The southern Mediterranean region faces one of the most important water crises in the world. The combination of aridity, foreign dependency, climate change, misallocation of the resources and escalating human demand make water supply a primary issue for health, economy and poverty reduction. In this context, institutional reform of the water supply sector is of great interest. The aim of this study is to examine the water regulatory framework in southern Mediterranean countries and the development of private sector participation in the context of water crisis.