Municipal Environmental Governance, UNDP

During 2023, together with both entity ministries responsible for water management as leads, and other relevant partners, the Project supported activities related to implementation of the entity Programs for improvement of water services (addopted in 2022), focusing primarily on drafting entity Laws on Water Services (as defined priority in entity Programmes). Following completion and adoption of the a comprehensive Regulatory Impact Assessment (RIA) the FBIH Law on Water Services was completed in December 2023 in FBIH. The process of creating a regulatory framework for water services in the RS started earlier and resulted in draft of the Law on Water Services completed and ready for public consultations and adoption by the Goverments. To facilitate the wider awareness of the Methodology on minimum water tariff setting (Methodology) supported by the Project and adopted in 2022, the Federal Association of water utilities initiated provision of trainings and support to all its members (and nonmembers) that are not participating in the MEG project. 35 Water Utility Companies (WUCs) in FBIH attended three rounds of trainings. They got knowledge about the Methodology, its base principles and developed evaluation tools, focused on practical training and finetuning of tools for implementing the Methodology. Equally, to promote the Methodology and to build the capacity within vast majority of the RS water utilities to use it, the Project organized training of trainers delegated by the Water Utility Association (WUA), introducing them in detail with the Methodology and the developed tools for tariff evaluations. Following this, the trained WUA trainers continued with regional workshops on the Methodology for more than 20 water utilities that are not MEG partners and included the District of Brko into these trainings too. With support from project entity WUAs continue with educations of WUCs ensuring ownership and capacity building. Water tariff setting methodology for determining the lowest basic price of water services, was adopted by 28 local governments (LGs), whilst 11 partner LGs adopted new water service tariffs. The Project provided continuous support to partner WUCs and designated LG employees in tariff methodology application in their localities. Assisted by the MEG Project, the World Bank initiated the support to the BiH water administration in establishing the countrywide benchmarking system for water services and agreed the preliminary selection of large set of input data to be collected by WUCs and LGs. The MEG Project Key Performance Indicators (KPIs) are aligned with this selection and should secure harmonization of each KPI during the final implementation of the countrywide benchmarking system for water services. The final ToR for Benchmarking software procurement was finalized in December 2024, and after reaching agreement with the BiH water sector administration, the Project will lead the procurement process. To enable functioning of benchmarking software once in place, the WB in parallel will support procurement of needed hardware through its financing mechanisms with entity ministries. At local level, the Project continued with delivery of inclusive and strategic technical assistance (TA), tailored to individual WUC needs. One of main aims was to support implementation of previously adopted contracts and decisions creating supporting the environment for planed enhancements of their organizational, operational and financial capacities. In that regard, the Project provided capacity building assistance to all partner WUCs across formerly defined 17 key thematic improvement areas with especial focus on the following topics: Handson exercise and TA on optimal organization structure and staff optimization, budgeting and business planning, Consumer relationship procedures, Assessment of nonrevenue water (NRW), Water tariff policy, Inventory and fixed assets cycle, Energy efficiency. As result, a number of municipalities managed to reduce % of NRW, to optimize organization and staff structure, to improve budgeting and to introduce new tariffs. All this is contributing to a better sustainability. Synergy has been established with GED project, also financed by Sweden, introducing energy efficiency and renewables in WUCs (mainly on pump stations) and thus reducing energy costs significantly, which directly contribute to sustainability of WUCs operations. Sinergy with PIPLS project on asset management is also highlighted, since both projects work on asset management of WUCs from different angels. Local Governance component delivered many good results as establishment of ecitizen platform, Common Assessment framework with participation LGs, Performance based Grant methodology and grant awards to best performing LGs, etc (Sweden does not participate in financing this part of MEG project but is actively involved as well as other donors)

The Project’s overall goal is to contribute to the democratisation of local governance in Bosnia and Herzegovina and more equitable, effective, and efficient public services for the citizens, particularly water supply and wastewater management services. Policy dialogue and policy changes, together with regulatory improvements in the area of water supply and wastewater management services, will provide for more effective, fair and sustainable delivery of essential local services. The intervention envisages three outcomes: Outcome 1: State, entity and cantonal governments set in place a more conducive policy and regulatory environment that affirms result-oriented local governance and improved water supply and wastewater management services. Outcome 2: Local governments improve their performance, are more accountable, inclusive and gender-responsive, and provide high quality services, in particular in the water sector. Outcome 3: Citizens, including the most vulnerable, benefit from water supply and wastewater management services provided in a more efficient, accountable, and sustainable manner. Sweden will provide direct support to activities under two Project outputs: 1) State, entity and cantonal governments set in place a more conducive policy and regulatory environment that affirms result-oriented local governance and improved water supply and wastewater management services (Outcome 1) and 2) Citizens, including the most vulnerable, benefit from improved water supply and wastewater management services provided in a more efficient, accountable, and sustainable manner (Outcome 3). The Project is an integral part of a wider set of reform and investment interventions in Bosnia and Herzegovina guided by the Joint vision for advancing the water supply and wastewater management services reform in Bosnia and Herzegovina 2021-2028, supported by the international and donor community in the country.