Alexander Martusevich, Alexander Martusevich, Environment DirectorateEnvironment Directorate

Env&Globalisation DivisionEnv&Globalisation Division

National policy Dialogue on Financing Strategy for Rural Water Supply and Sanitation

EAP Task Force

Structure of presentation

Status of rural WSS and the challenge of achieving water-related MDGs in EECCA

Collective efforts to help achieve water-related MDGs in Armenia

Present project and previous EAP Task Force work on financing WSS infrastructure in Armenia

International institutions involved First mission and the kick-off meeting

EAP Task Force

Rural WSS: poor status in all EECCA

Infrastructure and service level continue to deteriorate, coverage reduces

In many cases the centralised water supply fully collapsed after liquidation of the soviet kolhoz-sovkhoz system

Main reasons:Despite low household income, often in kind, and widespread poverty in rural areas:

lack of strategic approach and attention from central Governments

little public funds allocated to the sector (compared to urban WSS)

poor, or lack of the appropriate institutional set-up(few exceptions, region or rural settlement specific) In most EECCA problems faced by Rural WSS are not even fully identified and understood!

EAP Task Force

Collective efforts to help achieve water-related MDGs

Achieving MDGs in rural areas is a big challenge! International support is needed

Key related international initiatives: EU WI (leaded by EC, DG ENV) Millennium Challenge Account (USA) Donors and IFIs

The present project in Armenia is undertaken in the framework of the EU WI EECCA component in co-operation with EAP Task Force and UN ECE

EAP Task Force

Collective efforts to help achieve water-related MDGs in Armenia

The present project inter alia aims to address specific requests from SCWS:

help develop a Financing strategy (FS) for rural WSS with water-related MDGs as targets

help to set “minimal amount of water supply” standard

The project will build upon the previous EAP Task Force work on financing WSS infrastructure in Armenia:

EAP Task Force

Previous EAP Task Force work

Financing strategy (FS) for urban WSS (focus on municipal wastewater collection and treatment)

Targets: increase coverage by the sanitation service, provide effective mechanical treatment of collected wastewater

Results: feasible scenario to rehabilitate municipal wastewater infrastructure, priority investment identified

EAP Task Force

Previous EAP Task Force work - 2

Implementing FS for WSS in Armenia, through:

Integrating it into the budgetary process and MTEF (Task 1)

Ensuring more effective use of available resources (Task 2)

Integrating ATP and WTP into tariff approval procedure (Task 3)

Adopting Financial planning tool for water utilities (FPTWU) (Task 4)

Extending the FS methodology to rural WSS (Task 5)

EAP Task Force

Present projectPresent project has a broader task:To launch a National Policy Dialogue (NPD) on how to finance achieving water-related MDGs, targets on WSS, and on IWRM

Inter alia it envisages: Developing a FS for rural WSS Costing of priority measures under IWRM Deriving aggregated financial figures for

water-related MDGs: total expenditure in 2005 - 2014 and supply of finance, financing gap and a package of policy measures to bridge the gap

EAP Task Force

International institutions involved

EU WI EECCA component lead by EC (DG ENV), Technical Secretariat (DHI & COWI)

EAP Task Force (WSS and financing) UN ECE (IWRM)

As soon as in 2007 the NPD in Armenia will focus on WSS and financial issues, other international players in Armenia will hopefully also be involved:

Donors (US AID and Millennium Challenge Account, UK DFID, JICA, JIBIC)

IFIs (WB, KfW, EBRD, ADB) EU WI Finance Working Group, etc.

EAP Task Force

First mission and the kick-off meeting

Key objectives: Inform local stakeholders about the project

(objectives, scope, milestones) Agree upon main topics of the policy dialogue

in 2007 (and potential topics afterwards) Establish Steering Group Agree upon roles and responsibilities of

different SG members Ask the SG for advise on some key variables

of policy scenarios

EAP Task Force