The Inter-American Development Bank (IDB) will provide an $81m loan to the Bahamas to overhaul major parts of the water infrastructure in New Providence.
The 25-year loan will be used to improve water pressure, quality and capacity for 38,000 households in the area.
The five-year programme will reduce the amount of water lost through leakages, conserve drinking water and improve financial sustainability for local water suppliers.
On completion of the project, a total of 6,000 leaks will be repaired and 9,000 new water connections will be activated.
The programme will also involve rehabilitation of broken sewerage infrastructure and drawing up a master plan to address wastewater collection and treatment in New Providence.