Surging populations and economies in the developing world will cause a double crunch in demand for water and energy in the coming decades, the UN says.
In a recent report, the UN said the cravings for clean water and electricity are intertwined and could badly strain Earth's limited resources.
"Demand for freshwater and energy will continue to increase over the coming decades to meet the needs of growing populations and economies, changing lifestyles and evolving consumption patterns, greatly amplifying existing pressures on limited natural resources and on ecosystems," the report said.
Already, 768 million people do not have access to a safe, reliable source of water, 2.5 billion do not have decent sanitation and more than 1.3 billion do not have mains electricity.
About 20 per cent of the world's aquifers today are depleted, according to the report.
Agriculture accounts for more than two-thirds of water use.
The World Water Development Report, the fifth in the series by the UN Educational, Scientific and Cultural Organisation (UNESCO), is an overview collated from data from scientific studies and investigations by agencies.
It said that ever more freshwater will be needed for farming, construction, drinking, cooking, washing and sewerage, but also for energy production -- 90 per cent of which uses water-intensive techniques today.
The report warns that global water will likely increase by 55 per cent over the next four decades, and by 2050 more than 40 per cent of the world's population will live in areas of "severe" water stress which mostly will be in a region reaching from North Africa, through the Middle East to western South Asia.
Asia will be the biggest hotspot of tension over water extraction with water sources straddling national borders.
Worldwide, energy demand is expected to rise more than a third by 2035 and china, India and the Middle East accounting for 60 per cent of the increase.
In 2010, energy production gobbled up 66 billion cubic metres of fresh water -- more than the average annual flow of the River Nile in Egypt. By 2035, this consumption could rise by 85 per cent, driven by power plant cooling systems that work with water.
Shale deposits and tar sands, driving an energy boom in North America, are especially hefty in their demands for water to force out the precious gas and oil, the report said.
Even so, "they are outstripped by far by biofuels," said researcher Richard Connor, who headed the study.
Renewable sources like solar and wind energy that use far less water are gaining ground, and accounted for about a fifth of global electricity output in 2011, the report said.
But they are unlikely to expand this share significantly if fossil fuels continue receiving the bulk of subsidies, it said.
Oil, gas and coal had subsidies of $US523 billion ($A576.47 billion) in 2011, nearly 30 per cent more than in 2010, compared to $US88 billion for renewables, the report said, citing International Energy Agency (IEA) figures.
Africa, Latin America and the Caribbean have plenty of potential for hydro-energy, which re-uses the precious resource, it added.
Hydro-electric dams have been extremely controversial. Big projects deliver gigawatts of power but critics say they are ecologically damaging and prone to massive cost over-runs.
The review called for a global effort in efficiency gains, pointing the finger at the arid countries of the Middle East where between 15 and 60 per cent of water is wasted through leaks or evaporation even before the consumer opens the tap.
The report also called for smart choices in allocating the trillions of dollars likely to be invested in water and energy infrastructure over the next two decades.