EUROPEAN COMMUNITY CONTRIBUTION AGREEMENT WITH AN INTERNATIONAL ORGANISATION EUROPEAID / DCI-ENV / 2011 / 260-062 OECD - UNECE ANNUAL REPORT (June 2013-May 2014) July 2014 Table of contents 1. Summary and context of the project ...................................................................... 4 2. Background of the project ...................................................................................... 6 3. Annual report on the implementation of the EUWI EECCA Component ............. 7 3.1 Work package 1 (Promoting the political commitment in EECCA countries at national level towards action and innovation-oriented partnership) ...................... 7 3.2 Work package 2 (Development of a robust analytical basis to substantiate policy dialogues; elaboration of the policy packages) ........................................... 7 3.3 Work package 3 (Benchmarking and exchange of experiences) ................... 18 3.4 Work package 4 (Dissemination of the project information and stakeholder involvement) ........................................................................................................ 19 4. Difficulties encountered and measures taken to overcome problems .................. 20 5. Changes introduced in the project implementation ............................................. 20 6. Achievements and results .................................................................................... 20 1. Summary and context of the project The European Union’s Water Initiative (EUWI) is a political initiative which seeks to assist partner countries in the development and implementation of policies, strategies and priorities for the water and sanitation sector which donors could align with and support. The Initiative ensures that existing resources are more effectively utilised and new resources are attracted in the sector to meet the specific requirements of individual developing countries and river basin organisations. The EUWI EECCA is the regional component of the EUWI focused on Eastern Europe, the Caucasus and Central Asia (EECCA). It supports work of the European Neighbourhood Policy and of the EU-Central Asia Platform for Environment and Water Cooperation. In addition, it helps to promote the progressive approximation to EU water policies, particularly to the EU Water Framework Directive, in EECCA countries. Implementation of the EUWI EECCA is facilitated through activities of the Organisation for Economic Co-operation and Development (OECD) and the United Nations Economic Commission for Europe (UNECE). OECD is the strategic partner for economic and financial aspects of water resources management, including water supply and sanitation (WSS). UNECE is the strategic partner for integrated water resources management (IWRM). OECD and UNECE have actively promoted water policy reforms under the EUWI over the past decades. Jointly the two organizations have a good experience on how to initiate and sustain policy reforms that are well adapted to the situation in EECCA countries (see OECD, 2011, Ten Years of Water Sector Reform in EECCA, for a review of recent experience). The current action builds on outcomes and the political momentum initiated by the OECD and UNECE under the EU-funded contract DCI-ENV/2008/149-674, carried out in 2008-2012. That project supported mapping of the situation and initiation of National Policy Dialogues on water in eight EECCA countries. The dialogues are continued in Armenia, Azerbaijan, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Tajikistan, Turkmenistan and Ukraine; and at a sub-sovereign level in Russia (Republic of Buryatia, Lake Baikal basin). Negotiations with Uzbekistan are ongoing about joining the process of National Policy Dialogues in 2014, eventually. An Uzbek delegation visited UNECE in Geneva in May 2014 to discuss possible options. Considerable amount of work has materialised during the activity period of 1 June 2013 - 31 May 2014. Dialogues are active in ten countries, and are substantiated by significant analytical work (see Table 1 below). A number of policy outputs have already been delivered and are being implemented. Some of the major directions of work and key outputs include: In Tajikistan, the Water Sector Reform Strategy was finalized in 2013 and its implementation started in late 2013. A major institutional change unfolded: policy- making is now severed from operations; the former stays with the Ministry of Energy and Water Resources, while the latter are devolved to the newly established Agency of Irrigation and Land Reclamation. In parallel, a legal working group finalized a detailed report in December 2013 about necessary changes to implement IWRM, including adjustments in the Water Code. In Georgia, the new Water Law was drafted and went through thorough discussions with different governmental agencies and other stakeholders (the draft law will be handed to Parliament in summer of 2014). In Turkmenistan, the new draft Water Code was finalised by the legal working group in May 2013, bringing it in line with main principles of IWRM. In the second part of 2013, consultations were held with relevant ministries and agencies to accommodate their comments. National Parliament started preparations for adoption of the Code in January 2014. Work on strengthening the use of economic instruments for water management was completed at national level in Armenia and Kyrgyzstan and is underway at sub sovereign and basin level in Russia (Republic of Buryatia, Lake Baikal basin) and at transboundary level (in Armenia, Azerbaijan and Georgia); A new project was launched in Moldova, with a view to streamline domestic financial support mechanisms for water supply and sanitation. In addition to analytical work, the OECD and UNECE have organised or have participated in a series of meetings: 11 high-level EUWI NPD Steering Committee meetings, in 7 countries; The EUWI multi-stakeholder seminar at the World Water Week (September 2013 in Stockholm, Sweden); The 17th meeting of the European Union Water Initiative (EUWI) Eastern Europe, Caucasus and Central Asia (EECCA) Working Group (24-25 October 2013 in Helsinki, Finland); The plenary session of the Third Meeting of the Parties of the Protocol on Water and Health, dedicated to NPDs (26 November 2013 in Oslo, Norway). A communication strategy was developed and communication activities have remained strong towards different target groups. A brochure was prepared on achievements of the EUWI in EECCA since 2006. It has been (and will be) disseminated in all events where the OECD and UNECE participates on the region. It is available for other partners as well. Table 1. Main activities under the ongoing IWRM & WSS NPDs Instruments/frameworks AM AZ GE KG KZ MD UA RU TJ TM Water Framework Directive’s principles. x x x x x x x x x EU Urban Wastewater Directive UNECE Water Convention (transboundary waters) x x x x x UNECE-WHO Protocol on Water and Health x x x x x x x Climate change adaptation (EU, OECD and UNECE x x instruments) EU Flood Directive/UNECE instruments x Institutional frameworks (e.g. River Basin Councils) x x x x Overcoming fragmentation in, and sustainable business x models for WSS systems Economic instruments for, and financing of, water resources x x x x management New water legislation/strategy on IWRM x x x x x 2. Background of the project The project is aimed at achieving the water related Millennium Development Goals (MDGs) in the EECCA countries as well as specific targets on water management set up in the EU Water Policy, Neighborhood Policy, Eastern Partnership and the EU Central Asia Strategy country programmes. The project is assisting the target countries in adopting a more integrated approach to water management, addressing the current fragmentation of water resource management and improving multi-stakeholder participation. It identifies and removes some of the key hurdles that impede the deployment of IWRM, while reflecting countries' level of socio-economic development. In the targeted countries, OECD and UNECE are closely cooperating to advance policy reforms in the field of IWRM and/or WSS. Activities usually take the form of national policy dialogues (NPDs), aimed at developing and implementing water policy reforms in EECCA countries. In particular, NPDs help elaborate policy packages (government strategies, laws, regulations), as well as monitor implementation of the adopted policy packages; the latter is essential, as implementation remains a major bottleneck in EECCA countries. The NPDs also serve as national mechanisms for coordination of the development aid and technical assistance in the water sector. They contribute to a more efficient use of EU and other development aid and technical assistance in the region. Another specific objective is to support the organisation of annual meetings of the EUWI EECCA Working Group, which serves as a platform for dissemination and experience sharing. 3. Annual report on the implementation of the EUWI EECCA Component 3.1 Work package 1 (Promoting the political commitment in EECCA countries at national level towards action and innovation-oriented partnership) Work package 1 aims at strengthening the political commitment of governments in EECCA countries to water sector reforms. This is achieved through high-level policy dialogues on water policies. Activities include: continuation of high-level policy dialogues; annual meetings of the NPDs Steering Committees (SCs) in recipient countries. Activities under this Work package are bundled with Work package