Tuvalu normally receives 8-16 inches of rainfall each month but hasn't had significant rain in six months.
UNICEF New Zealand and the government of New Zealand are sending a solar-powered desalination unit to Tuvalu to prevent one of the main schools from closing for lack of water.
"The U.N. recommends that people should be able to access 100 liters of water each a day but the drought in Tuvalu has limited this to as little as 25 liters a day," said Hamish Lindsay, UNICEF New Zealand programs manager.
The system can provide about 6,000 liters of drinking water a day from sea water, without fuel costs, enough for the school's 600 students.
Amid its water shortages, the tiny archipelago of nine islands, with a combined land mass of just 10 square miles, also faces being inundated by rising sea levels linked to climate change.
Most of Tuvalu lies less than 3.28 feet above sea level and its widest stretch from one coast to the other is about 1,312 feet.
Projections from the Intergovernmental Panel on Climate Change indicate that over the next century sea levels will rise by up to 2.62 feet, making Tuvalu uninhabitable. It has a population of about 12,000.
"We believe that this [current crisis] is indeed the facts of climate change," said Pusinelli Laafai, chairman of Tuvalu's national disaster committee, The Guardian newspaper reports.
"We think [industrialized countries] have an obligation to help us, if not to restore what was damaged or taken away, at least to assist us in some sense, to mitigate the effects of what they have done."
Tuvalu's drought is largely attributed to La Nina, the climate phenomenon responsible for extreme weather patterns across many parts of the Pacific region.
"With climate change predictions pointing to more acute La Ninas in the futures, plans must also include assistance for communities that will be displaced if existing freshwater is not sufficient," said John Harding, U.N. International Strategy for Disaster Reduction head of policy.
In 2003 Tuvalu's Prime Minister Saufatu Sopoanga, addressing the 58th Session of the U.N. General Assembly, said that for his country, climate change is "no different to a slow and insidious form of terrorism."