Water is arguably the most valuable resource on the planet, yet its value is difficult to determine because it is a common natural good for which there is no alternative. Economic instruments have immense potential for improving water use and allocation. In Eastern Partner Countries, water utility revenues typically only cover about 60% of the real operational costs. As a result, utilities have low levels of service, while resources for new investments are even scarcer.
The EU4Environment Water and Data programme aims to assess the strengths and weaknesses of the current economic instruments and tariff systems in Armenia and provide policy-makers with a critical knowledge base for enhancing the enabling water-related investments. Strong political will to reform water-related policy instruments and subsidies can send a powerful signal to investors and international financial institutions, building confidence and appetite for action.
In Georgia, the focus areas for analysis identified are the following: opportunities for implementation of recommendations on the reform of water abstraction fees developed under the EU Water Initiative Plus project, linkages with ongoing work on a new tariff for irrigation water and work on changing tariff structures with a focus on affordability.