Following the dissolution of the Soviet Union, Armenia’s water supply and sanitation systems declined because of economic collapse, inadequate investment, poor operation and maintenance (O&M), and lack of management skills. Consumers faced serious problems with the shortage and poor quality of drinking water and lack of wastewater disposal facilities, which posed threats to human health and the environment.
To address the situation, the government implemented water sector policy and legislative reforms and sought Asian Development Bank (ADB) assistance to prepare and finance a project that would (i) undertake priority infrastructure rehabilitation and improvement, (ii) improve operational and financial management, and (iii) implement tariff reforms. In response, ADB approved a $36 million loan for the Water Supply and Sanitation Sector Project in September 2007. The project’s expected impact was improved public health and environment for about 576,000 people living in 16 towns and about 125 villages. Its intended outcome was improved access to safe, reliable, and sustainable water supply and sanitation services, managed on commercial principles and with environmentally sound practices. The project was to focus on optimizing the operation of existing infrastructure and maximizing the operational efficiency of service providers, followed by the construction of new infrastructure.
Drawing on initial success, ADB approved a $40 million loan in additional financing in April 2012. The additional financing was to expand the project benefits to an overall total of 700,000 people in 29 towns and up to 160 villages. It also aimed to further enhance the operational efficiency and financial management of the Armenia Water and Sewerage Company (AWSC), the state-owned regional utility servicing the project area.
Effective implementation resulted in the attainment of almost all output and outcome targets. By 2017, all water supply and sanitation systems in the project area had been rehabilitated, replaced in full or in part, and/ or extended, benefitting 894,785 residents or more than the 700,000-target. Water metering increased to 83% in 2015 from 65% in 2008. Losses from nonrevenue water in the entire AWSC service area dropped to 67.3 % in 2016 from 83% in 2016.
Human resource and institutional capacity development combined with infrastructure and equipment upgrades to raise billing and collection rates and improve AWSC corporate productivity. Average tariff collection efficiency rose to 91% in 2015 from 61% before the project. AWSC productivity, measured in terms of the number of employees per 1,000 consumers, improved from 5.64 in 2008 to 7.5 in 2015.
Along with improving access, the project also succeeded in providing its target beneficiaries with safe and more reliable water supply. Armenia’s water quality standards were met and by 2016, water was available 24/7 in 52% of the project area, and for an average of more than 16 hours per day in all the project towns and villages. Despite mounting financial pressure due to inadequacy of tariffs to meet the increasing expansion and O&M costs, AWSC service delivery continued to fare well. Customer satisfaction went up to 91% in 2016 from 42% in 2008.
The project was rated successful by ADB’s Central and West Asia Department. The State Committee for Water Economy was the executing agency, and the AWSC, the implementing agency.