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National policy Dialogue on
Finance Strategy for Rural
Water Supply and Sanitation
Alexander Martusevich,
Environment Directorate
Env&Globalisation Division
EAP Task Force
Structure of presentation
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EAP Task Force
Collective efforts to achieve waterrelated MDGs
Present project objectives and previous
EAP Task Force work on financing WSS
infrastructure in Armenia
International institutions involved
Steering Committee meeting
Collective efforts to help achieve waterrelated MDGs
Achieving water-related MDGs in rural areas
is a big challenge!
Key initiatives:
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EU WI (led 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 waterrelated MDGs in Armenia
The present project inter alia aims to address
specific requests from SCWS:
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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
Finance strategy (FS) for urban WSS
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EAP Task Force
(focusing on urban 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
Previous EAP Task Force work - 2
Implementing FS for WSS in Armenia,
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EAP Task Force
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)
Present project
Present project has a broader task:
To organise a National Policy Dialogue
(NPD) on how to finance achieving waterrelated MDGs, targets on WSS, and on IWRM
Influence the sectoral policy
Inter alia it envisages:
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EAP Task Force
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
International institutions involved
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EAP Task Force
EU WI EECCA component lead by EC (DG
ENV), Technical Secretariat (DHI & COWI)
EAP Task Force (WSS and financing)
UN ECE (IWRM)
Donors (US AID and Millennium Challenge
Corp., UK DFID, JICA, JIBIC)
IFIs (WB, KfW, EBRD, ADB)
EU WI Finance Working Group, etc.
In 2007 the NPD in Armenia will focus on
WSS and related financial issues
Eventual report on progress at the EfE
conference in Belgrade (Oct. 2007)
Steering Committee meeting
Key objectives:
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EAP Task Force
Inform local stakeholders about progress in
project implementation
Discuss preliminary findings of the baseline
scenario
Ask the SC for guidance on interpretation of
MDG targets, minimal water supply concept,
and some key variables of policy scenarios
Practical issues and arrangements concerning
data collection, next meeting, etc.
Interpretation of water-related MDGs
for rural areas
Water supply:
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Technology (piped systems vs springs, wells,
boreholes) and service level (standpipes, yard
taps, in-house taps)
Amount of water (30-50 lcd; 90-120 lcd)
Sanitation:
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EAP Task Force
Improved pit latrines, septic tanks (for flush
toilets), simple sewer, sewer and WWTP
Level of treatment (mechanical, MB)
Settlements where treatment is a must (e.g.
otherwise would affect sources of water supply)
Possible interpretations of the
“minimal water supply standard”
Technology and Quantity:
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EAP Task Force
30-50 litres per capita per day from dug wells and/or
boreholes with hand pumps no farther than 200 meters
from dwellings (relatively cheap decentralized solution)
30-50 lcd from stand-pipes located no farther than 200
meters from dwellings (relatively cheap centralized
solution)
up to 100-120 lcd from yard tap or in-house tap (more
expensive centralised solution)
Right to water or a Target to be met through joint
efforts of the GoA, communities and water users ?
 coverage and cost implications
Scenarios to meet water-related MDGs
Options:
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Least-cost approach
Focus on rural areas or on urban areas
Geographical focus (highlands, remote areas, etc.)
Equal benefits for all settlements
Setting appropriate institutional set-up
A) Community-based solution: each rural
settlement/community organizes and finances water
supply relying on its own resources with eventual
support from the state.
B1) Co-operation of rural settlements/communities with
eventual support from the state.
B2) same as B1) but on the basis of water users
associations.
C) extending responsibility of existing professional
operators (water utilities) and/or creating new
professional operators responsible for water supply
systems in rural settlements
EAP Task Force
Financial dimension of MDG scenarios
Key issues:
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EAP Task Force
Prioritising rural or urban water
Level of contributions from the public budget (for
rural/for urban)
How to mobilise more finance while addressing
affordability constraints:
- effectiveness of the income support system to the
poor in rural areas (as well administrated as in
cities?);
- regional water utilities and unified tariffs (crosssubsidisation of rural population, but also
mobilising more finance through introducing user
charges and improving collection efficiency)
Summary of key issues for
discussion
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Guidance from the Steering Committee on:
priorities (esp. rural/urban)
defining MDG scenario
possible public budget support and external
assistance (grants/loans)
affordability constraints in households and
how they can be softened
institutional set-up