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Spatial Information Systems are very promising tools for development. Their use in the developing world, especially in areas of water resources management and environmental management (river basin management, service delivery, water quality, air quality), poses unique challenges that one does not generally face in more developed countries. The paper/presentation will set the broad context of developmental challenges in water and environment from an international development support institution perspective and what kind of crucial role GIS and other spatial technologies can play in addressing these as we look ahead. This paper will explore these unique challenges (institutional, policy, infrastructural, technical, financial), drawing on examples from the developing world, and indicate how these concerns can be addressed. The possible role of various stakeholders in providing an enabling environment for improving public awareness and supporting decision and fully realizing the promise of these tools will be discussed.