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

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