The Water-Energy Challenge Water and energy are interlinked. Significant amounts of water are needed in almost all energy generation processes, from generating hydropower, to cooling and other purposes in thermal power plants, to extracting and processing fuels. Conversely, the water sector needs energy to extract, treat and transport water. Both energy and water are used in the production of crops, including those used to generate energy through biofuels. Population growth and rapidly expanding economies place additional demands on water and energy, while several regions around the world are already experiencing significant water and energy shortages. Today, more than 780 million people still lack access to potable water, and over 1.3 billion people lack access to electricity.Will water constrain our energy future? Thirsty Energy Initiative In order to address challenges presented by energy and water resource planning, the World Bank launched Thirsty Energy in January 2014. It helps countries integrate water constraints into the energy sector and better address water and energy challenges. It does so by preparing countries for an uncertain future by: Identifying synergies and quantifying tradeoffs between energy development plans and water use Piloting cross-sectoral planning to ensure sustainability of energy and water investments Designing assessment tools and resource management frameworks to help governments coordinate decision-making and enhance sustainable development;Providing capacity building and knowledge transfer.Thirsty Energy demonstrates the importance of combined energy and water management approaches through demand-based work in several countries; and tailors approaches depending on the available resources, modeling experience, and institutional and political realities of a country. To ensure client ownership and successful integrated planning, Thirsty Energy focuses on building the capacity of relevant stakeholders and leveraging existing efforts and knowledge. Thirsty Energy in Action Thirsty Energy has been working in several countries. In South Africa the team has partnered with the Energy Research Center of the University of Cape Town (UCT) to fully incorporate water constraints in their energy planning tools. In Morocco, the team is working with ONEE (recently merged water and power government owned utility) to identify synergies and evaluate tradeoffs between energy and water resource planning. In China, the team is collaborating with the National Energy Agency (NEA) to incorporate potential water constraints in their upcoming 5 year energy plan 2016-2020. The case studies will be documented and shared, so countries facing similar challenges can address the water-energy issues and enhance sustainable development. In addition to ongoing work in the case studies noted above, Thirsty Energy has received interest from Mexico to conduct a workshop on the water and energy nexus. Collaborating Partnerships To achieve effective outcomes and share knowledge, the World Bank Group collaborates closely with other organizations and institutions. The team collaborates with several international organizations working on the topic such as the United Nations Sustainable Energy for All (SE4ALL), GIZ, SIWI, etc. Additionally, given the role of the private sector in energy and water management, a Private Sector Reference Group (PSRG) has been created as part of the initiative. The PSRG shares experience and knowledge to provide technical and policy advice and to scale-up outreach efforts. Abengoa, Alstom, Veolia and EDF are already members of the PSRG.