Government of the Republic of Moldova Resolution No

GOVERNMENT OF THE REPUBLIC OF MOLDOVA

RESOLUTION NO. 442 of 1 July 2020 Chisinau

Regarding Amendments to Government Resolution No. 199/2014 on Approval of the Water Supply and Sanitation Strategy (2014-2028)

The Government RESOLVES TO:

1. Amend Government Resolution No. 199/2014 on Approval of the Water Supply and Sanitation Strategy (2014-2028) (Official Monitor of the Republic of Moldova, 2014, Issue 72-77, Article 222), as amended, as follows:

1) Replace “(2014-2028)” with “(2014-2030)” in the title of the Resolution, in the heading and throughout the text of Attachment No. 1;

2) Add the following paragraph 11 to the Resolution:

“11. Approve the Action Plan for 2020-2024 to Implement the Water Supply and Sanitation Strategy (2014-2030) as per Attachment No. 11.”;

3) In Attachment No. 1:

a) Throughout the text:

Replace “(2014-2028)” with “(2014-2030)”;

Replace “the State Environmental Inspectorate” in any grammatical form with “the Environmental Protection Inspectorate” in the relevant grammatical form;

Take out “the Ministry of Education”;

Take out “the Inter-Ministerial Steering Group for the Strategy implementation” and “the Steering Group” in any grammatical form;

Replace “water use” in any grammatical form with “water supply” in the relevant grammatical form;

b) In the Introduction:

In the fourth paragraph, take out “deems it timely to develop medium-term (2014-2018) and long-term (until 2028) strategy for the sector” and replace “and thereby facilitates” with “facilitates”;

Define the term “sanitation” as follows:

“Sanitation is a set of public services and activities to ensure sanitary, epidemiological, hygienic, and environmental security:

(a) Collection, transportation, and treatment of domestic wastewater, faecal wastewater (containing human excreta) and stormwater; and 2

(b) Disposal and treatment of sludge from toilets, septic tanks, and public wastewater treatment plants to reduce chemical and microbial contamination and maintain healthy and sustainable environment”; c) In Chapter I:

In paragraph 1:

Take out “Government Resolution No. 662 of 13 June 2007 to Approve the Water Supply and Sanitation Strategy for Settlements in the Republic of Moldova aims to improve the legal and institutional framework of the Republic of Moldova in line with the EU directives so that the population could benefit from new services of new, European quality”;

In paragraph 2:

Replace “The National Energy Regulatory Agency (NERA) developed a methodology for setting, approval, and application of tariffs for public water supply, sanitation, and wastewater treatment services” with “The National Energy Regulatory Agency (NERA) developed a methodology for setting, approval, and application of tariffs for public water supply, sanitation, and wastewater treatment services” [translator’s note — the amendment in relation to the term sanitation concerns Romanian and Russian languages only];

Replace “The key role of the State Environmental Inspectorate in the area of water supply and sanitation is to issue special water use and wastewater discharge permits and conduct environmental impact assessments. The Inspectorate is subordinated to the Ministry of Agriculture, Regional Development, and Environment.” with “The goal of the Environmental Protection Inspectorate is to implement the state environmental and natural resources management policy, exercise state control and supervision, and prevent and counter violations within its purview;

Add the following paragraph after the tenth paragraph:

“The Environmental Protection Agency is an administrative body within the jurisdiction of the Ministry of Agriculture, Regional Development, and Environment responsible for the implementation of the state policy in the areas it has been charged with, while achieving the best expected performance for budget allocations.”;

Add the following text to paragraph 4:

“The number of water supply systems increased by six in 2018 on a year-on-year basis. Thus, there were 1,220 water supply systems across the country in 2018. Out of the total number of water supply systems, 1,168 systems, or 95.7 percent, were operational and eleven water supply systems, of which ten in rural areas, were rehabilitated during the year.

Figure 9. Water Supply Systems Development Trend, 2014–2018 Number of systems

Total number of water supply systems Number of operational water supply systems Percentage of operational water supply systems

Work has been carried out annually to rehabilitate, retrofit, and expand the water supply systems. In 2018, total length of the water supply systems and distribution networks increased by 400 km to 14,400 km. 67.7 km of the networks were rehabilitated and 305.6 km of new networks were built. Given that not all the water supply systems have been operational, 14,200 km (98.6 percent) of the water supply networks were actually operated in 2018.

Residential users serviced by water supply systems. At present, water supply systems are available in 53 municipalities and towns and 721 settlements, which make up 50.5 percent of settlements in the country. About 51.2 percent of Moldovan villages have no access to a drinking water supply network and many of the existing systems have deteriorated.

The City of Chisinau and ATU Gagauzia ATU have the largest shares of settlements with access to a water supply system (85.7 percent and 78.1 percent, respectively). Access in the settlements in the Northern region is the lowest (35.3 percent).

Figure 10. Settlements Serviced by Water Supply Systems by Region, 2018

Total City of Chisinau ATU Gagauzia Southern region Central Northern region region

In 2018, about 2.1 mln people in the country, or 60.6 percent of the total population, used water supply services. The largest share of residential users serviced by the water supply systems was recorded in the city of Chisinau (88.1 percent) and ATU Gagauzia (78.4 percent), followed by the Southern region (64.4 percent), Central region (49.7 percent), and Northern region (43.9 percent).

Figure 11. Residential Users Serviced by Water Supply Systems by Region, 2018

Total City of Chisinau ATU Gagauzia Southern region Central Northern region region

Number of people connected to water supply services increased by about 242,400 consumers over the past three years.

Water intake and distribution. Water intake amounted to 131.2 mln m3 in 2018, of which from surface sources, 87.9 mln m3 (67.0 percent), from underground sources, 30.5 mln m3 (23.2 percent), and from other sources, 12.7 mln m3 (9.7 percent).

At the same time, water distributed to consumers amounted to 89.0 mln m3, up by 2.6 mln m3 compared to 2017. The difference was due to water used by the water intake facilities for their own needs and water losses during transportation.

Table 3. Water Distribution Network and Amounts, 2014-2018 2014 2015 2016 2017 2018 Number of settlements with access 480 689 695 761 774 to water supply systems Total length of drinking water 10,483.7 12,756.4 13,385.0 14,044.6 14,411.8 supply network, in kilometres, of which: Urban settlements 4,442.2 4,696.0 4,666.0 4,618.8 4,662.9 Rural settlements 6,041.5 8,060.4 8,719.0 9,425.8 9,748.9 Water distributed to consumers, in 74.3 79.5 84.8 86.4 89.0 millions of cubic meters, of which: Urban settlements 62.8 63.4 67.2 68.4 70.4 Rural settlements 11.5 16.1 17.6 18.0 18.6 Of which water supplied to 53.2 57.3 60.0 59.9 61.8 residential users, in millions of cubic meters, of which: Urban settlements 43.0 43.1 44.2 43.9 44.9 Rural settlements 10.2 14.2 15.8 16.0 16.9

Average water supply per capita per year is 17.4 m3. Water supply per person by region has been the largest in: the city of Chisinau — 41.5 m3; Southern region — 11.1 m3; ATU Gagauzia — 11.0 m3; Central region — 10.5 m3; and Northern region — 8.9 m3.

Residential users account for 61.8 mln m3, or 69.4 percent of the total water supply; budget institutions, 4.9 percent; and other consumers and economic entities, 25.7 percent. The amount of water supplied to residential users increased by 3.2 percent on a year-on- year basis.

Figure 12. Water Supply by Consumer Type, 2018

Residential users

Budget institutions

Other consumers

In 2018, 24,400 accidents related to damaged water supply networks were recorded, 10,700 fewer than in 2017.

Metered water consumption by individual end-users accounted for 85.1 percent at the country level with the highest levels in the Southern and Central regions at 96.2 percent and 92.7 percent, respectively.

Centralised sanitation systems1. In 2018, wastewater collection from households, economic entities, and social facilities was in place in 53 municipalities and towns and 73 villages. Just 126 water supply systems (10.3 percent of the total number) were equipped with sanitation systems, of which 110 were operational. Eighty-four sanitation systems are connected to wastewater treatment plants, of which 73 are operational. The situation with availability of wastewater treatment plants by region has been the best in ATU Gagauzia and Southern region. There are no wastewater treatment plants in Glodeni and Soroca regions.

Figure 13. Sanitation Systems Development Trend, 2014–2018 Number of systems

Total number of sanitation systems Number of operational sanitation systems Percentage of operational sanitation systems

Total length of the sanitation networks was 2,900 km, of which 2,800 km (96.6 percent) were actually operated. Total length of the sanitation network decreased by 1.7 km on a year-on-year basis. 16.2 km of the sanitation networks were rehabilitated and 71.3 km of the sanitation networks were built over the year.

Table 4. Sanitation Networks, 2014-2018 2014 2015 2016 2017 2018 Number of settlements with access to sanitation systems 136 141 140 148 126 Total length of the sanitation network, in kilometres, of which: 2,690.7 2,779.1 2,907.4 2,909.0 2,907.3 Urban settlements 2,186.7 2,232.6 2,351.1 2,400.4 2,407.6 Rural settlements 504 546.5 556.3 508.6 499.7 Treated wastewater, in millions of cubic meters, of which: 66.6 67.6 65.0 67.9 67.3 Urban settlements 65.3 65.4 64.1 67.4 66.9 Rural settlements 1.3 2.2 0.9 0.5 0.4

Residential users connected to the sanitation system. More than 1.0 mln people, or 29.3 percent of the total population, had access to the centralized sanitation systems in 2018. In urban areas, 979,600 persons, or 64.1 percent of urban population in the country, had access to the centralized sanitation systems, and in rural areas 57,300 persons, or 2.8 percent of the country’s rural population, used sanitation services.

Figure 14. Residential Users Serviced by the Sanitation Systems by Region, 2018

Total City of Chisinau Northern region ATU Gagauzia Central Southern region region

Wastewater collection. Wastewater collection totalled 69.5 mln m3 in 2018, of which residential users’ wastewater made up 57.2 percent, or 2.6 percentage points more than in 2017.

Figure 15. Wastewater Collected from Users, 2018

Residential users

Budget institutions

Other consumers

67.3 mln m3 of wastewater (96.9 percent) was delivered to wastewater treatment plants. 98.8 percent of the total amount of treated wastewater underwent mechanical treatment; 96.2 percent, biological treatment; and 4.1 percent was treated inadequately. 24,400 accidents in the sanitation networks were recorded during the year, 1,100 fewer than in 2017.

Notes: 1Centralized sanitation system is a set of functional facilities and equipment, and special tools used to provide public sanitation services. Public sanitation services include in particular the following components: public sanitation/sewerage network, pumping stations, wastewater treatment plant, and discharge sewers.”; d) In Chapter III:

Add the following paragraph to paragraph 1):

“Currently, water availability is not necessarily a constraint for development. However, lack of regulations regarding groundwater has had a major impact on water supply to residential users, industries, and agriculture, and groundwater quality and amount has not been clearly defined. Climate change has posed the most significant external risk to water security, and policy and legal frameworks to be developed will include solutions to prevent, respond to, and reduce the natural disasters the water sector has been exposed to”;

Add the following paragraphs to paragraph 2):

“Environment-related institutional reform of the central government was carried out in order to improve the implementation of sectoral policies, integrated water resources management plans in the river basins established in the Republic of Moldova, and assumed international commitments.

Using and implementing “the public water supply and sanitation services regionalisation” principle remains a challenge within the institutional setup of the local governments because it has been mistaken for the decentralization of such services.”;

Add the following paragraph to paragraph 3):

“Promotion of on-site sanitation systems has been weak. There is no institutional capacity to mobilize investment in building the water supply and sanitation infrastructure, implement the investment, or manage the built systems.”; e) In Chapter IV:

In paragraph 2):

Add the following subparagraph f):

“f) Achieve the Sustainable Development Goals (SDG 6.1 and 6.2) by 2030.”;

Add the following paragraph:

“Gender will be mainstreamed in water management and more active participation of women in water-related decision-making will be promoted with a view to developing respect for human rights, as well as securing the values of a rule-of-law state, growth, and sustainability of the society as a whole.”;

Word paragraph 3) as follows:

“3) Specific Objectives

8 a) Improve the management of public water supply and sanitation services

Management of the public water supply and sanitation services has evolved in recent years, especially regarding their setup and governance both institutionally and in terms of work practices.

Local governments have exclusive competence over creation, setup, management, and monitoring of the public water supply and sanitation services, as well as creation, administration, and operation of service-related communal technical infrastructure owned by the administrative territorial units.

Regionalisation of the water supply and sanitation services, currently fragmented and scattered, is a key element of the sector development policy. The regionalisation aims to ensure transition from a large number of service providers to a limited number of operators capable to provide sustainable and affordable services which will ensure recovery of investment costs with subsequent development of the water supply and sanitation systems.

According to the reports of the Chamber of Accounts, the state of environment and situation in the water supply and sanitation sector has been alarming and has reached a deadlock in the country’s settlements. The situation has been the most complex in rural areas with about 60 percent of the country’s population affected. Thus, rural settlements do not have centralised drinking water supply systems with rural population exposed to the risk of diseases due to lack of appropriate physiological conditions. At the same time, lack of sanitation systems leads to environmental pollution through contamination of surface and ground water. Financial position has been dire due to many factors (non-compliance with, and lack of regulatory framework for, efficient management principles; lack of drafted/approved development and investment strategies, business plans/income and expense estimates; and lack of monitoring of, and control over, administered assets) (Chamber of Accounts reports No. 14/2012 and No. 49/2017).

Rural settlements in the Northern, Central, and Southern regions rely mostly on groundwater which often fails to comply with regulatory requirements to drinking water quality. Key pollutants contained in groundwater are: fluoride, ammonia, boron, hydrogen sulphide, etc. Old pipes pose a constant risk of microbiological contamination. While water quality monitoring systems are in place in all the urban areas, rural settlements are only covered by irregular control tests conducted by the laboratories of the public health centres and the Environmental Protection Inspectorate. It is necessary to improve significantly drinking water quality through mobilization of investment in the infrastructure development and establishment of viable operators which together with local governments would address the current challenges of drinking water supply to the residential users and improve sanitation service quality. Although there are wastewater treatment plants in all the urban areas, most of the existing wastewater treatment plants have deteriorated and are not operational (Regional Sectoral Programmes for Water Supply and Sanitation in the Development Regions, 2014).

At the same time, water utility managers are encouraged to focus on taking stock of fixed assets and take action to keep records for the infrastructure. Water supply system infrastructure includes structures and equipment related to the water intake system and water storage, disinfection, and distribution up to the boundaries of property. Maintenance procedures in place are applied solely to keep a water supply or sanitation system operational. Currently, there are no clear maintenance procedures, there are just service rules. There are no procedures to plan large-scale 9 maintenance activities. By way of recommendation for operators it was proposed that a Master plan for water supply and sanitation should be prepared and feasibility studies should be conducted for water supply and sanitation options at the regional level, which suggest that water supply and sanitation services should be extended to rural settlements, which could be achieved through establishment of regional operators (diagnostic review reports prepared with the support from the USAID Moldovan Local Governments Support Project, 2014).

Regionalisation is based on inter-community cooperation through which local governments unite and cooperate in order to establish and manage jointly the water supply and sanitation services.

Water supply and sanitation-related activities at the regional level have the following advantages:

- Services are provided at the regional level using integrated systems which will lead to lower water leaks and will facilitate resource conservation principle, minimization [optimisation – translator remark] of investment, and protection of water resources;

- Enhanced opportunities to prepare and implement investment projects and negotiate financing;

- Better quality of services provided, customer relations, and operator perception by customers;

- Large-scale savings achieved through reduction of some costs: centralised billing and invoicing and financial management, centralised laboratory management, etc.;

- Operational management using modern and efficient management tools and lower impact of political factors on decision-making.

To date, regionalisation has been implemented within the administrative boundaries of regions and managed by major regional water supply and sanitation system operators which expanded their service areas to other administrative territorial units. As a result, eight regional operators have been established (Servicii Comunale Floresti JSC, Apa-Canal Leova JSC, Apa-Termo Ceadar- Lunga JSC, Regia Apa-Canal Orhei JSC, Regia Apa-Canal Soroca JSC, Amen- Ver Hincesti JSC, Apa Canal Nisporeni JSC, and Apa-Canal Cahul JSC), as well as an operator in the city of Chisinau (Apa-Canal Chisinau JSC). For instance, operator in Floresti (Servicii Comunale Floresti JSC) operates in thirty-four settlements in Floresti, Soldanesti, and Soroca regions. Local governments in Drochia, Edinet, Riscani, Falesti, Calarasi, Ungheni, and Criuleni regions have initiated regionalisation of the water supply and sanitation services. Remaining regions are at its various stages.

In a large number of regions in the country, it is necessary to conduct campaigns to raise local governments’ awareness about the national water supply and sanitation services development policy in order to create regional technically and economically powerful operators able to implement large investment projects and improve the quality of services provided to consumers.

Regulations and standards consistent with the European Union standards have been lacking in the water supply and sanitation sector, including for small-scale 10

systems in rural areas. Currently, the sector relies largely on the norms and rules applied in construction (construction norms and rules (SNiPs) and state standards (GOSTs)) which had been developed and used in the former Soviet Union. Those regulations are outdated and translate into oversized infrastructure with higher capital outlays and operating costs.

Amount and quality of water resources has a direct impact on the water supply and sanitation sector. Water balance simulation should be conducted for the water resources available in Moldova and transboundary water resources, which would help understand possible water shortages to ensure long-term sector development, water security, seasonal reliability of water supply and its affordability, which can be a constraint.

The sector policy builds on the national and international commitments of the country and requires rapid development of the sector. The commitments require that more stringent water supply and sanitation service standards be developed. One of the standards is economic regulation framework for the water supply and sanitation sector which is underdeveloped in the Republic of Moldova. Economic regulation can be defined as a set of rules, procedures, practices, institutions, standards, and norms which establish, control, and apply economic levers (tariffs, service standards) for the water supply and sanitation sector consistent with the national policy objectives.

The Republic of Moldova made important steps to develop the economic management framework for the sector, having passed Law No. 303/2013 on the Public Water Supply and Sanitation Services and having established a regulator, the National Energy Regulatory Agency (NERA), vested with relevant powers. However, a package of reference documents should be developed in order to create and introduce economic instruments for the water sector regulation, as well as to improve management of the services and manage water resources effectively. b) Plan and develop public water supply and sanitation systems to expand access of the population to high-quality services

Central government will identify sources of financing for the water supply and sanitation systems development, including in the state budget.

Responsibility for investment in the water supply and sanitation sector rests with the local governments which must take every measure necessary to retrofit, streamline, and develop their local infrastructure and enhance the reliability and quality of public water supply and sanitation services.

Given their limited financial capacity, it is necessary to plan thoroughly medium- and long-term investment through development of short- and medium-term investment programmes aligned with urban development plans, goals of spatial planning and social and economic development strategies, budgeting and regulatory process, and international commitments of the Republic of Moldova related to water supply and sanitation, environment, etc.

Integrated/centralised water supply systems will be promoted within the framework of regional administration, and sanitation systems, based on the identified agglomerations in order to streamline investment and operating costs related to such investment. To achieve this objective, the administrative territorial units will be 11

grouped and they will prepare a long-term joint investment programme to develop the water supply and sanitation sector.

The objective for 2020-2024 is to ensure coverage with the water supply and sanitation infrastructure at 80 percent [of population] in urban areas and 75 percent in rural areas.

c) Harmonize the national water supply and sanitation legislation with the Community standards and international commitments

Measures will be taken to improve, revise, and adjust the legal framework for public water supply and sanitation services through the implementation of the European water management principles and enhancing the responsibility of local and central governments to ensure high-quality public services.

Challenges faced by the water supply and sanitation sector should be addressed urgently and rules and measures to improve them should be developed as follows:

- Draft and/or revise regulations to harmonise the national legislation with the European Union acquis and deliver on the country’s other international commitments (including the 2030 Agenda SDG 6 and Paris Agreement on Climate Change);

- Amend the legislation with a view to implementing the sector regionalisation policy so that associations of the administrative territorial units and regional operators could be established and could operate based on simple and uniform procedures both institutionally and in terms of the delegation of service management and competencies the associations have been vested with;

- Develop economic instruments for management and support of goals set by policy papers on the water supply and sanitation sector and for social support of vulnerable and marginalised user groups to ensure fair access to safe and affordable drinking water as a basic human right;

- Apply the “polluter pays” and “user pays” principle in order to protect natural ecosystems, water resources, and human health”; f) In Chapter V:

In paragraph 1:

Add subparagraph d) in the seventh paragraph:

“d) Exercise control in order to monitor and inspect performance of the operators holding licenses to ensure compliance with the legislation in force governing the water supply and sanitation sector;”

Add the following language after the seventh paragraph:

“Economic regulation of the water supply and sanitation sector can be defined as a set of rules, procedures, practices, institutions, standards, and norms which establish, control, and apply economic levers (tariffs, service standards) for the sector. Since centralised water supply and sanitation system is a natural monopoly, economic regulation of the sector is carried out either through a contract (e.g. public-private partnership agreement not yet used [in the country]) or by a competent regulatory body (i.e. a professional 12

regulator). The Republic of Moldova made important steps to develop the economic regulation framework for the sector, having passed Law No. 303/2013 on the Public Water Supply and Sanitation Services under which the National Energy Regulatory Agency was established in 2014. However, reliable economic regulation instruments (ERIs) are not just a regulatory institution but also include many other dimensions:

- Economic efficiency, i.e. resource management to achieve the best performance;

- Cost recovery, i.e. income generation to cover operational, administrative, and operating costs;

- Equitable servicing of all the clients and ruling out misuse of the natural monopoly position;

- Financial stability, i.e. minimizing income fluctuation;

- Conservation and efficient use of natural resources by using relevant economic and environmental incentives;

- Social focus of the water supply and sanitation services without turning water utilities into a social protection body;

- Eliminating unreasonable authority in the area of environmental protection, public services, and in the social sphere;

- Simplicity and visibility.

In order to achieve the above outcomes, it is necessary to ensure:

- Proper governance by the regulator;

- Proper integration of all the ERI components, their coordination and nexus.”;

Add the following paragraph after the thirteenth paragraph in paragraph 2:

“Centralized water supply and sanitation infrastructure in urban and rural areas (total required and maximum daily consumption of water and wastewater discharges) will be planned with due account for water demand derived from the feasibility study calculations. The calculations should be made based on the regulations approved by the central government authority responsible for design and building activities. Optimal option for the proposed infrastructure development solution is determined based on the least investment costs and cost reduction with due account for input, labour, electricity, and fuel costs and the possibility to lower them during both construction and operation. Calculations of all the costs related to the establishment and operation of the systems should be based on the likely implications of the environmental impact of the water supply and sanitation systems and the life time of the infrastructure.”;

Add the following language to paragraph 3:

“A key prerequisite for improving the setup of public services is cost effective scale of operator activities with due account for existing sources of water supply, water supply and sanitation infrastructure, technical sanitation facilities, and administrative territorial division of the country.

Optimal service areas for such operators will be determined with due account for the approved methodology to delineate “agglomerations” and relevant sensitive areas and the fact that historically water supply and sanitation services have been vertically integrated (i.e. provided by the same operator) in the Republic of Moldova.

At the same time, regional utilities’ operations could be supplemented by small private operators operating within the framework of public-private partnership model or otherwise.

“Regionalisation” of public water supply and sanitation services will be implemented mostly based on, and using, economic and tax incentives, except where “regionalisation” is not a pressing need due to a single source of water supply, specific water supply and sanitation technology, or for another compelling reason.

Central and local governments will provide advice within their purview to implement this Strategy in order to apply the “regionalisation” principle, including: i) stock-taking and technical assessment of fixed assets; ii) state registration of asset ownership; iii) creating legal and regulatory framework for delegation of fixed assets management to water operators; iv) preparing a package of standard documents for the operators, including a list of performance indicators, etc.

Operator performance will be assessed based on the generally accepted performance indicators framework (benchmarking) created at the national level with due account for the international practices for the benefit of public authorities delegating service management and informing the general public and the Government of the Republic of Moldova about performance of the water operators and water supply and sanitation sector as a whole.”; g) Add the following language to Chapter VI:

“Water supply and sanitation sector is funded from the state budget and supported by external donors. Financial investment in the sector in 2013–2019 is shown in the table below which includes sub-programme 7503 “Water Supply and Sanitation” budget line data.

Figure 16. State Budget Allocations to the Water Sector

Source: Institutional Capacity Building in the Water Supply and Sanitation Sector in the Republic of Moldova (Swiss Agency for Development Cooperation and Austrian Development Agency). 14

The National Environmental Fund was established to raise additional resources to finance environmental and ecosystem restoration projects. In this context, the Government places high hopes on the profit ratio of the Fund resources and their impact on the state of environment in the Republic. Three hundred and six water supply and sanitation projects worth a total of MDL 734,585.083 financed by the National Environmental Fund were launched in 2016-2019. 1,010.46 km of water supply networks, 293.77 km of sanitation networks, sixteen wastewater treatment plants, five water treatment plants, and twenty- one artesian wells were built.

In the context of drafting the 2020-2022 Medium-Term Budgetary Framework, about MDL 600 mln has been budgeted in the National Environmental Fund and MDL 290.71 mln in the National Regional Development Fund to implement water supply and sanitation projects.

Financial compensation alone is not enough to restore water resources. A key principle of the EU Environmental Liability Directive is that damaged natural resources, ecosystems, and ecosystem services must be restored in kind (where feasible and cost effective). In this context, it is recommended to consider developing a mechanism to replace the practices of levying charges for water pollution with wastewater discharges with exceedance of maximum allowable concentrations of pollutants with those of compensating for negative impact by restoring a receiving water body to its original status. The concept of “damage caused to a water body” should be enshrined in law separately and be extended to cover water resources degradation and depletion.

Access to water and sanitation in the Republic of Moldova is determined mostly by area of residence and income. Most poor households are in rural areas and income inequality is the most important driver of inequality of access to water supply and sanitation. According to the National Statistics Bureau and national opinion polls, the most significant inequality of access to water supply and sanitation is related to income inequality (income inequality would have been smaller but still significant if access of poor households could be comparable to that of middle-income households). It is followed by inequality based on disabilities and that based on the opportunity of access by Roma and non-Roma. Gender-based inequality appears less pronounced.

Figure 17. Inequality at the Community Level

Inequality at the community level

Gender-based inequality (male and female, in percent) Disability-based inequality (households without persons with disabilities; households with one person with disabilities, in percent) Income-based inequality (high-income households; low-income households, in percent) Roma/non-Roma inequality (non-Roma households; Roma households, in percent)

Water supply Sanitation

Access inequality has been reducing steadily over the past decade. This is largely due to continuous investment in rural communities. Given that most poor households are in rural areas, inequality of access in rural areas has reduced, so did income-based inequality.

Figure 18 Figure 19

Inequality of access to water supply services and Inequality of access to water supply services and sanitation system (rural areas vs. urban areas) sanitation system (20 percent of the poorest vs. 20 percent of the poorest)

Public water supply Sanitation system Public water supply Sanitation system

Another specificity of inequality of access to the services is intra-community inequality as shown in the figure below. It is the difference between the percentage of households reporting that a service (e.g. centralised drinking water supply system) is available in their community and percentage of households which have and use such service.

Intra-community inequality helps to understand better the level of inequality because availability of a service in a community is a precondition for receiving the service by a household.

Figure 20. Intra-Community Inequality

Available in Household Intra-community Available in Household Intra-community the community has access inequality the community has access inequality

Roma Non-Roma

Inequality for Roma is due to both exclusion and discrimination. About 47 percent of the Roma believe their access to public services has been limited because they belong to this ethnic group. Such a large number of Roma holding such view can only reflect the fact that such practices exist in real life. The most pronounced inequality has been confirmed by the Roma and persons with disabilities. The figure below shows affordability-based distance among (inequality of) community groups. The most vulnerable groups are: Roma, persons with disabilities, the poor, and persons of pre-retirement age (most likely engaged in the subsistence agriculture).

Figure 21. Affordability-Based Inequality of Community Groups

Roma

Persons with disabilities

Poor Aged 30-44 Non-Roma Aged 45-59 Persons, other than those Female with disabilities Male

prohibitive Aged 18-29 Rich

Percentage of persons ofPercentage who

consider water supply expenses consider supply expenses water

Percentage of persons who consider sanitation expenses prohibitive

Source: Unequal Moldova, 2019.

h) Add the following paragraphs after the second paragraph in Chapter IX:

“This Strategy will be implemented consistent with the Action Plan set forth in Attachment No. 11. Responsibility for the implementation of the Strategy is vested with the institutions specified in the Action Plan for the current period according to their purview.

The Action Plan is the main mechanism for the implementation of this Strategy. Planned actions aim to achieve specific objectives, and delivery of the actions will be assessed based on compliance with the timeframe and indicators set for each action”;

4) Add the following Attachment No. 11: “Attachment No. 1 to Government Resolution No. 199/2014 Action Plan for 2020-2024 for the Water Supply and Sanitation Strategy for 2014-2030

Tentative cost, Sources of finance in MDL In thousands of Moldovan lei Responsible Progress No. Action Timeframe Partners institution indicators To be Total raised External Public from sources budget external sources

1 2 3 4 5 6 7 8 9 10 Specific objective 1: Improve the management of public water supply and sanitation services Take measures to raise awareness and build local Q4, 2023 capacity in the water supply and sanitation sector: Swiss Agency - Conduct awareness-raising campaigns in for relation to the national sector development policy Ministry of Development and stages of its development; Agriculture, Twelve seminars, and - Prepare a package of documents necessary for Regional awareness-raising 1.1 Cooperation, 1,518 1,518 the entire regionalisation process; Development, campaigns, Austrian - Provide methodological assistance to the local and guidelines Development governments with water supply and sanitation Environment Agency, local service regionalisation; governments - Provide methodological assistance to the regional operators to build institutional capacity. Q4, 2020 Swiss Agency Develop a package of technical reference Ministry of for documents regarding the water supply and Agriculture, Development Approved package sanitation system operation and maintenance: Regional 1.2 and of technical 810 810 Instruction on the Disinfection of Drinking Development, 1. Cooperation, documents Water and Wastewater, Flushing and and Austrian Disinfection of Water Tanks and Pipes. Environment Development 18

1 2 3 4 5 6 7 8 9 10 2. Temporary Norms for Maintenance and Agency, Repairs of Water Supply and Sanitation Moldova Apa- Systems. Part I "Water Supply and Sanitation Canal Networks and Facilities". Association 3. Temporary Norms for Engineering Networks and Equipment Accident Response. 4. Consumption Norms for Materials Used for Maintenance and Repairs of Water Supply and Sanitation Plant and Equipment. 5. Recommended Temporary Norms and Rules for Maintenance and Cementing of Non- Centralized Sources of Water Supply (Mine and Pipe Wells, Spring Outlets). 6. Occupational Safety Rules for the Operation of Water Supply and Sanitation Systems in the Republic of Moldova. 7. Instruction on Creating Stocks of Spare Parts, Materials, and Equipment to Replace Damaged Equipment and Restore Drinking Water and Sanitation Systems. Norms for Spare Parts, Materials, and Equipment for Repairs at Water Utilities. 8. Regulations Regarding the Number of Staff of Water Supply and Sanitation Companies. 19

1 2 3 4 5 6 7 8 9 10 Develop a study on improving the use of economic instruments for management of water resources and water supply and sanitation sector, including: 1. Developing a roadmap, including: Ministry of European - Identification and assessment of economic Agriculture, Union; instruments for management of water resources Regional Organisation and water infrastructure in the Republic of Approved study; Development, for Economic Moldova; Q2, 2020; developed and 1.3 and Co-operation 850 850 - Preparing proposals to improve the use of Q3, 2021 approved Environment in and economic instruments and management methodology cooperation Development; mechanisms; with local and local - Key findings, recommendations, and proposals governments governments to improve the use of economic instruments for management. 2. Developing a methodology to assess and apply damage caused to water resources by violation of water legislation. Ministry of Monitor drinking water quality, including water On a Published Within the Health, Labour, 1.4 security indicators, with a view to improving continuous periodical existing and Social water services basis monitoring reports budget Protection 20

1 2 3 4 5 6 7 8 9 10 Develop and approve new design and Ministry of construction rules for small-scale sanitation Economy and European Developed and systems (up to 2,000 PE), including on-site Infrastructure; Union; approved design sanitation. Ministry of Organisation and construction 1.5 CP G.03.08:2020 Water supply and sanitation Q4, 2020 Agriculture, for Economic 500 500 norms for small- systems and networks. Regional Co-operation scale sanitation Design and construction of outdoor water supply Development, and systems systems for small settlements with consumption and Development below 200 m3/day. Environment Ministry of Develop water security outlook diagnostic study Agriculture, through comprehensive analysis of water Approved study Regional 1.6 management opportunities to capitalize on the Q2, 2020 World Bank Fifteen trained 2,000 2,000 Development, best outcomes for the environment, economy, and professionals and the population. Environment Conduct training in the simulation of Moldovan river basins using WEAP/Water Evaluation and Planning System Specific objective 2: Plan and develop public water supply and sanitation systems to expand access of the population to high-quality services Ministry of Prepared design Local Prepare design documentation and build Agriculture, documentation 2.1 Q4, 2022 governments, 320,466 320,466 Chisinau–Straseni-Calarasi water supply system Regional and built water KfW Development, supply system 21

1 2 3 4 5 6 7 8 9 10 and Environment

Ministry of GIZ, National Agriculture, Build/rehabilitate water supply systems in the Regional Built and Regional 2.2 town of Iargara, Filipeni, Romanovca, and Q4, 2020 Development operational water 51,000 51,000 Development, Cupcui villages, Leova region Fund, Leova supply systems and Region Council Environment Ministry of Prepared design Agriculture, Local documentation, Prepare design documentation and build water Regional 2.3 Q3, 2023 governments, kilometres of 653,800 653,800 supply infrastructure in Cahul region Development, KfW water supply and networks built Environment Swiss Agency Ministry of for Built centralised Agriculture, Development water supply Build Cahul-Lebedenco water supply system and Regional 2.4 Q4, 2020 and system; kilometres 50,000 50,000 water supply networks in Lebedenco commune Development, Cooperation, of water supply and local networks built Environment governments 22

1 2 3 4 5 6 7 8 9 10 Ministry of Prepare design documentation for Cahul, Pelinei, Agriculture, European Prepared and Gavanoasa, Alexandru Ioan Cuza, Vulcanesti Regional Union/GIZ; 2.5 Q2, 2020 approved design 6,000 6,000 water supply system and distribution networks in Development, local documentation Pelinei and Gavanoasa villages and governments Environment Ministry of Agriculture, European Kilometres of Build water supply and distribution network in Regional Union/GIZ; built water supply 2.6 the settlements of Pelinei, Gavanoasa, Alexandru Q4, 2023 57,700 57,700 Development, local and distribution Ioan Cuza, Cahul region and governments networks Environment Ministry of Turkish Prepared and Agriculture, International approved design 2.7 Prepare design documentation and build water Q2, 2023 Regional Cooperation documentation; 96,600 96,600 supply infrastructure in the town of Vulcanesti Development, Agency kilometres of built and (TICA); local water supply Environment governments networks Ministry of Prepared and Prepare design documentation and build water Agriculture, European approved design supply and sanitation infrastructure in Leova, Regional Union/GIZ; 2.8 Q4, 2020 documentation; 615,360 615,360 Cahul, Calarasi, Ungheni, Drochia, Rascani, Development, local kilometres of built Falesti, and Edinet regions and governments water supply and Environment 23

1 2 3 4 5 6 7 8 9 10 sanitation networks

Ministry of Prepared and Agriculture, Austrian approved design 2.9 Prepare design documentation and build Q4, 2023 Regional Development documentation; 115,380 115,380 sanitation infrastructure in the town of Cantemir Development, Agency; local kilometres of built and governments sanitation Environment networks Ministry of Number of Agriculture, National settlements Build/rehabilitate water supply and sanitation Regional Environmental connected to water 2.10 systems from the National Environmental Fund 2020-2022 Development, 561.25 561.25 Fund; local supply and/or sources and governments sanitation systems Environment

Ministry of Number of Agriculture, National settlements Build/rehabilitate water supply and sanitation Regional Regional connected to water 2.11 systems from the National Fund for Regional 2020-2022 Development, Development 290.71 290.71 supply and/or Development sources and Fund; local sanitation systems Environment governments

1 2 3 4 5 6 7 8 9 10 Apa Canal Chisinau JSC, Ministry of Chisinau Agriculture, Mayor’s Rehabilitated Rehabilitate wastewater treatment plant in the Regional Office, 2.12 Q3, 2021 wastewater 465,400 465,400 city of Chisinau Development, European Bank treatment plant and for Environment Reconstruction and Development Specific objective 3: Harmonize the national water supply and sanitation legislation with the Community standards and international commitments Revise Government Resolution No. 950/2013 on Ministry of approval of the Regulation regarding Agriculture, Within the Requirements to Wastewater Collection, Regional Approved 3.1 Q2, 2020 existing Treatment, and Discharge into Sanitation System Development, regulation budget and/or Sewage Intake Basins for Urban and Rural and Settlements Environment Ministry of Health, Labour, Revise Government Resolution No. 1063/2016 on and Social Within the 3.2 Approve the National Program to Implement the Q2, 2020 Protection; European Approved 860 860 existing Protocol on Water and Health in the Republic of Ministry of Union regulation budget Moldova for 2016-2025 Agriculture, Regional Development, 25

1 2 3 4 5 6 7 8 9 10 and Environment

Ministry of Within the Agriculture, existing Develop a technical and investment programme Development Developed and Regional budget 3.3 to comply with the municipal wastewater Q4, 2024 partners; local approved 1,300 1,300 Development, and treatment requirements governments programme and routine Environment work Ministry of Agriculture, Within the 3.4 Develop a methodology to identify and establish Q2, 2020 Regional Development Approved existing sensitive areas Development, partners methodology budget and Environment Ministry of Agriculture, Within the 3.5 Develop a methodology to identify Q2, 2020 Regional Development Approved existing agglomerations Development, partners methodology budget and Environment Ministry of Swiss Agency Within the Establish State Water Cadastre Automated Established 3.6 Q3, 2020 Agriculture, for 1,918.3 1,918.3 existing Information System system Regional Development budget 26

1 2 3 4 5 6 7 8 9 10 Development, and and Cooperation; Environment Austrian Development Agency Ministry of Revise the regulatory framework for Agriculture, Revised and Within the issue/revocation of authorizations for activities Regional 3.7 2021 approved existing related to preparing technical documentation in Development, regulations budget the water supply and sanitation sector and Environment Ministry of Agriculture, Unify standards for (digital and analogue) Number of drafted Within the Regional 3.8 datasets for technical documentation in the water 2021 and approved existing Development, supply and sanitation sector regulations budget and Environment Ministry of Agriculture, Land Use and Develop and approve standards for water supply Number of drafted Within the Regional Management 3.9 and sanitation physical infrastructure spatial 2021 and approved existing Development, and Cadastre datasets regulations budget and Agency Environment 27

1 2 3 4 5 6 7 8 9 10 Develop a concept paper on the Urban Functional Land Use and Ministry of Prepared and Within the Cadastre Automated Information System to Management 3.10 2021 Economy and approved concept existing ensure recording and update of physical and Cadastre Infrastructure paper budget infrastructure datasets Agency Total 2,338,471.25 2,336,320 1,300 851.25 ”

2. This Resolution shall take effect on its publication date.

Prime-Minister Ion CHICU

Countersigned by:

Minister of Agriculture, Regional Development, and Environment Ion Perju