The Asian Development Bank says poor water supply and sanitation in Kiribati are costing the country up to four per cent of its gross domestic product every year.
A new report has made the economic estimate to guide reforms and boost urban development in the densly populated South Tarawa area.
It says the low-lying atoll has limited freshwater resources which are easily contaminated, and residents receive piped water for only two hours every two days because of high leakage from the system.
The report says poorly functioning sanitation systems and practices are polluting the groundwater and the marine environment.
Health officials say with three outbreaks of diarrheal disease every year and high infant mortality rates, vulnerable groups have the most to gain from money spent on improved water services in Kiribati.
