More frequent and severe climate shocks, coupled with demographic growth and rapid urbanisation, are putting increasing pressure on existing water infrastructure and services. Addressing these growing challenges requires bold, transformative action from both public and private sectors. This is especially the case for Latin America, which despite having the highest share of natural renewable water resources globally is particularly vulnerable to water risks. Without urgent and co‑ordinated action, the risks of water scarcity and pollution are poised to escalate, jeapordising the health and safety of communities as well as the economic viability of businesses that depend on water resources.
A circular approach to the water economy offers a promising solution to these challenges. By prioritising water reuse, recycling, and the recovery of energy and materials from wastewater treatment, circular water models can foster more efficient water use, minimise water loss, and enhance resilience to climate change, while providing business opportunities in the water industry. Technological advancements and digitalisation are making these models increasingly viable, generating new opportunities for innovation in water management.
Governments across Latin America are beginning to recognise the importance of transitioning to the circular water economy. However, significant barriers to scaling up these efforts persist, including inadequate regulatory frameworks, insufficient financial resources, a lack of awareness among key stakeholders, and conflicting uses of water, with impacts on access to water for households, agriculture and industry.
Building on an OECD/Inter-American Development Bank (IDB) Survey on Water and Circular Economy, this report offers new insights on the state of the circular water economy in Latin America. It also proposes a roadmap for accelerating the transition across the region, with concrete actions for strengthening policy frameworks, adapting financing tools, and engaging stakeholders to shape a more circular water economy. The report ultimately calls for a systems approach to water management, which mainstreams circular water principles across various sectors of the economy.
Moving forward, joined-up action is necessary to unlock the full potential of the circular water economy. This report aims to guide policymakers, water operators, and businesses as they navigate towards a more sustainable and resilient water future for Latin America and beyond.