Leakages in water distribution systems (WDSs) profoundly affect their operations, elevating water production demand and treatment and pumping costs. Moreover, they strain the energy system by increasing power requirements at pumping stations. In regions heavily reliant on hydropower, such as Brazil, there is a nuanced implication: diminishing reservoir water levels due to increased WDS flow withdrawal. This not only immediately affects hydropower generation by reducing available head but, over time, may lead to interruptions in hydropower generation. This paper investigates the water–energy nexus, specifically focusing on WDS leakages in Brazil. It begins with an overview of the current situation and future outlook, considering evolving policies to enhance WDS efficiency and also the evaluation of different climate change scenarios. A more in-depth case study explores a reservoir utilized for both energy and water production. In this context, leakage management assumes critical importance, given the various water uses within the reservoir that impact the available energy and water resources. Overall, this study offers a comprehensive perspective on the water–energy nexus within WDSs, underscoring the critical importance of leakage control and its direct and indirect consequences, particularly on energy generation capacity, the environment, and the economy.