49384-002: Second Water Supply and Sanitation Sector Project | Asian Development Bank

Armenia: Second Water Supply and Sanitation Sector Project

Sovereign (Public) Project | 49384-002 Status: Proposed

The proposed project will focus on Yerevan city, Ararat, Armavir, and the mountainous Aragatsotn region. These regions have a combined population of 1.8 million (50% of the country's population) and cover an area of more than 5,400 square kilometers. The main reasons for focusing on this geographical area, especially Yerevan and the Ararat, are their economic importance, vulnerability to over abstraction of ground water, drought, climate change, and absence of intersectoral river basin management plans.

Project Details

Project Officer
Llorens, Cesar Central and West Asia Department Request for information
Country
  • Armenia
Sector
  • Water and other urban infrastructure and services
 
Project Name Second Water Supply and Sanitation Sector Project
Project Number 49384-002
Country Armenia
Project Status Proposed
Project Type / Modality of Assistance Loan
Source of Funding / Amount
Loan: Second Water Supply and Sanitation Sector Project
Ordinary capital resources US$ 55.00 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Gender Equity and Mainstreaming
Governance and capacity development
Knowledge solutions
Private sector development
Sector / Subsector

Agriculture, natural resources and rural development / Water-based natural resources management

Water and other urban infrastructure and services / Urban policy, institutional and capacity development - Urban sanitation - Urban water supply

Gender Equity and Mainstreaming Effective gender mainstreaming
Description The proposed project will focus on Yerevan city, Ararat, Armavir, and the mountainous Aragatsotn region. These regions have a combined population of 1.8 million (50% of the country's population) and cover an area of more than 5,400 square kilometers. The main reasons for focusing on this geographical area, especially Yerevan and the Ararat, are their economic importance, vulnerability to over abstraction of ground water, drought, climate change, and absence of intersectoral river basin management plans.
Project Rationale and Linkage to Country/Regional Strategy

After the collapse of the Soviet Union in 1992, service coverage in water supply and sanitation plummeted in Armenia. By 2002, intermittent water services were as low as 2 hours a day in some areas, 55% of collected wastewater was discharged without any treatment, non-revenue water was as high as 90% in some areas, and the revenue collection rate was around 15%. By 2007, when ADB prepared its first loan for the sector, over 60% of the WSS infrastructure in 50 towns and 300 villages was in very poor condition, and about 50% of the water and sewage networks needed major rehabilitation and/or replacement. This situation was further exacerbated by overdesigned infrastructure, the dwindling economic base in most secondary cities, rising environmental and climate change vulnerabilities, and the global economic crisis.

A management contract was introduced in the capital city, Yerevan, in 1998. This was followed by four additional management contracts that resulted in improvements in service performance, including collection efficiency, quality of water, and efficiency in service delivery. These contracts have enabled the transition to a unified lease contract for the country, expected to be effective in Q1 2017. In parallel, ADB has also supported this transition through a policy-based loan, enabling reforms on broader sector governance issues including the revision of the Water Code, and building capacity of the Public Services Regulatory Commission and the State Committee for Water Economy.

Although many improvements were made over the past 2 decades, five key issues remain in the sector:

(i) High NRW. In earlier projects, when access to water improved, leakages and therefore NRW increased as more water was pumped through the system and pressure increased. A study to understand the causes of high NRW and identify remedial measures was commissioned by ADB in 2013, which among others, concluded that a 50% reduction in NRW could be achieved by changing regulations related to meters and ownership of infrastructure assets located inside condominiums.

(ii) Pollution of water bodies. Sanitation was not addressed in the earlier projects due to the absence of solid waste infrastructure countrywide that would have allowed for the treatment and disposal of sludge generated in the wastewater treatment plants.

(iii) Sustainability of ground water sources. In Ararat and Armavir, ground water abstraction for fish farms and agriculture has been intensive. In the proposed project, this will be partially addressed through the introduction of remote sensing technologies and water reuse.

(iv) Energy efficiency. There are potentials for energy consumption reduction, even to obtain zero energy balance within some subprojects.

(v) Cost recovery and financing. Due to the different private sector arrangements, the government was unable to implement countrywide tariff reforms. The World Bank provided policy support on tariff design for the proposed lease contract.

The proposed Second Water Supply and Sanitation Sector Project (WSSSP2) is in line with ADB's Water Operational Plan. WSS is a key sector in the country partnership strategy, 2014-2018 for Armenia. The proposed project aims to support the government by: (i) increasing capital investments in WSS including wastewater treatment; (ii) reducing water pollution, reusing treated wastewater, managing ground water resources, and assisting associated regulatory reforms; (iii) improving the capacity of the SCWE and State Committee of the Real Property Cadaster in using remote sensing technology, geographic information system (GIS), and supervisory control and data acquisition (SCADA) system to monitor ground round ground water and provide data for river basin management; (iv) piloting new WSS system approaches in geographical areas vulnerable to drought; (v) reducing cost of services through energy efficiency improvement and regulatory reforms for NRW; and (vi) building capacity.

Impact Environmental conditions and health of residents in four main regions improved.
Outcome Access to high quality and financially sustainable water supply and sanitation services increased
Outputs

Management of commercial contracts improved

Water supply infrastructure constructed and rehabilitated

Sanitation infrastructure constructed and rehabilitated

Environmental impacts and climate change resilience improved

Geographical Location
Safeguard Categories
Environment B
Involuntary Resettlement B
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation
Responsible ADB Officer Llorens, Cesar
Responsible ADB Department Central and West Asia Department
Responsible ADB Division Urban Development and Water Division, CWRD
Executing Agencies
Ministry of Energy and Natural Resources of the Republic of Armenia
Government Building 2, Republic Square
375010 Yerevan, Republic of Armenia
Timetable
Concept Clearance 02 Dec 2016
Fact Finding 08 May 2017 to 19 May 2017
MRM 11 Jul 2017
Approval -
Last Review Mission -
Last PDS Update 07 Dec 2016

Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

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Safeguard Documents See also: Safeguards

Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.

None currently available.

Evaluation Documents See also: Independent Evaluation

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Related Publications

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Tenders

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Contracts Awarded

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Procurement Plan

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