BratislavaRegionalCenterfor Europe & CIS

PSPD, Energy & Environment Practice

– Regional Project Document –

Strategic Workplan (2006/07) for
StrengtheningtheWater Governance Sub-Practice
in Europe & CIS

Section I – Narrative

Part I.Situation Analysis

I A.Water Resources management in Europe and CIS

Water resources represent a critical ingredient of economic development in the RBEC region, providing water for consumption, sanitation, irrigation, industrial use, transportation, fishing & aquaculture, recreation, and other amenities. Water-based ecosystems are central to the RBEC region’s natural environment, including lakes, river basins, wetlands, seas and costal areas, and groundwater systems, many containing globally significant biodiversity. Concurrently, many aquatic ecosystems in Europe and CIS have suffered serious degradation or are threatened by pollution (surface and groundwater, point and non-point source), over-harvesting of surface and groundwater, invasive species, and habitat loss. Achieving a balance between meeting the water demands of human societies, and the needs of the aquatic ecosystems on which those societies ultimately depend, remains a key challenge.

Major portions of the region are presently undergoing one of the largest-scale economic and social integration processes in human history, through the expansion and further consolidation of the European Union. This process includes adaptation and harmonization of member country’s policies, legislation and institutions to EU norms, including those in the water sector through the EU’s Water Framework Directive (WFD), considered among the most advanced water governance regimes in the world. Particularly the new EU-member states and aspirants in Central and Eastern Europe face a number of new requirements and challenges in adhering to the WFD norms and initiating the required policy reforms. Many of the remaining countries orient themselves– more or less voluntarily[1] – on requirements of the EU WFDwith regard to water governance related affairs. However, some countries still individually cope with, and adapt inherited water governance modalities that were to a large extent designed in the geographical and political context of the Soviet Union.

The fall of the former Soviet Union poses additional challenges on a good part of the countries in the RBEC region.They are still coping in one or the other way with the legacies and the aftermaths from separation of provinces into independent nations, with international new international borders dividing water catchment areas. To take an example, the vanished central responsibility forinfrastructure maintenance and operation (M&O), combined with the fact of no-cost basis for water supply and sanitation (WSS) services, has lead to the deterioration of the majority of water and sanitation installations and a wide confusion about soles and responsibilities of the new emerging government structures.

Despite similarities (e.g. water pricing issues), there are different sets of opportunities and constraints in terms of promoting and facilitating water governance reform for the various aspectsmentioned. However, the trend appears to be that the EU-WFD’s approach is increasingly accepted as a general driving force for reforms, and thus builds a basis for opportunities and interventions by donors including UNDP throughout the region.

I B.Current Issues & Challenges

Specific challenges for the countries and sub-regions in Europe and CIS include:

  • Water-Energy Nexus: In Central Asia, the discussion around water resources is dominated by hydropower-irrigation trade-offs, based on increasing energy needs during winter months in upstream countries, vis-à-vis the need for irrigation water in summer and impact of flooding during winter months in downstream states (the so called “water-energy nexus”).
  • Water-Security Nexus: Both in Central Asia and the Balkans, and particularly in the South Caucasus region, water governance issues are often determined by the prevailing political situation and directly linked and conflict and security aspects. This often has most direct implications on the population in a transboundary river and sea basin, and in particular on vulnerable groups or individuals. Furthermore, periodic heavy flooding as well as occasional droughts poses severe threads to human and economic security in a majority of Europe and CIS countries, with a trend towards an increasing pattern due to human/civilization activities (such as surface sealing, deforestation, canalization, etc.) and possibly effects of climate change.
  • Soviet Era Legacies: The new national borders have divided previous (natural and logistic) entities with regard to water governance (e.g. the water-energy exchange scheme in Central Asia) into new compartments. The disappearance of the central coordinatingpower in a given WaterBasinhas often resulted in a vacuum or responsibilities, and a lack of coordination and willingness to cooperate amongst the new neighboring riparian states. In addition, the Soviet Era has installed and left behind a strong sectoral dividewhen it comes to water resources management. Toped up with institutional insufficiencies this results in unsustainable and inadequate management of water and other natural resources.
    The Soviet Era has also left behind ecological, health and security hot spots, including high water pollution and thread levels,such as nuclear waste storage facilities in river basins. Moreover, the predicted recovery of the industrial sector, which temporarily slowed down after 1989, is likely to entail raising pollution outputs into various water bodies, if not being combined with adequate and sufficient measure for emission control from industrial sites.
  • Water Pricing / Lacking of Investment:Connected to the issues mentioned above, and to the fact that under the Soviet Era water has largely been distributed free of charge, an attitude of wasting water resources,combined with a lacking concept for, and resistance to, water and services pricing is prevailingthroughout large parts of the region. This results in unpaid water use charges and – through the consequent unreliable financial situation of the utilities – to high reluctance of investors to move into the water and sanitation infrastructure sector in CIS.
  • Pressure from Agriculture and Wastewater: The agricultural sector, together with outdated (or non-existent) wastewater sanitation facilities, is contributing to pollution and high nutrient levels in most of the water bodies, particularly in Eastern and South-Eastern Europe. Policy reforms and investments for adequate technical measures are urgently needed to address these challenges, and to ensure sustainable access to drinking water for the entire population in the region.
  • Compliance with International Water Legislation:New EU-member and aspiring countries have to adopt and adhere to the provisions under the EU Water Framework Directive (WFD)[2], and many of the other countries have chosen the take them as guiding principles in reforming own national policy and legislation. All countries in Europe and CIS have furthermore obliged themselves at the Johannesburg World Summit on Sustainable Development (WSSD) to adhere to the principles of IWRM (integrated Water Resources Management), and to establish national IWRM and Water Efficiency Plans by 2005; although, the majority has not yet engaged into this process yet. Furthermore, many countries have signed and partially ratified a series of conventions and international agreements[3].

For most of Central Asia and other parts of the region, effective water governance is often constrained by[4]:

  • Limited, inaccurate and/or in-transparent data and information basis;
  • General institutional insufficiencies and strong sectoral and cross-border divides when it comes to water governance and natural resources management, and lack of integration of water issues into other areas of governance and decision-making;
  • A deficiency in terms of awareness and capacity to address the complexity of issues under Integrated Water Resources Management (IWRM), paired with a weak understanding and application/enforcement of international agreements and water law;
  • A general lack of financial investment, partly due to an unattractive political and economic framework for foreign investors, to maintain and promote Water Supply & Sanitation activities and infrastructure, as well as to support necessary policy reform processes.

I C.UNDP’s Work, Experience and Partnership Activities in Water Governance

On the (sub-) regional level, UNDP has over more than a decade successfully played a role asa neutral broker amongst riparian states, enabling transboundary dialogue and the establishment of coordination and cooperation partnerships (Danube River, Black and Caspian Sea, Kura/Aras River System in the South Caucasus, Dnipro, etc.). Mainly through GEF-funded regional (transboundary) projects, UNDP has built a portfolio in the region with an estimated investment of over USD $75 million, with roughly equivalent this amount in additional co-funding from governments, the EU and other partners.

More recently UNDP has started fostering its partnership and cooperation in a number of regional initiatives, such as the EU Water Initiative (EUWI-EECCA), the OECD-led EAP Task Force under the “Environment for Europe” initiative (focusing i.a. on “Financing the Water Supply & Sanitation Sector”), the Germany-driven “Peterberg/Athens Declaration” process, and others.

Contacts with interested other UN-agencies (WHO, UNEP, UNECE), donors (DFID, SDC), IFI’s (EBRD, WB) and the private sector (SNS Bank, Coca Cola) have been intensified over the past months, and dialogues started regarding existing and future partnerships. Liaisons have also been established to on-going projects and partnerships (e.g. IW:LEARN) to explore further possibilities of collaboration and joining of resources.

Lat but not least, BRC has started to foster internal partnerships in the water sector, including with headquarter-based units (RBEC, BDP/EEG, LEF) and outposted/specialized offices (Stockholm Water Governance Facility), as to create synergies and tap additional resources. BRC has supported joint efforts – e.g. the revision of the CA strategic programme (first drafted mid 2004[5]) and started a number of new activities and initiatives in the area of knowledge management and Community of Practice development (e.g. the new web-based WaterWiki).

Through its national presence, UNDP has initiated Water Governance initiatives ranging from support to policy reform towards national integrated watershed &quality management strategies (Kazakhstan, Moldova), to water supply, monitoring and rural infrastructure projects (Crimea/Uzbekistan), to ecosystem and wetlands interventions (Hungary, Slovakia), to community-level user group development (Kazakhstan)orother types of initiatives(e.g. support to the Dushanbe Intl. Water Conference in the framework of the new Decade “Water for Life”, summer 2005).

Along with the respectful regional and national level project portfolio, UNDP has built a cohort of water governance specialists representing extensive knowledge and experience from interventions in the RBEC region. The establishedregional capacity and expertise covers a wide range of areas, including:

  • Legal, policy & institutional reform, particularly around IWRM;
  • Integrated land and river basin management, including TDA/SAP[6] development and implementation, as well as compliance with European WFD;
  • Water supply & sanitation (WSS);
  • Cleaner production, Best Available and Ecologically Sound Technology;
  • Agricultural reform including water, land, and nutrient management;
  • Pollution control & reduction;
  • Public participation and awareness raising;
  • Water-related data and information management;
  • National Integrated Water Resource management (IWRM) and Water Efficiency Plans (WEP);
  • Local level participatory water resources management (e.g. through water user groups);
  • Others.

Part II.Strategy

II A.Untapped Opportunities

In Europe and CIS, UNDP has almost 15 years of experience in fostering policy reforms in shared water bodies, including river basins, lakes, and enclosed seas. While other UN-agencies (UNECE, UNEP, UNESCO, etc.) have programmes and activities in key areas of water governance in the region too, UNDP currently has by far the largest portfolio in terms of funding. Despite its large financial volume, the World Bank’s portfolio concentrates principally on investments in municipal wastewater treatment (and water supply) systems, as does EBRD and other IFI’s; such activities may occur though in association with basin-wide water governance/management initiatives (like the Danube Nutrient Reduction Project).

The long history of interventions in the area of water governance reform in the region positionsUNDP as one of the world’s leading institutions for Transboundary Water Management and Water Governance. Asignificant pool of knowledge, experience and good practice examples forms a valuable resource – not only for UNDP – in areas such as Integrated Water Resources Management (IWRM), capacity development in the water sector, approaches to strengthen water governance reform and interventions, and others.Moreover, there is a potential for catalytic replication and upscaling of such knowledge and experience, and for tapping the large – though not systematically organized andaccessible –network of expertise in the region and established partnerships with key partners and donors.

Water Governance has also proven to serve as entry-point for other areas of development, including crisis prevention and mitigation, poverty alleviation and gender equality. Such “drivers for development” could include the commitments under international conventions, e.g. the Johannesburg Plan of Implementation[7], provisions under the EU accession process (the EU WFD), or sub-regional transboundary cooperation agreements (like in the Danube or the DniproRiver, or in the Caspian SeaBasin).

Through itsparallel national and regional presence and activities in the water sector, UNDP is in the favorable position not only to combine regional (transboundary) and national-level (IWRM) aspectsand to promote a comprehensive and integrated approach, but also to fosterfunctional relationships with key partners and donors on both levels.

Despite UNDP’s presence and impact through project interventions,efforts to better capitalize on the existing knowledge, experience and expertise has been humblein the past. There is also a need to better utilize the available network of water governance experts and expertise, and to systematically replicate successful projects and good practice examples. To date there has only been scattered attempts to‘codify’ the large store of accumulated experience into user-friendly knowledge products, despite UNDP’s declared priority to become a “knowledge-driven and learning organization”. Furthermore, UNDP has not communicated much of its work, efforts and success in the region,or utilized effectively its water governance expertise and accomplishments to attain visibility and leverage resources.Lastly, the large GEF-funded transboundary water governance portfolio needs to be effectively integrated with ‘core’ UNDP water governance and other programmes.

UNDP needs to strengthen its capacity, presence,impact, and image in promoting IWRM and Water Governance Reforms in Europe and CIS, as to make fulluse of its existing niche

II B.Expected Outcomesand Outputs

The expected outcome of this project is to strengthen UNDP’s regional capacity, presence, impact and image in promoting Integrated Water Resource Management (IWRM) and Water Governance Reforms in Europe & CIS, through:

  • Strengthened regional “Community of Practice” (CoP) in the area of Water Governance;
  • Strengthened Water Governance sub-practice within E&E Practice in BRC;
  • Strong and effective regional portfolio with a mix of GEF-supported and otherwise financed projects;
  • Fully integrated GEF- and non-GEFinterventions;
  • Full-fledged on-demand CO-support and advisory servicesin the area of Water Governance;
  • Enhanced replication and upscaling of good practicewithin CO and regional programmes;
  • Better links between water governance issues to broader development questions in the poverty reduction, governance, and crisis prevention areas
  • Enhanced knowledge management, including access to experience and expertise, valuable and utilized knowledge products,functional regional networks including UNDP and external practitioners and experts, etc.;
  • Strengthened and/orefficient and effective use of existing regional capacity;
  • Established new, and strengthened existing strategic partnerships;
  • Enhanced awareness about UNDP’s work, visibility and impact;
  • Leveraged additional resources for programme development and other activities.

The project will concentrate on four areas of interventions with the following outputs:

1)Project Oversight & Replication: Development and management of a regional project portfolio;

2)Knowledge Management: Codifying, disseminating and connecting regional experience and expertise;

3)Capacity and Community development: Targeted interventions to strengthen the regional Community of Practice (CoP);

4)Networking: Strategic partnership development and resource mobilization.

II C.Project Activities

Output 1Project Oversight & Replication
Development and management of a regional project portfolio

Activity 1.1: Monitoring, overseeing and backstopping the implementation of on-going and starting-up regional projects(selected GEF-IW projectsand regional TRAC supported components, in cooperation with the GEF-RTA, and non-GEF regional projects):

  • The DanubeRegional Project (GEF-FSP), including supervision and support of national-level implementation (Annex 2), and the support of an exit-strategy with adequate knowledge management interventions (see also Output 2)
  • Kura/Aras (GEF pfd-B and non-GEF regional components)
  • Tisza(GEF-MSPwith non-GEF demonstration component)
  • TWME-EECCA (GEF-MSP), “Transboundary Water Management Experience in Eastern Europe, Caucasus, and Central Asia”, a regional knowledge management project aiming at capturing good practices in GEF-IW projects for learning and replication.

Costs mainly include: missions

Input: Reg. TRAC US$ 5,000; Danube IA-fee US$ 8,000; GEF-RCU US$ 40,000
(expected parallel funding fromSWBMand others as new projects emerge)

Activity 1.2: Development of 1-3 new regional transboundary projects. Regional non-GEF funded pilot and demonstration initiatives may be constructed around existing GEF-IW projects, or as stand-alone transboundary interventions in support of, or aligned to, sub-regional and national priorities and interventions. Potential new river basins for GEF-IW supported or other Transboundary Water Management projects include: