Deputy Minister Ivanova: We need to find a sustainable corporate governance model for W&S operators

We need to find sustainable mechanisms to invest in the infrastructure, maintenance and financial health of W&S operators at a socially affordable cost. In this regard, the Ministry of Regional Development and Public Works has confirmed an opportunity to the European Investment Bank for advisory support to Bulgarian W&S Holding EAD for a comprehensive review, analysis and proposals for it and its companies in the areas of effective governance, climate resilience, European taxonomy for sustainable finance, investment gaps, barriers and opportunities for financing, capacity building and private sector participation in partnerships. This was explained by the Deputy Minister of Regional Development and Public Works Delyana Ivanova at the forum “European Financing and Financial Instruments in the W&S Sector” organised by the Bulgarian Water Association in Sofia.

In the database of the Ministry of Regional Development and Public Works, requests have been submitted by municipal and regional administrations for 905 priority sites worth over BGN 1.4 billion. The W&S sector is one of the heaviest, extremely important for the life and health of people as well as for the development of settlements. It has a huge concentration of assets - over 90,000 km of W&S network, 5,430 reservoirs, 3,370 drinking water pumping stations, over 6,300 water sources, etc., built over a period of more than 100 years and currently requiring huge investments in maintenance and replacement to operate at a good quality.

Ivanova also noted that our country has committed itself by joining the EU to build drinking water and wastewater treatment plants, water pipelines and sewerage systems to comply with EU directives in the field of drinking water and wastewater. “To comply with these directives, the World Bank estimates that more than BGN 13 billion is needed. A further BGN 19 billion is the investment required by 2050 for planned replacement and renewal of existing infrastructure to ensure sustainability of W&S service delivery. This is a significant resource that could be increased due to price escalation, said deputy minister Ivanova. She stressed that this requires maximising the involvement of European Union funds to complete the W&S systems and facilities and ensure efficiency of investments through planning and implementation of integrated regional projects.

Currently, projects are being implemented in 15 administrative districts of the country with funding from the Operational Programme “Environment 2014-2020” and co-financing from the national budget and funds provided by W&S companies for 14 projects, which include replacement of systems and construction of wastewater treatment plants. For the period 2021-2027, the Ministry of Regional Development and Public Works is preparing 6 more regional pre-investment studies for the districts of Veliko Tarnovo, Gabrovo, Pleven, Sofia, Targovishte and Haskovo, and the priority sites identified with them will be constructed with funding from the Environment Programme 2021-2027. As EU funds are the main source of funding for the sector, it is unacceptable to miss opportunities. In this regard, Delyana Ivanova called for continued consolidation in the sector to ensure the best development and compliance with the directives on clean drinking water and wastewater. Another grant financing instrument for the sector is a project in the W&S Holding, in the implementation of which the construction of 13 wastewater treatment plants in linear infrastructure in agglomerations of 5,000-10,000 equivalent inhabitants is envisaged.

A second source of funding is the national budget, which, through a restructuring of the budget of the Ministry of Regional Development and Public Works, has provided funds to be directed to the reconstruction of existing municipal W&S systems and the completion of new ones, as well as to the repair of municipal roads under projects submitted by local administrations. Part of these funds were to be provided under the budget of the Ministry of Regional Development and Public Works following the update of the state budget. “About BGN 209 million was earmarked for improving water and sewerage networks, but obviously it will not reach the municipalities,” the deputy regional minister said.

A third source of funding is loan instruments or public-private partnerships to finance investments that lead to savings that allow the investment to be repaid without the price of water passing social tolerance.

In order to ensure the continuity of services in the context of demographic crisis and climate change and to provide settlements with sufficient quantity of quality drinking water, cooperation and support from all stakeholders is needed, the Deputy Regional Minister stressed. “We all need support, consensus, coherent actions and policies to be able to meet the targets and improve the situation of the sector,” said Deputy Minister Delyana Ivanova.