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The management of freshwater resources and related services is of critical importance to healthy social, economic and political well-being of a society. Stresses exerted on the world's water resources by the increasing demand from growing populations with changing consumption patterns and the destruction of water quality from pollution as a result of poor environmental management, are placing water increasingly higher on the international agenda, including that of climate change. Effective water resource management and developments impacting on water resources are recognised as key components of environmentally sustainable development. The negative consequences of poor water resource management on socio-economic development are more frequently arising. This is clearly apparent in the agricultural and other water-sensitive industries. However industries where water is less evident in the supply chain, and even other sectors such as energy, are becoming increasingly aware of the risks and consequences associated with a potentially unreliable water resource.

The European Union (EU), through the European Commission (EC) and the EU Member States, has made a significant contribution to the international debate on the impending world water crisis and the measures needed to address it. Their support has contributed to efforts at the international level with other state actors, through the UN system and in inter-ministerial councils, to promote new initiatives in water resource management.

The content of this Toolkit addresses the sustainable development of the Water Resources sector and contributes by translating the international consensus on sustainable water resources management into applicable development cooperation activities. The Water Project Toolkit is intended to be used by a wide range of stakeholders such as governments, members of the private sector including service providers, stakeholders in civil society, research, academia, other higher education institutions, and international organisations involved in development of water resources management.

The centrepiece of the Toolkit is a 'strategic approach for the equitable, efficient and sustainable management of water resources'. The approach is based on internationally agreed-upon core principles concerning the need to protect the environment and ecosystems, to provide access to the health-giving and productive properties of freshwater resources equitably, efficiently and sustainably among populations, with special attention to poorer and under-served beneficiaries. It provides a comprehensive framework for all activities relating to water resources development. Its application involves a holistic attitude towards water management, and the introduction of best practices consistent with the internationally agreed-upon core principles. The strategy covers the full cycle of the water resource management activity, from national policy-making through to implementation of programmes and projects and includes the subsequent operation and maintenance of services.

The application of the strategic approach facilitates an open and flexible programme process in which sensitivity to changing trends and local economic, social and environmental circumstances can be reflected. At each stage of the programming process, the Toolkit provides a set of practical checklists to enable the policy principles at the heart of the strategic approach to be put into effect in different programming contexts, to identify problem areas likely to be encountered and potential responses to these problems.

A number of common core activities emerge from the checklists, stressing the importance and attention which needs to be given to what are known as 'software' or sometimes non-technical issues. The priority attached to software activities within the overall approach can be seen as part of a strategy which integrates the software component and raises its importance to the same level as the 'hardware' issues (such as infrastructures).

Almost all these activities relate to a certain degree to management and institutional strengthening. They have been grouped under priority themes for action as follows: institutional development and capacity-building; participatory structures and gender equity; natural resource management; expansion of the knowledge base; demand management and sustainable cost-recovery; awareness-raising and communications. The application of such activities will contribute to making the design and management of water resources interventions more cost-effective, efficient and sustainable.

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