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Enhancing the Economic Regulatory System for Moldova’s Water Supply and Sanitation

image of Enhancing the Economic Regulatory System for Moldova’s Water Supply and Sanitation

This report aims to support the development of a sound economic regulatory system for the water supply and sanitation (WSS) sector in the Republic of Moldova (hereafter “Moldova”). The prevailing policy framework calls for drastic developments in WSS to modernise and optimise WSS systems and improve operational efficiency (non-revenue water, staff-output ratios etc.) – in line with domestic and international commitments (including the Association Agreement with the European Union, the Sustainable Development Goals, the Paris Agreement and the national WSS strategy). This report outlines ways and means for strengthening the capacity of the Moldovan government to provide sound regulation and that of WSS operators to deliver higher standards of service while ensuring the affordability of WSS services. Such a transition cannot happen overnight. It requires a sound economic regulatory system conducive to affordability, cost recovery and debt servicing, and a realistic performance improvement path for water utilities.

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Good practice and country experience

This chapter discusses good practice and experience potentially applicable in the Republic of Moldova from selected reference countries. Chile has a highly advanced regulatory system. Kazakhstan, a former country of the Soviet Union, has embarked on comprehensive regulatory reform. The Netherlands, which regionalised water supply in the mid-1970s, is also known for its multistakeholder approaches and special social instruments. The Flanders region of Belgium is known for its advanced system of tariff-related social measures. Good practice in economic regulatory systems does not provide for practices that may simply be copied. The examples merely illustrate the importance of transparency, dialogue and how instruments should fit with policy objectives and with regulatory capacity.

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