international port, important commercial and industrial enterprises and a well-established tourism industry.    

Through substantial financial backing of €95.6 million since 1998, the CEB has empowered the Larnaca Sewerage and Drainage Board (LSDB) to significantly improve the technology and infrastructure in the city in order to address issues of sustainability more effectively. A new CEB loan of € 48 million is now envisaged to allow for the extension of LSDB’s urban sewerage network to unserved southern outskirts of Larnaca.  

LSDB is the authority responsible for constructing, operating and maintaining the sewerage and drainage infrastructure in the wider area of metropolitan Larnaca. Previous CEB financed project phases have directly benefitted 66 500 residents of Larnaca so far and the city has achieved the remarkable feat of collecting and treating 100% of its wastewater.  

The result? Protection of surface and underground water resources, alongside preserving the marine ecosystem. Furthermore, the CEB-supported project further increases wastewater recycling, ensuring a reliable alternative for agricultural, livestock, and green area irrigation. This sustainable approach plays a crucial role in conserving scarce water resources in the face of climate vulnerabilities. Additionally, the unexpected benefits to wildlife preservation, particularly the annual congregation of migratory birds on the artificial treated wastewater ponds, underline the positive impact of such initiatives.  

Similar projects have also been supported by the CEB in the Cypriot cities of Nicosia, Limassol, Pafos and Ayia Napa-Paralimni. Since the 1970s, CEB funds have been used to construct drainagenetworks, bring drinking water to communities or build new sewerage systems across Cyprus.

“In the face of mounting climate challenges, the CEB has been a steadfast partner in supporting Cyprus’ major municipalities to better manage their water resources. 

With this Project in favour of Larnaca Sewerage Board CEB upholds its important funding role in a country which is a particularly water-deficient region of the European Union,” said Country Manager for Cyprus, Sylvie Anagnostopoulos. 

Kaunas: improving water infrastructure in Lithuania

Kaunas waterfront

Next we look at the city of Kaunas, currently engaged in wastewater modernization as part of its focus on achieving sustainable development goals.  

The water infrastructure has been improving since Lithuania’s accession to the EU in 2004 but there are still challenges. With a €28.8 million loan from the CEB approved in January 2021, Kaunas Water Company aims to reduce the city’s use of surface and groundwater. This will be achieved through the upgrading of the water and wastewater infrastructure and rainwater system in the city. Simultaneously, the project aims to improve the quality and availability of water services, ensuring a better and healthier living environment for its residents.  

“This CEB loan approved directly to water municipal company contributes to improving municipal services, which is part of basic living conditions and quality of life for the citizens,” said Diana Bertje, Country Manager for Lithuania.  

This project builds on an ongoing CEB collaboration with Kaunas, further strengthening the partnership. With the assistance of the CEB loan the project helps to renovate facilities that have depreciated by almost 50%, and improve water quality for the almost 340,000 residents that the company serves.  

“During the recent progress monitoring it was concluded that, following CEB supported investments in Kaunas, overall quality of the drinking water increased significantly, while the water supply and wastewater network benefitted from needed reconstruction and several new extensions were built,” Diana Bertje added.