Introduction
The Know-how Exchange Programme (KEP) initiated by WAREG has been instrumental in fostering enhancements in the regulatory frameworks for water services in the Western Balkans. Throughout its tenure, four significant meetings were conducted, each serving a unique purpose in the project’s overarching goals.
Background
The KEP Project, endorsed by the CEI Committee on Know-how Exchange Programme on September 20, 2022, represents a collaborative initiative to enhance the effectiveness and affordability of tariff-setting methodologies for water services in the Western Balkans. Co-financed by WAREG and supported by the Central European Initiative (CEI), this project draws upon the collective expertise of member states to foster European integration and sustainable development through regional cooperation. The initiative reflects the concerted effort of WAREG to disseminate knowledge and improve regulatory practices within the EU and neighbouring countries. The project saw as beneficiary countries Albania, Montenegro, and North Macedonia.
Goals and Objectives
The primary aim of the KEP Project is to empower senior officials from national water regulators with advanced tariff-setting skills, thereby enhancing the regulatory frameworks within their respective nations. By addressing the needs articulated in a 2022 memorandum of understanding, the project facilitates a comprehensive series of workshops and study visits, fostering a deeper understanding of drinking water and wastewater treatment processes. This initiative underscores the importance of tariffs as economic tools for recovering the costs of public utility services, ensuring that access to safe, affordable, and environmentally sustainable water remains a universal right. Furthermore, the project aligns with the broader objectives of integrating EU water legislation, particularly focusing on the recovery of efficient costs and promoting data transparency in regulatory practices.
Kick-off Meeting
The journey began with the kick-off meeting held at the WAREG office in Brussels on May 4, 2023. This initial gathering was pivotal, as it established the groundwork for the project, bringing together key stakeholders and introducing the main objectives and methodologies. Discussions centred around the principles and requirements of EU directives in the water sector, with insights from experts such as Trudy Higgins from DG Environment EU Commission. The meeting also addressed the current challenges within the water sector, identifying areas for potential reforms, especially in tariff-setting methodologies, with contributions from regulatory authorities from Albania, North Macedonia, and Montenegro.
First Workshop: Tariff Regulatory Framework
The first workshop, focusing on the Tariff Regulatory Framework, took place in Budva, Montenegro, on September 20, 2023. This session was dedicated to discussing the main methodologies for tariff setting in Europe, delving into cost components, tariff calculation, and the incorporation of incentives and penalties. Led by WAREG Vice-President Kastchiev from EWRC Bulgaria, the workshop also featured a case study on Montenegro, providing a practical perspective on the challenges and solutions within the regulatory framework. The meeting facilitated an in-depth discussion on regulatory accounting criteria and the social aspects of tariff setting, highlighting the importance of transparency and fairness in the process.
Second Workshop: KPI Objectives Related to Tariff Setting
Held in Skopje, North Macedonia, on October 16, 2023, the second workshop revolved around KPI Objectives related to Tariff Setting & Affordability. This meeting aimed to build upon the foundational knowledge provided in the first workshop by focusing on the application of KPIs and targets in tariffs. Topics such as non-revenue water, water meters coverage, and operation & maintenance costs were discussed. The workshop also examined the performance evaluation of KPIs and the impact of financial incentives on the tariff review process during the regulatory period, providing a rounded view of the intricacies involved in tariff setting.
Final Meeting
The final meeting of the KEP Project was key to reflect on the achievements and challenges faced throughout the project’s duration. It focused on the knowledge shared during the workshops and study visits, evaluating the progress made by the participating countries, and discussing the next steps for implementing the EU acquis on water. The final meeting would served as an opportunity to acknowledge the contributions of all stakeholders and outline future collaboration opportunities.
Reflections from the Beneficiary Countries
As we reflect on the journey and achievements of the KEP Project, we sought insights directly from the representatives of the beneficiary countries: Albania, Montenegro, and North Macedonia. Their experiences and reflections underscore the project’s significance and utility from their unique perspectives.
Albania’s Perspective:
The representative from Albania highlighted the KEP Project as a transformative experience, offering crucial insights into tariff-setting methodologies aligned with EU standards. “The KEP Project has been instrumental in refining our regulatory approaches, ensuring that we are not only compliant with EU directives but also moving towards more sustainable and equitable water management practices. The workshops and study visits have been invaluable in exposing us to best practices and innovative solutions in the water sector.”
Montenegro’s Reflections:
Montenegro’s delegate emphasized the importance of knowledge exchange and regional cooperation facilitated by the KEP Project. “For us, the project was a unique platform for learning and collaboration. It provided us with the tools and understanding needed to tackle our country’s specific challenges in water regulation, enhancing our capacity to set fair and effective tariffs that reflect the true costs and needs of our water services.”
North Macedonia’s Insights:
The North Macedonian official appreciated the practical aspects and the hands-on approach of the KEP Project. “What stood out for us was the project’s focus on practical regulatory solutions and hints. The KPI Objectives workshop, in particular, has enabled us to take a step further in aligning with European benchmarks and enhance our regulatory framework’s efficiency and transparency.”
Why the KEP Was Useful:
The consensus among the three countries is clear: the KEP Project has served as a crucial stepping stone towards enhanced regulatory practices in the water sector. By fostering an environment of shared learning and collaboration, the project has not only addressed the immediate challenges but also laid the groundwork for continued progress and adaptation to the evolving demands of water management and regulation.
In summary, the reflections from the beneficiary countries reaffirm the KEP Project’s role as a catalyst for change, driving improvements in water sector regulation and supporting the journey towards European integration and sustainable development.
Conclusion
Each meeting under the KEP Project was designed to progressively build upon the last, ensuring a comprehensive understanding and approach to enhancing water sector regulation in the Western Balkans. From laying the groundwork to addressing specific challenges and evaluating progress, these meetings have been crucial in advancing the project’s goals and fostering regional cooperation. As the KEP Project concludes, its legacy underlines the importance of collaborative learning and best practice exchange. The structured approach, from foundational discussions to specific regulatory challenges, ensures that the regulatory frameworks in the Western Balkans are equipped for future advancements, aligning with EU standards and fostering sustainable development in the water sector.