In a number of countries in the EBRD regions the level of asset care is often insufficient to sustain service quality in the water sector. Consequently, service provision can be unreliable and refurbishment can be reactive and costly. But more careful investment and maintenance choices will depend on understanding budget constraints, infrastructure performance and risk appetites. This paper proposes the adoption of advanced asset management practices that could help water and wastewater utility operators to improve their competitiveness and become more sustainable in operational terms. In addition, it highlights how the private sector could potentially facilitate this change by introducing new ideas and disciplines. This publication is part of a series of policy papers financed through the EBRD's Infrastructure Policy Preparation Facility (IPPF). While this document focuses on the water and wastewater sector, the principles and benefits of sound asset management that are presented here are equally relevant to other infrastructure-intensive sectors.