Transboundary Diagnostic Analysis Thematic Report on the Resource Nexus (Phase I of the Water-Food-Energy-Ecosystems Nexus Assessment of the Drin Basin) In the framework of: Memorandum of Understanding for the Management of the Extended Transboundary Drin Basin GEF Project “Enabling Transboundary Cooperation and Integrated Water Resources Management in the Extended Drin River Basin” The Coordinated Action for the implementation of the Memorandum of Understanding for the management of the Drin basin (Drin CORDA) is supported by the GEF Drin Project. Thus, the latter constitutes an institutional project implemented by the United Nations Development Programme (UNDP) and executed by the Global Water Partnership (GWP) through GWP-Mediterranean (GWP-Med), in cooperation with the United Nations Economic Commission for Europe (UNECE). The Drin Core Group (DCG), being the multilateral body responsible for the implementation of the Memorandum of Understanding serves as the Steering Committee of the Project. GWP- Med serves as the Secretariat of the DCG. Disclaimer: The document adheres to the UN rules and policies regarding the names and international status of countries and/or other geographical areas etc. The use of characterizations, names, maps or other geographical statements in this document in no way implies any political view or positions of the Parties which are executing and implementing the Project. For more information, please contact Web: www.gwpmed.org Headquarters: 12, Kyrristou str., 10556 Athens, Greece T: +30210-3247490, -3247267 F: +30210-3317127 Authors: Lucia de Strasser with input from Stephen Stec, for UNECE Water Convention Contents 1. Introduction .................................................................................................................................................... 3 1.1 Aim and objectives of the nexus thematic report .................................................................................... 4 1.2 Rationale of the report and link to TDA ................................................................................................... 6 1.3 Structure of the report ............................................................................................................................. 8 PART 1 ..................................................................................................................................................................... 9 2. The Drin basin and the socio-economic situation ........................................................................................... 9 2.1 Geography, topography, and hydrology .................................................................................................. 9 2.2 Administrative borders, settlements, and population............................................................................ 12 2.3 Socio-economic situation ....................................................................................................................... 13 3. Overview of the natural resources, availability and uses ............................................................................. 16 3.1 Water resources ..................................................................................................................................... 16 3.2 Land resources ....................................................................................................................................... 20 3.3 Energy resources .................................................................................................................................... 25 3.4 Environment and Ecosystems................................................................................................................. 31 4. National governance framework.................................................................................................................. 34 Box 1: Governance in Nexus Assessment ..................................................................................................... 35 4.1 National governance context ................................................................................................................. 36 4.2 Horizontal and strategic policies and legal frameworks ........................................................................ 38 4.3 Nexus-relevant policy ............................................................................................................................. 41 4.4 Institutional setting ................................................................................................................................ 55 4.5 Cross-sectoral governance ..................................................................................................................... 59 5. International policy, cooperation, and trade ................................................................................................ 64 5.1 Global standards and regional regimes relevant to nexus ..................................................................... 64 5.2 Basin level transboundary cooperation ................................................................................................. 69 5.3 Cross-sectoral coordination at Drin Basin level ...................................................................................... 71 5.4 Regional trade ........................................................................................................................................ 72 PART 2 ................................................................................................................................................................... 77 6. Hydropower and flooding ............................................................................................................................. 78 Box 2 Hydropower at the crossroad ............................................................................................................. 79 6.1 The importance of hydropower operation to flood management ......................................................... 81 Box 3: The GIZ project Climate Change Adaptation in Transboundary Flood Risk Management in Western Balkans ......................................................................................................................................................... 83 6.2 Implications of a “flood-smarter” hydropower sector ........................................................................... 83 1 7. Biomass and forest management................................................................................................................. 86 7.1 Issues in the wood biomass value chain ......................................................................................... 88 7.2 Modern wood energy for sustainable forest management ................................................................... 89 8. Evolution of agriculture and irrigation ......................................................................................................... 91 8.1 Water and agriculture ............................................................................................................................ 92 8.2 The potential impact of agricultural developments and trade .............................................................. 92 9. Conclusions .................................................................................................................................................. 95 Annex 1 Lis of large reservoirs for hydropower production in the Drin River Basin .............................................. 97 Annex 2 Reporting from thematic group discussion at the 16th Stakeholder Conference for the Drin River Basin .............................................................................................................................................................................. 99 Annex 3 Water-Energy modelling for Phase 2. Scenario description .................................................................. 104 Figure 1. The Drin Nexus Assessment Process ....................................................................................................... 6 Figure 2. Extended Drin River Basin topography .................................................................................................. 10 Figure 3. The Extended Drin River Basin and its sub-basins .................................................................................. 11 Figure 4. Area distribution by sub-basins (area of inland waters included) and shares of country portions for each basin ............................................................................................................................................................. 11 Figure 5. GDP per capita, PPP (EU 28= 100) ......................................................................................................... 14 Figure 6. Structure of Gross Value Added (GVA) by type of economic activity (state level; averages for 2011- 2015) ..................................................................................................................................................................... 14 Figure 7. Employment by economic activity in Kosovo, North Macedonia, and Montenegro (2016; % of total employment) ......................................................................................................................................................... 15 Figure 8. Overall management of the wastewater