1. Alexander Martusevich, Environment Directorate Env&Globalisation Division National policy Dialogue on Financing Strategy for Rural Water Supply and Sanitation EAP Task Force

2. Structure of presentation Status of rural WSS and the challenge of achieving water-related MDGs in EECCA Collective efforts to help achieve water- related MDGs in Armenia Present project and previous EAP Task Force work on financing WSS infrastructure in Armenia International institutions involved First mission and the kick-off meeting EAP Task Force

3. Rural WSS: poor status in all EECCA Infrastructure and service level continue to deteriorate, coverage reduces In many cases the centralised water supply fully collapsed after liquidation of the soviet kolhoz-sovkhoz system Main reasons: Despite low household income, often in kind, and widespread poverty in rural areas: lack of strategic approach and attention from central Governments little public funds allocated to the sector (compared to urban WSS) poor, or lack of the appropriate institutional set-up (few exceptions, region or rural settlement specific) In most EECCA problems faced by Rural WSS are not even fully identified and understood! EAP Task Force

4. Collective efforts to help achieve water- related MDGs Achieving MDGs in rural areas is a big challenge! International support is needed Key related international initiatives: EU WI (leaded 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

5. Collective efforts to help achieve water- related MDGs in Armenia The present project inter alia aims to address specific requests from SCWS: 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

6. Previous EAP Task Force work Financing strategy (FS) for urban WSS (focus on municipal 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 EAP Task Force

7. Previous EAP Task Force work - 2 Implementing FS for WSS in Armenia, 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) EAP Task Force

8. Present project Present project has a broader task: To launch a National Policy Dialogue (NPD) on how to finance achieving water-related MDGs, targets on WSS, and on IWRM Inter alia it envisages: 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 EAP Task Force

9. International institutions involved EU WI EECCA component lead by EC (DG ENV), Technical Secretariat (DHI & COWI) EAP Task Force (WSS and financing) UN ECE (IWRM) As soon as in 2007 the NPD in Armenia will focus on WSS and financial issues, other international players in Armenia will hopefully also be involved: Donors (US AID and Millennium Challenge Account, UK DFID, JICA, JIBIC) IFIs (WB, KfW, EBRD, ADB) EU WI Finance Working Group, etc. EAP Task Force

10. First mission and the kick-off meeting Key objectives: Inform local stakeholders about the project (objectives, scope, milestones) Agree upon main topics of the policy dialogue in 2007 (and potential topics afterwards) Establish Steering Group Agree upon roles and responsibilities of different SG members Ask the SG for advise on some key variables of policy scenarios EAP Task Force