Groundwater is an important source of water for irrigation and as its exploitation has increased tremendously over the last two decades, both through public and private sectors, a number of development schemes have been assisted financially by several international donors, including the World Bank. It has been estimated that the Bank has lent about US $1.4 billion for groundwater development of which about US $450 million has been for projects in the public sector with the remainder going to schemes in the private sector through agricultural credit.

The Bank's project cycle consists of the identification of a scheme, its detailed preparation, its appraisal, an assessment of its economic and financial viability and a review of the institutions involved. Finally, the Bank's Executive Directors will approve the loan subject to the recommendations of the appraisal mission.

The Bank has gained considerable experience in ground-water development schemes through lending, and in countries where suitable resources and institutions exist, the Bank has successfully supported work in both the private and public sectors. In the design of new schemes no undue risks are taken and only proven technology is used; new technology must first be tested on a smaller scale.

Before development of communal schemes it is often vital that a Water Users Group is formed to correctly administer the scheme. In many countries it may also be necessary to establish a legal framework for groundwater use, although it is recognized that there are considerable difficulties in enforcing such laws.

Groundwater schemes financed by credit require careful monitoring and technical support as some borrowers do not fully complete their commitment due to technical or other difficulties. In addition, there should also be some mechanism to assist those borrowers whose investments end in failure. Increased attention should also be given to the operation and maintenance (O&M) of schemes; in particular, borrower governments should be urged to budget for O&M.

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