Ukraine is preparing a modern system of water sector financing based on European principles
Ukraine continues to implement European approaches to water resource management. One of the key directions of this work is the creation of a modern system for cost recovery of water services — a mechanism that has been successfully operating in European Union countries for many years and ensures stable financing of measures to achieve environmental goals, protect, and restore water resources.
This was the focus of a training seminar organized with the support of international partners of the EU4Green Recovery East Program. Participants discussed how European countries finance the water sector, which economic instruments they use to protect water resources, and how this experience can be adapted in Ukraine.
Special attention during the seminar was given to the French experience, considered successful in Europe. Back in the 1960s, France faced significant water pollution and the need for considerable investments. The response was a comprehensive reform that created a stable system of water sector financing without full dependence on the state budget.
Participants learned about the “polluter pays” principle, the creation of six basin water agencies that finance environmental measures through payments from water users, and the principle “water pays for water,” where funds generated in the water sector are directed toward its development, modernization of water infrastructure, and protection of water resources. An important component of the French model is annual public reporting on the cost and quality of water supply and wastewater services, which ensures transparency and consumer trust.
Ukraine has already embarked on this work. The Ministry of Economy, Environment and Agriculture has prepared a draft Strategy for water services cost recovery. It is aimed to create a financially sustainable system of water resource management that meets the requirements of the EU Water Framework Directive and supports the fulfillment of Ukraine’s European integration commitments, including measures of the National Program for the Adaptation of Ukrainian Legislation to EU law and negotiation benchmark 27.5 under Chapter 27 “Environment and Climate Change.”
“European experience proves that effective water resource management is impossible without a stable financing system. For Ukraine, it is important not only to comply with EU legislation but also to implement mechanisms that have been successfully working in European countries for many years. This will ensure long-term financing of water infrastructure, improve the quality of water services, and protect our water resources with better efficiency,” commented Iryna Ovcharenko, Deputy Minister of Economy, Environment, and Agriculture of Ukraine.
Background
The training seminar was held within the EU4Green Recovery East Program, funded by the European Union. The project supports Ukraine in implementing EU water legislation requirements, developing the basin-based principle of water resource management, improving economic mechanisms in the water sector, and strengthening institutional capacity to fulfill European integration commitments.