The Federated States of Micronesia faces increasing pressure on its water supplies due to climate variability and future climate change impacts, particularly on remote islands like Ifaluk and Kosrae. To support long-term water security planning, a detailed economic and financial analysis of water supply options was undertaken, testing current and future service levels under various climate change scenarios. Water demand and supply models were developed, and a range of augmentation options were assessed based on capital and lifecycle costs, financing options, and affordability to communities.

Alluvium led the technical work, undertaking extensive in-country consultation and data collection, capacity building in cost-benefit analysis for government officials, calibration and modelling of rainwater supply systems, financial and risk assessments, and identification of climate financing pathways. We provided practical recommendations on sustainable water management, pricing principles, and investment strategies, equipping decision-makers with the tools needed to deliver resilient and affordable water services in a changing climate.