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Strategy and policy
Reform Support

Implementation of the Action Plan towards sustainable water services

Supporting reforms to transition to a green economy and fight climate change

Funding Programme
Year
  • 2023

Implementation of the Action Plan towards sustainable water services

Despite improvements in Estonian water services, challenges persist in the fragmentation of water companies, which has led to significant regional inequalities regarding affordability, quality, and access to water services. 

The EU-funded project aimed to help the Ministry of Climate and Competition Authority to implement the activities proposed in the Action Plan of the report ‘Towards Sustainable Water Services in Estonia’.

Context

Estonia has always relied on State aid or EU funds to build its water supply and water treatment infrastructures and to be compliant with the relevant EU directives on water supply and treatment. As a result, water tariffs are insufficient to cover the costs and to ensure maintenance of the existing water supply and treatment plants. An appropriate increase in water tariffs would make water not affordable for a large part of the population. A former SRSP 2020 project implemented by OECD looked at this issue and provided an action plan with recommendations to increase the efficiency of water suppliers and limit the increase in water tariffs while maintaining compliance with the current EU directives. Most of the recommendations are difficult to implement and Estonia asked further support to implement part of the action plan in the short term and develop a long-term strategy. The project is aligned with the EU Water Resilience strategy.

Support delivered

The project delivered the following support measures:

  1. Draft a long-term strategy based on the recommendations from the Action Plan, in particular by performing a number of analyses and assessment of the Estonian situation, for instance on the financial capacity of water suppliers and on different scenarios for water tariff increases.
  2. Support the implementation of the short-term recommendations from the existing Action Plan. For instance, by providing recommendations on how to build financial incentives for water suppliers, how to review water tariff levels or how to benchmark performances of water suppliers.
  3. Advising local governments and water companies on consolidation and effectiveness of water entrepreneurship. For instance, by creating legally sound templates and organising forums to enhance cooperation across local authorities.
  4. Develop a communication strategy to be implemented throughout the project to ensure participation of stakeholders.

Results achieved

During the project duration, some water suppliers already merged (the total number of water suppliers decreased from 135 to 130). The Ministry adopted a Strategic Roadmap for the Water Service Reform until 2035 taking into account all the input provided by the project on the long-term strategy. The Ministry and the Competition Authority are working towards proposing a revision of laws in the next 18 months to implement the recommendations of the project. 

Video

More about the project

You can read the documents related to the project here: