ENHANCING THE ECONOMIC REGULATORY SYSTEM FOR MOLDOVA'S WATER SUPPLY AND SANITATION.

Description

Foreword Abbreviations and acronyms Executive Summary Chapter 1. The context of Moldova’s economic regulatory system for water supply and sanitation Background Policy objectives Association Agreement Sustainable development goals National policy and strategy Water supply and sanitation sector performance Demands on ERS for WSS in Moldova Notes References Annex 1.A. Indicators of Moldova’s WSS sector in comparison with Non-EU and Danube Region average figures (sector data from Danube programme) Annex 1.B. Relationship needed for balance and possible conflicts between the demands on ERS Chapter 2. Moldova’s economic regulatory system for water supply and sanitation Recent developments in the legal and institutional framework for WSS Main actors in the ERS, competences, activity and capacity National Agency for Energy Regulation (ANRE) Ministry of Environment (MoE) Ministry of Regional Development and Construction (MoRDC) Ministry of Labour, Social Protection and Family (MoLSPF) Ministry of Finance (MoF) Local Public Authority Level I (LPA I, i.e. lowest – settlement, municipal – level) Local Public Authority Level II (LPA II, rayon level) Consumer organisations, NGOs, WUCs Policy co-ordination bodies IFIs, donor community and other international organisations WSS operators Tariff methodology and its application Regulation should consider specificity of transition country Cash flow constraint Social aspects Tariffs considering the costs associated with indoor water supply in apartment blocks Ownership and depreciation Tariff structure and cross subsidies Preparation and application of the methodology Funding gap Tariffs, taxes and transfers Indicative operating and capital expenditure Closing or bridging the gap ERS evaluation Scenarios for the ERS of Moldova Option 1: “De-bottleneck” Option 2: “Back to the drawing board” Option 3: “Complete and reorganise” Adopting an option Notes References Annex 2.A. Tariffs in Moldova as of May, MLD/m3 Annex 2.B. Report on proceeds of Expert Meeting, 16 November 2016 Chapter 3. Good practice and country experience Good practice Country experience Chile Flanders Netherlands Kazakhstan Notes References Chapter 4. Recommendations and conclusions Reform objectives and lead institution Providing incentives towards performance improvement Deciding who pays for the metering differences Facilitating the regionalisation of WSS services Paving the way for sustainable business models Realising the optimal mix of the 3Ts Extending the use of economic instruments Improving access to external finance to bridge the funding gap in WSS Establishing strong and well-targeted social measures as a key element of the ERS Listed recommendations, key resource documents and TA requirements Implementation References Annex A. The proposed roadmap recognises the high complexity of sector regionalization (Extract from the World Bank [2013] Regionalization Review) Annex A. The proposed roadmap recognises the high complexity of sector regionalization (Extract from the World Bank [2013] Regionalization Review) Phase 1: Clarify the concept and raise interest Phase 2: Strengthen service providers before the reform Phase 3: Support the establishment and initial operations of the regional utilities Phase 4: Expand to rural localities Annex B. Outline of business plan and financial model template Annex C. Description of proposed rebate system for WSS in Moldova