Title page
Contents
Abstract 4
Résumé 5
Acknowledgements 6
Executive Summary 7
1. The enabling environment for investment in water security in Armenia 11
1.1. The assessment of the enabling environment for investment in water security 11
1.2. D1: An adequate policy framework for investment 12
1.3. D2: An attractive water policy framework for private drinking water services, still limited for sanitation and irrigation 15
1.3.1. A robust water resources management framework with limited economic instruments, putting at risk water related investments 17
1.3.2. An attractive policy framework for private operators, having service sustainability challenges 19
1.3.3. Weak enabling conditions lacking incentives to attract investment to sanitation 23
1.3.4. A weak enabling environment mainly focusing on public investment for irrigation 25
1.4. D3: A scarce project pipeline, with sustainable projects with limited financial viability 28
1.5. D4: Economic sectors have limited contribution to water security in Armenia 29
2. Recommendations to overcome selected barriers and strengthen the enabling environment for investment 32
2.1. Develop a comprehensive national water strategy that guides government, donor, and private investments in water security 32
2.2. Develop and adopt detailed investment plans for drinking water, sanitation, and irrigation sectors 35
2.3. Formalising service access and regulating service delivery to the 20% of the population lacking formal services 37
2.3.1. Roadmap for identifying the best solution(s) for unserved areas 39
2.3.2. Potential options based on the experiences of OECD Member Countries 40
References 46
Annex A. Armenia's scoring for dimension 1 48
Annex B. Armenia's scoring for dimension 2, 3 and 4 54
Methodology 54
Data collection 54
Data sources 54
Data analysis and scoring 55
Table 1.1. Armenia country statistics 13
Table 2.1. Sharing functions among water and sanitation utilities, from the least to the most complex one 44
Figure 1.1. An attractive enabling environment for private investment, still facing major challenges to ensure water security 12
Figure 1.2. An investment policy framework similar to neighbouring countries 13
Figure 1.3. Armenia excels in Regulatory Permits and Approvals and is on par with eastern partner countries for other indicators 14
Figure 1.4. Armenia achieves a higher ratio of private investment to ODA in water and sanitation sector (2015-2021) 16
Figure 1.5. A strong water policy framework for drinking water and hydropower 17
Figure 1.6. A robust water resources management with limited efficacy of economic instruments 18
Figure 1.7. An attractive policy framework for private operators, with challenges for service sustainability 20
Figure 1.8. Non-revenue water is extremely high 21
Figure 1.9. Operating cost coverage on par with the other countries 22
Figure 1.10. Debt Service Ratio far from reaching recommended levels 22
Figure 1.11. Weak enabling conditions to attract investment in sanitation 24
Figure 1.12. Bulk water investment framework faces barriers despite improvements 25
Figure 1.13. A framework ensuring sustainable projects with limited financial viability 28
Figure 1.14. Economic sectors have a limited contribution to water security 30
Figure 2.1. Good access to safely managed drinking water services but significant challenges related to safely managed sanitation services in Armenia 38
Annex Figures
Figure A B.1. Scoring's banding system: covering the developmental stages of an economy 55