Executive Summary

The Water Policy Outlook study aimed to compare and contrast existing policy frameworks against the long-term strategic plan and vision for the water sector by respective governments. The outlooks aimed to map the future policy challenges and policy reform opportunities required to achieve these long-term strategic objectives. This innovative work was applied in Georgia, the Republic of Moldova and Ukraine for the first time in 2019-20. These countries are of particular interest, as many of the long-term strategic objectives are based on Association Agreements with the European Union, which set the ambition and direction of water policies and contain time-bound requirements to approximate to EU legislation including the Water Framework Directive.

The outlooks baseline the country policy framework and current performance and challenges and define the long-term vision and aspirations to 2030, identifying opportunities for improving policy coherence and reform. These outlooks are intended to be used to stimulate policy discussion at the national level and have potential to be replicated in other countries throughout the EECCA region as methodology is further developed and refined.

Despite recent progress in the countries, it is considered that Georgia, Moldova and Ukraine are unlikely to fully meet their stated policy targets by 2030 following a “business as usual” application of existing policy frameworks. Challenges are numerous including legal and regulatory gaps and poor implementation, inconsistent development and application of economic policy instruments and coordination challenges from fragmented institutional frameworks leading to inefficiencies in water management.

The Association Agreements with the European Union pose a particular challenge with a set timetable and ambition for progression. In particular the requirements for alignment with the Water Framework Directive and associated EU Directives pose legislative challenges and institutional challenges. They reveal a considerable back-log in terms of water and wastewater infrastructure requirements. The infrastructure gap is particularly notable with regard to the meeting obligations under the EU’s Urban Wastewater Treatment Directive, and achieving SDG 6.1 and 6.2 targets in rural areas. The establishment of technically and financially sustainable River Basin Management Organisations also poses a challenge. Long-term strategic planning, that is harmonised across different sectors, such as water supply and sanitation and irrigation, and is supported by sustainable financing mechanisms will be crucial to bridge infrastructure gaps.

“Business as Usual” scenarios predict: revenues generated with the existing tariffs for water supply and sanitation services are insufficient for improving the quality of water management; where they exist, economic instruments (abstraction and pollution charges) are ineffective in driving water use efficiency and discouraging water pollution; rural populations may be “left behind” with regard to water supply and sanitation development; water consumption patterns will remain inefficient, with wastage through distribution and use and unclear water allocation regimes; water pollution is likely to increase and water quality will deteriorate with an associated impact on the loss of biodiversity; governmental water resource management expenditure will likely be affected by the negative impact of COVID-19 magnifying the need to become more targeted and cost-effective.

Most Government strategies strive to contribute to universal and equitable access to safe and affordable drinking water, adequate sanitation and improved hygiene, a reduction in water borne diseases and a reduction in the number of illnesses and fatalities from water pollution. However, in the region, strategy documents typically focus on a narrow discussion of aspects of water policy, being sector specific e.g. irrigation or water supply and sanitation management. A unified and comprehensive strategic vision is required to ensure universal access to safe water and the rational utilisation of water resources. This will aid prioritisation of action and optimise the use of limited resources and should factor in demographic trends and reflect robust projections on climate change.

Key issues in terms of achieving policy goals such as progression of SDG targets and alignment with the EU’s Water Framework Directive were identified as:

  • Georgia: legislative barriers blocking progress - notably the need to progress the Draft Law on Water Resources Management and consider future implementation and enforcement arrangements.

  • Moldova: a lack of financial resources - better coordination of institutional (agglomeration) and investment measures, aiming at economy of scale, as well as exploring new financing mechanisms based on improved water demand management and taxation of water use and pollution.

  • Ukraine: sector fragmentation and absence of an overarching national water resources strategy to align sector priorities and strategic financing.

For all countries, policy reform must be supported by practical implementation mechanisms, compliance monitoring and enforcement and appropriate attention to supporting sustainable financing of the water policy reform and supporting infrastructure.

The annual costs of full reform scenarios were estimated as follows:

  • Georgia: EUR 197 million (equivalent to EUR 52.9 per capita)

  • Moldova: EUR 2.04 billion (equivalent to EUR 76.8 per capita)

  • Ukraine: EUR 23 billion (equivalent to EUR 57.5 per capita)

Differences in reporting and classification of costs across different governmental departments leads to difficulties in linking public expenditures to particular water-related EU directives or specific national strategic goals. Monitoring and assessing overall cost-effectiveness of public expenditures on water resources management remains a challenge and opportunity for further work. The importance of appropriate enabling environments to pave the way for reform is also a key lesson learned.


This work is published under the responsibility of the Secretary-General of the OECD. The opinions expressed and arguments employed herein do not necessarily reflect the official views of OECD member countries.

This document was produced with the financial assistance of the European Union. The views expressed herein can in no way be taken to reflect the official opinion of the European Union.

This document, as well as any data and map included herein, are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area.

Photo credits: Cover © tetiana_u/Shutterstock.com.

Corrigenda to publications may be found on line at: www.oecd.org/about/publishing/corrigenda.htm.

© OECD 2021

The use of this work, whether digital or print, is governed by the Terms and Conditions to be found at http://www.oecd.org/termsandconditions.