1. WATER UTILITY INFRASTRUCTURE IN THE REPUBLIC OF CROATIA
HRVATSKE VODE
WATER PROTECTION DEPARTMENT
MARA PAVELIĆ, DSc Biotech.
BRUXELLES, 21 January 2015

2. 21st CENTURY CHALLENGE
Water is a strategic 21st century resource, and although it covers 70% of the Earth’s surface, freshwater represents only 3% .
¼ of the world population does not have at their disposal sufficient quantities of drinking water, which makes the provision of sufficient drinking water quantities the main ecological, economic and safety issue.
On the global level, 70% of the total water consumption is used in agriculture, 19% for industrial purposes and 11% for personal needs of the population.
Based on total renewable water resources per person, Croatia ranks 3rd in Europe (after Norway and Russia), and 5th with regard to quantities of high quality drinking water, which makes us committed to rational and responsible management.

3. 21st CENTURY CHALLENGE
Level of water supply to population in the Republic of Croatia is 76%, but the connection level to public sewerage systems is less than 50%.
Existing public sewerage systems do not always meet the need, which is particularly visible in tourist season.
Numerous challenges direct us to transboundary cooperation and joint approach to problem solving.
Water protection is not only the issue of protecting national heritage and ecological priority, but also a political priority to preserve sovereignty over water resources.

4. HISTORY OF WATER MANAGEMENT
Founder: Josip Juraj Strossmayer
Founding date: 7 Sept – next year will be the 140th anniversary of water management
Hrvatske vode were restructured in 1996, after which they have retained as its core water management activity exclusively public service activities, which include:
Water regulation and protection from adverse effects of water
Water use
Water protection
Irrigation
Drafting planning documents for water management
HISTORY OF WATER MANAGEMENT

5. ACTIVITIES OF HRVATSKE VODE
I. Rregulation and protection water management facilities
dikes, bank revetments, relief canals, lateral canals, dams with reservoirs, sluices, retentions ,
owned by the Republic of Croatia, managed by Hrvatske vode
II. Amelioration water management facilities
basic amelioration drainage facilities (owned by the Republic of Croatia, managed by Hrvatske vode
2.detailed amelioration drainage facilities, irrigation facilities
owned and managed by regional self-government units
III. Water utility facilities
public water supply facilities and public sewerage facilities ,
owned and managed by public water service provider

6. PROGRAMME OF MEASURES
The Republic od Croatia is a country with abundant water resources; therefore, the indisputable national strategic goal is to protect them and ensure sufficient supplies of clean water for future generations.
In achieving this goal, great efforts are made, as well as financial resources invested, to achieve the required standards planned in the Water Management Strategy, which was adopted by the Croatian Parliament in July 2008 as the long-term planning document which defines the vision, mission, goals and tasks of the national policy in the field of water management.
The Republic of Croatia, as the latest EU member, had a different position from its predecessors.

7. PROGRAMME OF MEASURES
All experiences and problems which the European Commission encountered with joining of new countries from East Balkans and Baltic countries resulted in more stringent criteria which were applied to the Treaty concerning the Accession of the Republic of Croatia to the European Union.
The Republic of Croatia joined the EU in the period when the Black Sea area was declared a sensitive area, which resulted in the requirement that more stringent wastewater treatment conditions are implemented in the entire area of the Danube River.
Due to integrated implementation of the adaptation, securing funds and technical equipment of water service providers, it was concluded necessary to consolidate small water service providers, i.e. to implement a reform of the water utility sector.

8. IMPLEMENTATION OF THE NATIONAL PLAN – DEADLINE FOR COMPLIANCE
Sensitivity
Agglomeration size (PE)
TOTAL
2,000-10,000
10,000-15,000
15,000-50,000
50, ,000
>150,000
Black Sea Basin – sensitive area
wastewater collection secondary treatment
12 years-31 Dec. 2023
(126 agglomerations)
wastewater collection more advanced treatment
9 years-31 Dec. 2020
(10 agglomerations)
wastewater collection more advanced treatment 7 years-31 Dec. 2018
(29 agglomerations)
wastewater collection more advanced treatment 7 years -31 Dec. 2018
(2 agglomerations)
167
Adriatic basin - sensitive area (discharges on land and part of the sensitive sea)
wastewater collection secondary / appropriate* treatment
(26 agglomerations)
wastewater collection more advanced treatment 9 years-31 Dec. 2020
(5 agglomerations)
(8 agglomerations)
(0 agglomerations) 39
Adriatic basin – area of the "normal" sea
wastewater collection appropriate treatment
(53 agglomerations)
wastewater collection
secondary treatment
(16 agglomerations)
wastewater collection secondary treatment 7 years-31 Dec. 2018
9 years-31 Dec **
(11 agglomerations**)
7 years-31 Dec. 2018
(4 agglomerations) 88
205 31 54 4
294
*- coastal areas
** - coastal agglomerations with a significant share of tourism in total load (> 30%)

9. AREA SENSITIVITY IN THE REPUBLIC OF CROATIA
Agglomerations PE PE
> 150,000 PE
Area sensitivity
SENSITIVE
Eutrophic area
Area intended for abstraction of water for human consumption
Protected nature area
Sensitive area basin
NORMAL
Normal area
Additional bathing water protection area

10. ANALYSIS OF STATE IN THE WATER UTILITY SECTOR WATER SUPPLY ZONES
376 water abstraction sites
443 local water supply systems
68 water supply zones
Water supply zones are determined mainly based on technical analysis of the existing state and water supply development plans
Average water supply zone has 65,000 inhabitants and annual water production of approx. 3.8 m3
Large differences between minimal and maximal quantities

11. ANALYSIS OF STATE IN THE WATER UTILITY SECTOR
SEWERAGE
Wastewater collection of approx. 329 million m3
Coverage level of public sewerage is 47%
Capacity of newly constructed wastewater treatment plants is 4.04 million PE
Coverage level of wastewater treatment is 30% of the population
763 sewerage systems were established, of which 294 larger than 2,000 PE

12. ANALYSIS OF STATE IN THE WATER UTILITY SECTOR
PRESENT WWTP
CONSTRUCTION
LEVEL
(WWTP ZAGREB)
140 installed WWTPs, of which 43 have capacity for less than 2000 PE
97 plants are larger than 2000 PE
It is necessary to construct 290 plants, i.e. 197 new WWTPs
36 WWTPs have preliminary treatment, which is 1,341,710 ED, i.e %
Of 140 WWTPs, 117 is operating
On 49 WTTPs (secondary and tertiary level), efficiency is evaluated
Most plants do not meet treatment efficiency

13. IMPLEMENTATION OF THE PROGRAMME OF MEASURES
Water Management Strategy
River Basin
Management Plans
Multi-annual construction programme for water utility facilities
Multi-annual construction programme for
regulation and protection water facilities and amelioration drainage facilities
Multi-annual programme for monitoring harmonization
Annual programmes for maintenance works in protection areas from adverse effects of water
RBMP– Programme of measures
Flood Risk Management Plan – Programme of measures
Public information and participation in the preparation and update of plans and programmes is carried out through public consultation in compliance with requirements of the:
Water Framework Directive
Flood Directive
SEI Directive
Strategic environmental
impact assessment
Strategic environmental impact assessment
Conditions, measures and recommendations in relation to nature protection

14. MULTI-ANNUAL CONSTRUCTION PROGRAMME FOR WATER UTILITY FACILITIES
Based on the Implementation Plan for Water Utility Directives – document was prepared by Hrvatske vode and adopted by the Government of the Republic Croatia in Nov
Represents mandatory part of the programme of measures as part of the RBMP.
Its starting point are adopted and agreed activities and deadlines related to the implementation of the EU water utility directives as an integral part of the Accession Agreement.

15. MULTI-ANNUAL CONSTRUCTION PROGRAMME FOR WATER UTILITY FACILITIES
The programme takes into account agreed activities and deadlines and elaborates in detail technical/ implementation/ organization issues.
The programme:
Defines the framework investment programme in public water supply and public sewerage,
Operationalizes the project implementation system to contribute to more efficient utilization of financial, personnel and information / documentation resources available to the Republic of Croatia.

16. MULTI-ANNUAL CONSTRUCTION PROGRAMME FOR WATER UTILITY FACILITIES Cost analysis:
A significant impact on the implementation of the EU water utility directives is also the WFD, which requires water price policy based on the principle of cost recovery for water services.
A prerequisite for responsible and efficient water use is water saving and collection of funds for infrastructure maintenance and renewal.
Considering the estimated high investment costs and need to introduce water price based on the cost recovery principle (incl. costs of investment, operation and maintenance, depreciation, etc.), the affordability analysis represents the most demanding, and also the most influential part of organizing the implementation of the EU water utility directives.

17. MULTI-ANNUAL CONSTRUCTION PROGRAMME FOR WATER UTILITY FACILITIES
Understanding the water utility sector in the framework of the Implementation Plan for Water Utility Directives (2010) has significantly contributed to better water management planning and understanding of the implementation on the national level.
The established and connected database was used for determination of service area boundaries, and presents the basis for further elaboration of activities through the Programme.
Identification of priority investment areas, already during the negotiations with the EU, enabled implementation of a series of projects, among which the ones using loan funds from international development banks and EU pre-accession funds seem more significant.

18. MULTI-ANNUAL CONSTRUCTION PROGRAMME FOR WATER UTILITY FACILITIES
The Programme is financially demanding, thus a special attention is paid to models of financing.
All sources of financing are directed to the Programme: appropriate EU funds, loans from IFIs, available domestic funds (State Budget, budgets of local self-government units, etc.).
A challenge to project shaping/forming is the optimization of burdening the population with new costs, with a desirable highest possible involvement of the EU grants.
Attempts are made to prevent the problem /experience of other countries with regard to a reduced absorption capacity in view of the EU funds due to the lack of well prepared projects.

19. MULTI-ANNUAL CONSTRUCTION PROGRAMME FOR WATER UTILITY FACILITIES
Indicators of the Programme results:
Increased water supply level of the population.
Reduced water losses from public water supply systems.
Increased connection level to public water sewerage systems.
Increased number of sewerage systems compliant with the standards.
Share of the future water price without costs of local cofinancing in NRD (uniform price in a service area)

20. INVESTMENT CYCLE - WATER UTILITY SECTOR
Drinking water directive
68 water supply zones identified (presently 135 companies, 376 abstraction sites, 74% of the population connected to public water supply systems)
443 local water supply systems
14% of the population supplies water from own wells
Transitional period (3+3+3).
1.355 billion EUR
Urban wastewater directive
763 agglomerations identified; 294 larger than 2000 PE (presently 151 companies, 47% of the population connected to public sewerage systems, 30% of the wastewater is treated)
Transitional period
3.192 billion EUR

21. INVESTMENT CYCLE - WATER UTILITY SECTOR
2018: it is necessary to build sewerage systems for a total of 47 agglomerations.
2020: it is necessary to build sewerage systems for a total of 26 agglomerations.
The total planned WWTP capacity for 294 agglomerations larger than 2000 PE is 7,780,440 PE. WWTPs built through projects will have a total capacity of 6,170,010 PE (79.30%).
The total number of inhabitants in agglomerations larger than 2000 PE is 3,260,053. The projects cover the area with 2,417,193 inhabitants (74 %).

22. OVERVIEW OF PROJECTS IN PREPARATION
No. Project name Construction value (EU) No. of projects per implementation year Total
Sewerage projects
Water supply projects
Total Implementation Plan
List 39
List 16
List 7
List 9
Other
Total
Difference – Implementation Plan
Project lists were named after the number of projects
No. of agglomerations and water supply zones is larger that the number of projects (for the purpose of grouping per water service provider – wider spatial perception)
50% of estimated implementation value for the Urban wastewater treatment directive is initiated

23. OVERVIEW OF PROJECTS IN PREPARATION
Through funds of Hrvatske vode, HRK 260 million was secured up to date for preparation of water utility infrastructure projects at the estimated value of 2.6 billion Euro, through the use of the Structural and Cohesion Funds which Croatia can now use following EU joining.
Through defined allocations in the Multi-annual financial framework, we expect annual allocations for water management in the amount of million Euro of the EU funds, i.e. the EU Regional Development Fund anticipated a tentative allocation of 1.3 billion Euro in the financial programme period
A large number of projects has a high maturity level.
In preparation up to date:
2300 km of detailed designs of water supply and sewerage networks
20 WWTP preliminary designs

24. EIB and CEB PROJECT WATER UTILITY INFRASTRUCTURE FINANCING
Loan amount: 150 million EURO
EUR 75 million (EIB)
EUR 75 million (CEB)
Project financing
The project is financed in the ratio 90 %- 10% of the investment value excl. VAT
(90% from the bank loan funds, 10% is own participation of final beneficiary, VAT is paid by final beneficiary)
Total estimated project cost excl. VAT: million EUR
EUR 75 million (EIB loan funds)
EUR 75 million (CEB loan funds)
EUR 16.7 million (own funds of public water service providers)

25. EIB and CEB PROJECT WATER UTILITY INFRASTRUCTURE FINANCING
Project purpose:
The project includes investments in water supply systems, wastewater collection and treatment and storm water collection in municipalities located in all Croatian counties, with the exception of the City of Zagreb.
Project implementation:
Project implementation is planned in the period for a total of 650 subprojects on the entire Croatian territory.
Loan funds:
Amount to a total of 150 million EUR0 (75 million EUR CEB, 75 million EUR EIB)
Loan funds absorption is planned in 4 tranches.
To date, 60 million EUR of bank loan funds have been absorbed (CEB - 30 million EURO, EIB – 30 million EURO) in 2 tranches.
In 2015 and 2016, the absorption of the remaining 90 million Euro of the loan funds is planned.

26. CONCLUSION
The implementation of the water utility directives was institutional obligation, but also incentive, not only for institutional and adaptation, but also for technical and technological, organizational, personnel and financial restructuring of Croatian water utility sector.
Consolidation of water service providers (utility companies) is a strategic determinant of the Republic of Croatia, and the expected outcomes are increased service level (coverage and quality of public water supply and public sewerage services), rationalization of operation and maintenance costs of public systems (sustainability and development) and related rationalization of water price which the citizens pay.

27. CONCLUSION
Acceptability and implementability of such long-term programme documents, whose content and scope is demanding, depend on coordinated work of initiations in the water sector (national, regional and local level) and timely/ active participation od stakeholders and the general public.
Apart form the fact that the national water management policy is implemented through this type of documents, they also follow thematic goals and investment priorities related to environmental protection and/or water management on the EU level, and in this manner secure financial support for their implementation.

28. THANK YOU FOR YOUR ATTENTION