Alexander Martusevich,

1
National policy Dialogue on Financing Strategy
for Rural Water Supply and Sanitation

• Alexander Martusevich,
• Environment Directorate
• EnvGlobalisation Division

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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

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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!

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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

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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

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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

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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)

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Present project

• Present 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

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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.

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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