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Results Briefs October 15, 2020

Partnering for Impact in Bulgaria: Supporting the Design and Implementation of Water Supply and Sanitation Reforms

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The objective of the three series reimbursable advisory services (RAS) was to support the Government of Bulgaria in analyzing Water Supply and Sanitation (WSS) issues, as well as designing and implementing sector reforms. This included help developing a long-term WSS Strategy, improving institutional capacity for delivering cost-compliant investment programs, and improving affordable and quality WSS services.

Challenge

Prior to the implementation of the three series RAS, Bulgaria faced significant challenges in complying with the European Water Framework (WFD) and Urban Wastewater Treatment (UWWTD) Directives. Moreover, issues ensuring wastewater collection and treatment for all agglomerations above 2,000 people, as well as improving the governance of regional WSS operators, were present when the World Bank started providing technical assistance in 2012. At that point, 35 percent of the population considered water quality to be poor “very often,” while just 66 percent were connected to wastewater collection systems and 50 percent to wastewater treatment.

From 2012-2018, around two billion euros were invested in the WSS sector (mainly through European Union (EU) grant money), which significantly improved WSS services and resulted in 98 percent of people receiving access to piped water, about 80 percent with wastewater collection, and 70 percent with wastewater treatment. Still, achieving the WFD and UWWTD requirements remained a challenge. There was a need to complement the investment financing with capacity building and improved governance.

Approach

In 2012, the World Bank signed the first RAS agreement to help the Government of Bulgaria analyze, design and support WSS sector reforms to achieve compliance with the applicable directives, and increase WSS service sustainability. The 2012 RAS focused on reform planning and was followed with the signing of two additional RAS agreements (with the last one closed in 2019) with focus on implementation and capacity building to address sector specific issues and provide solutions to bridge the funding gap

The World Bank created an advisory team of experienced international and local WSS experts. Some of the key outputs delivered included Regulatory Review; Public Expenditure Review; National WSS Sector Strategy with an Action Plan; Proposals for amendments to the Ordinance on long-term levels for WSS services quality and on tariff regulation for WSS services; Report on the WSS sector reform implementation covering: (i) measures to improve revenue generation in the sector; (ii) challenges to the state and Operational Program Environment support for the financing of the sector; (iii) mechanism to reinvest the generated revenues, and (iv) financing of the sludge management from UWWT Plants; Benchmarking report of the WSS operators on the quality of WSS services for 2015-16; WSS Sector Financing Strategy etc.

Results

During the seven years (2012-2018) of technical assistance to the Bulgarian Government to reform its WSS sector, the following outcomes have been achieved:

  • Improved environmental standards and protection: based on an updated plan for achieving UWWTD compliance; RAS supported the prioritization of WSS investment projects to tackle bigger polluters and improve wastewater services in big agglomerations.
  • Enhanced regulatory framework and better services at affordable tariffs: the regulator received access to good international practices and tools that improved operator performance, while protecting consumers.
  • Clear distribution of WSS asset ownership and responsibilities, leading to improved sector governance: the World Bank assisted in developing investment requirements in delegation contracts and introducing roles for states, municipalities, regulators and utilities, as well as controlling mechanisms to ensure aligned efforts and enhanced governance.
  • Increased performance of WSS operators through introduction of benchmarking, required levels of WSS services in a regulatory period as well as wide adoption of good commercial practices and programs for reduction of technical and commercial losses; the regulator reported a reduction in non-revenue water and increased collection during the mid-term regulatory review.
  • Improved capacity of WSS operators to prepare, invest and manage WSS projects, which improved critical assets’ condition or extended services.
  • Increased sustainability of WSS assets, services and overall operator performance through plans for improved operations and maintenance, and cost recovery.
  • Improved programming and financing of the sector, helping achieve the required Directives and improve WSS services: from 2012-2018, around 2 billion euros were invested in the WSS sector - resulting in roughly 98 percent of the population obtaining access to piped water, wastewater collection reaching nearly 80 percent, and treatment reaching around 70 percent .
  • Improved capacity to develop and implement WSS sector policies for improved WSS services: A national WSS Strategy and Financing Plan was developed; good international practices were shared, study trips were organized, and a series of trainings and workshops were attended by over 500 people.
  • Enhanced implementation of water requirements, reduced compliance timeline and optimized costs: An improved compliance rate with EU water directives, a newly developed plan for meeting necessary service and environmental protection requirements, and mobilizing of required sector financing.

Bank Group Contribution

Source of Fund: Reimbursable Advisory Service – $4.5 million

Partners

The World Bank provided technical assistance to the Ministry of Regional Development and Public Works, and Energy and Water Regulatory Commission to reform the water supply and sanitation sector.

Moving Forward

Part of the outputs created under the Bulgarian WSS RAS agreements were used for other World Bank programs, including the Danube Water Program, additional RAS agreements in the region and even institutional components of investment lending projects. For example, water sector reform, regulation, or strategy preparation services have been requested by some governments either aspiring to become EU member states, or rather to simply draw on good international WSS sector practices.

The Bank is currently assisting Bulgaria in preparing its River Based Management Plans and Flood Risk Management Plans for 2020-2027. These plans are extremely important for the overall management of water resources and their uses, as well as protection from harmful impacts of water.

The World Bank applied the lessons learned and accumulated experience from working in Bulgaria to:

  • Provide similar technical support to Romania (two ongoing RAS agreements in the water sector).
  • Improve, share knowledge and support the transformation of WSS sectors in the region through initiatives like the ongoing Danube Water Program.
  • Influence and contribute to the initiated revision and update of the European Water Directives.
  • Inform its WSS work in other regions worldwide aspiring to the high European environmental standards.

Beneficiaries

The direct beneficiaries were the Ministry of Regional Development and Public Works, and Energy and Water Regulatory Commission of Bulgaria. The indirect beneficiaries included the people of Bulgaria who benefitted from improved water and sanitation services.