As demand for water grows, the world must focus on how the precious resource will be shared among farmers, the energy sector and cities if it is to achieve the United Nations' new development agenda, a World Bank expert said.

The world faces a 40 percent shortfall in water supplies in 15 years due to urbanisation, population growth and growing demand for water for food production, energy and industry, according to a United Nations report published in March.

The U.N. Millennium Development Goals (MDGs), which had focused attention on the needs of poor nations for the past 15 years, included boosting access to clean water and sanitation.

The Sustainable Development Goals, due to be adopted at a U.N. summit in September to replace the MDGs, broadens water from a narrow access issue to a "fundamental rethink" of how it is managed, said Junaid Ahmad, director at the World Bank's water global practice.

"We're headed into a perfect storm in which over the next 20 years we will see the demand for water growing significantly, driven by thirsty agriculture, thirsty energy and thirsty cities," Ahmad said on Sunday on the sidelines of a global water conference in Stockholm.

"If we are to achieve these goals of food and energy security, sustainable urbanisation, and ensure service delivery of water and sanitation to citizens, we now need to figure out how water is going to be allocated across sectors."

Some 2.6 billion people have gained access to clean water since 1990, but more than 660 million still live without access, say UNICEF and the World Health Organization.

Ahmad said achieving the new water goal and scaling up access means not only building pipes, but also fixing institutions and improving governance.

Another challenge, he said, is putting a price on water.

"We are in a world in which we are trying to price carbon, but we do not know how to value water," he said, adding that because water is a human right, there is an assumption that it should be free.

"Free water is probably the most expensive water for poor people, because whenever you give out free water it's captured by the politically powerful, not by the poor."

Other challenges include climate change, which has made the water supply patchy, and the management of groundwater.

"Groundwater is the biggest source of stored water that we have, and yet it has been progressively abused", extracted at a faster rate than it is being recharged, he said.

More than 2 billion people still lack access to toilets, but Ahmad is optimistic that the new goal of universal sanitation coverage by 2030 can be achieved.

"It took developed countries many years to achieve universal access," he said, noting that a World Bank simulation showed countries such as France took 25 to 30 years to provide toilets for everybody.

"If we look at history and the pace in which developed countries have changed, then what developing countries are doing today is pretty historic. They are catching up at a very fast rate."