Rural water and sanitation services – Stocktaking from Moldova Danube Water Conference 17-18 May, Vienna Ion Lica Principal Consultant of Water Management Direction

The Republic of Moldova General Independent from the Soviet Union since 1991 Population of about 3 million Highly dependent on remittances and international aid Agriculture is the main economic activity Association Agreement with the EU signed in 2014 Water resources High vulnerability to climate change Surface and groundwater pollution

Water and Sanitation in Moldova Overall access & organization of services High discrepancy between urban and rural zones in term of access to water and sanitation services Legal framework in a transition process and partially harmonized with EU acquis No single line ministry New regulatory agency (ANRE) which has started to fulfil its role Local autorities are responsible for providing water and sanitation services to the population → New National Water and Sanitation Strategy (2014-2028) → New Law on Public Water and Sanitation Services (2014) Source: Access in 2012, National Water & Sanitation Strategy, 2014

Water and Sanitation in Moldova Strategy on drinking water and wastewater (2014-2028) General objective: to gradually grant access for all communities and population of the RM to safe water and adequate sanitation Specific objectives Decentralise public water supply and sanitation services Expand the centralised water supply and sanitation systems and increase the access of the population to these services The ultimate goal of regionalisation is to create 3-5 regional companies that will provide water supply and sanitation services, except for small villages But the reality represents a challenge! Fragmented territorial administration (1681 villages, 32 districts) 50 urban water utilities 50% of the population without access to WSS services lives in villages below 2’500 inhabitants

Progress and challenges in regionalisation of water and sanitation services New concept which started in 2010 with the pilot project financed by EBRD, EIB, EU in 6 districts comprising 43 localities 9 regional operators so far with Joint Stock Company status Expanding services in neighboring localities but still within district boundaries 1 regional operator with multiple local authorities as shareholders High interest from stakeholders/donors in regionalization Bottom up process: local authorities create joint stock companies for service provision Clearer legal framework Concept of regionalization of public services of water supply and sewerage Regionalization Guide for the public services of water supply and sewerage

Progress and challenges in regionalisation of water and sanitation services Expected results Reduce operation & maintenance costs (economy of scale) Contribute to ensuring the universal access Improve access to international and private funds Develop cooperation mechanisms between local authorities Challenges Concept not clear and well understood Lack of common approach between actors Low cooperation culture and fear of local authorities to lose control over service provision Lack of good practices Complex procedures for the setting-up of regional operators Financial position of utilities compromise formation of regional operators

Beyond regionalization: how are services in rural areas organized? Baseline Research on rural water and sanitation in Moldova Key findings & recommendations

Urgent need to better understand rural services and evidence-based recommendations for rural areas High discrepancy in access to between urban and rural zones Investments take place in urban zones while over half of those without access live in settlements below 2’500 people Regionalization did not yet result in significant changes for rural areas Lack of data: especially on service levels, sanitation and performance of rural providers Part of a regional World Bank study: “Beyond utility reach? Addressing rural services in the Danube Region”

Inequalities of service levels for water supply Non-connected households Connected households Source: MICS 2012 The lowest quintile has 35% access to piped water inside the dwelling versus 79% for the wealthiest quintile Source: HBS, 2015

Households connected to water systems enjoy better services but safety still compromised Non-connected households Accessibility: 30% have water piped in their home/yard, 30% spend more than 30 minutes per day Water quantity: high satisfaction Water quality: high satisfaction despite high contamination of shallow aquifers, limited practice of household water treatment Reliability: good Affordability/willingness to pay: 75% of ownership and 30% with electrical pump; WTP for piped water 0.2-0.5 Euro/m3 Connected households Accessibility: 75% with home connection, 25% with yard connection Water quantity: between 30 to 100 liters/capita/day Water quality: aquifers with natural contamination, water treatment usually not performed by operators; low compliance on test Reliability: 24/24h service delivery Affordability: 0.20 up to 0.50 Euro/m3 of water consumed; based on 70 lpcp, this presents up to 2% for households on less than US$ 2 per capita per day Source: primary data collection

Sanitation facilities: whose reality counts? 50% with improved sanitation facilities Majority of households rely on pit latrine which are usually not emptied Few have flush toilets connected to sewerage, septic tanks, cesspits or soak pits Only 50% of surveyed sanitation facilities are improved as per JMP Gap between actual sanitation situation, expressed needs and satisfaction Satisfaction level acceptable High “interest” to connect to sewerage (and stated WTP) Majority of households connected to water supply systems, do not have flush toilets or in-house plumbing 50% with unimproved sanitation facilities Source: primary data collection

Important role but limited means to fulfil local authorities mandate in providing WSS services Financing of infrastructure and ownership of assets Organizing the administration of systems and service provision Approving tariffs Capacity Limited support provided to implement their mandate Limited source of funding for investments Low local budget derived from local taxes only High dependency on national funds and donors 80% did not access national funds in past fiscal year Limited capacity to determine tariff Source: primary data collection

Local municipal operators are critical for rural service delivery but neither recognized nor supported The majority of management models are outside regulatory framework No institutionalized support in place: local operators are completely left aside Low operational performance, although with support this can be altered In 30% of cases, tariffs cover O&M costs, but not major repairs Going forward: is a complementary transitionary approach needed to support local governments and local operators? Source: primary data collection

Emerging recommendations to address challenges in rural areas Accelerate regionalization and develop incentives for collaboration between local authorities Support localities – with TA and/or investments - in entering into cooperation with regional operators Provide a transitory framework for regulation of local municipal operators and promote formal delegation to licensed local operators Develop and institutionalize support to local operators to increase their capacities and encourage compliance with regulatory requirements Improve financing sources and efficiency of investment process Consistent and transparent criteria for project selection

Looking at the bigger picture: how to go about the Sustainable Development Goals Adopt a national master planning approach for urban and rural areas to attract financing in a strategic manner: Prioritize investments with consideration to equity Scope/delineation for regional and decentralized management solutions Prepare underlying financing strategy for the most efficient use of public funds Explore and promote a variety of sanitation solutions beyond sewerage Anchor solutions on real situation on the ground Promote on-site sanitation and service chain for fecal sludge management Recognize step-wise implementation of collective sanitation systems