Ten Years of Water Sector Reform in Eastern Europe, Caucasus and Central Asia

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This report evaluates how well EECCA countries have done in ensuring people’s access to adequate water supply and sanitation services since their Economic, Finance, and Environment Ministers adopted the Almaty Guiding Principles to support such efforts in 2000. Besides looking at trends in the technical and financial performance of the water sector, the report analyses the results of institutional reforms at different levels of governance, as well as financing arrangements. Analysis focuses mainly on urban areas, but some of the challenges in rural areas are also examined. The report draws policy recommendations to help countries stem the decline in the sector’s performance that has occurred over the last decade, despite opportunities provided by rapid economic growth in many EECCA countries in this period.



Financial sustainability

This chapter reviews how the water and sanitation sector in EECCA countries has been financed over the last decade, examining each source of finance in turn. As set out by OECD (2009), there are three main sources of finance to cover the costs of delivering water and sanitation services: tariffs, taxes, and transfers from other countries in the form of official development assistance (ODA). These are referred to collectively as “the 3Ts”. In addition, repayable financing, from either public or private sources, may help close the financing gap during an intermediary period although ultimately they need to be repaid from revenues generated by the 3Ts. The chapter then stresses the importance of evaluating where financing is going to come from if the current situation of deteriorating assets and service quality is going to be reversed. Doing so will require conducting strategic financial planning at national level, as some countries in the region have done.


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