Environment in emerging and transition economies

Managing the water sector more effectively and efficiently

 

 

One of the main obstacles to the financial and operational sustainability of the sector in EECCA is the absence of proper financial planning by water utilities.The lack of capacity in financial planning and management, as well as in project preparation are an important cause for this situation.

 

Within the work of the EAP Task Force several tools and approaches have been developed and applied in EECCA countries, mainly to facilitate more realistic financial planning, and to enhance and monitor the performance of sector institutions. The tools were developed in response to expressed demand in EECCA countries and they have been developed and tested in demonstration projects in EECCA countries.

 

FPTWU l Feasible tool

MYIP l Training Programme l Water PSP l

Performance-Based Contracts l  Decentralisation l

 

The set of tools available to support local level actors include:

  • The Financial Planning Tool for Water Utilities (FPTWU)  was developed to assist water utilities in the EECCA region to reach financial and operational sustainability by rationalising the way capital expenditure programmes are established and determining the conditions for the balancing of sources and uses of funds.

 

  • The Financing Strategy methodology and the FEASIBLE (computer-based) tool it supports were developed to promote strategic financial planning for the WSS sector at the national and regional levels. Key elements of the methodology are: to set specific, measurable, time-bound targets for the WSS sector (e.g. increase coverage, shift from surface water to ground water, rehabilitate existing system, build new facility or introduce new technology etc.), and simulate them using the FEASIBLE model; to estimate the expenditure needs, finance available and eventual financing gap; and to design a package of policy measures to bridge the gap by increasing the supply of finance and/or by adjusting development targets to realistic levels. Key outputs from the (iterative) process are a set of realistic targets, a scenario to achieve them and a package of policy measures (financial and institutional)  supportive to the selected targets and scenario. 
  • The Multi-Year Investment Planning Tool (MYIP) was designed to guide public sector experts in programming, appraising and managing capital investments. It supports the multi-year investment planning process, including preparation of a multi-year financial plan, defining investment requirements, defining project selection criteria, and evaluating investment proposals for inclusion in a final investment plan.
  • A training programme was developed on the basis of the existing EAP TF tools and approaches to convey knowledge to water utilities and local government administrations in their countries and regions. The training package includes the tools themselves, annotated presentation slides and a training manual. A project website in English and Russian was established to communicate the main project objectives and provide access both to the four tools presented under the project and the training materials. 
  • The potential role of private sector participation in the EECCA water sector is the subject of ongoing policy dialogue. Four roundtable discussions involving public and private actors active in the water sector in the EECCA region have been organised, together with the World Bank, to analyse the key opportunities and obstacles to private sector participation. An OECD checklist for private sector provides guidance on how to improve the policy framework.

 


 

 

 

 

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