Water & Energy

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USAID has helped Armenia to achieve measurable progress in the energy and water sectors.  Physical infrastructure upgrades have been accompanied by a first stage of institutional and regulatory reform – especially in the energy sector – that have increased transparency, accountability and self-reliance. Today, USAID/Armenia’s programs are focused on completing the next stage of reforms, institutional development of the governing and regulatory bodies, and on ensuring the delivery of safe, reliable, affordable and accessible public services.

ENERGY

Overall, USAID’s program is helping Armenia to develop an efficient, reliable and cost-effective energy sector to support its emerging market economy.  The three most vexing threats to Armenia’s energy security are increases in the price of natural gas imports, the need to close down Armenia’s aging and dangerous nuclear power plant, and increasing dependence on Russia for energy supplies.  To help Armenia achieve energy security, USAID’s supports efforts to i) securing diversified sources, including nuclear and renewable, and ii) securing investment to ensure efficient and economically sustainable usage in national and regional contexts.

Major accomplishments to date include:

• The electric and gas sectors were reorganized, an energy regulatory commission was created, and international accounting standards were introduced.  Macro- level reforms have been substantially completed and the energy sector has been put onto a sustainable path.
• A long-term national strategy for development of Armenian power sector was developed and endorsed, and new standards for the power industry enforced.
• An extensive series of environmental and technical feasibility studies were completed that facilitated competitive procurement of an Owner’s Consultant to develop tender documents and a financing strategy for a new nuclear power plant.
• During 2004-2007, 26 non-heat energy efficiency and renewable energy pilot projects were designed and completed for a total cost of $400,000.
• Reliable heating systems were installed in 38 Armenian schools, improving the working conditions of over 20,000 students and teachers and enabling those schools to remain open during the winter.

WATER

USAID’s water sector reform activities support the development of an efficient and sustainable integrated water resources management system.  Despite recent improvements in performance of water companies and regulatory institutions, much remains to be done, particularly improvement s to water networks in the rural areas.  USAID’s program focuses on setting water and sanitation utilities on the path to financial self-sustainability, further improving legal and regulatory environment and promoting transparent and knowledge-based governance of the sector.

Major accomplishments to date include:

• The "Water Code of the Republic of Armenia" was adopted in 2002 that provided direction for ongoing reform efforts including the separation of management and protection (Water Resource Management Agency) from regulation (Public Services Regulatory Commission) and maintenance (State Committee on Water Economy).
• Under the Water Resource Management Agency five Basin Management Organizations (BMOs) were established that conduct river basin planning and provide monitoring, compliance assurance and enforcement of regulations.
• The Environmental Monitoring Center was established for monitoring environmental quality of air, water, and land resources.
• Water quantity (surface and underground) was reestablished by rehabilitating 72 water monitoring posts.
• Public participation in water management and protection issues was increased. 
• A model waste water treatment system for industrial pollution from the tanning industry was constructed.

CURRENT ACTIVITIES

Artashat water supply rehabilitation project: construction of a water reservoir in progress.

Commercialization of Energy Efficiency Project (06/2007-05/2009, $2.4m): This program is working with private sector energy service companies and the banking sector to increase the availability of bank financing for energy efficiency projects to encourage the development of viable energy efficiency market. [Implemented by Advanced Engineering Associates International]

Rehabilitation of water supply system of Artashat town and 27 surrounding villages (05/2007-08/2009, $3.2m): This project is rehabilitating the water supply network for the town of Artashat and 27 surrounding villages providing 100,000 people with continuous supply of safe drinking water and helping the Armenian Water Company move towards commercial viability. The project compliments a World Bank-funded project providing management services from an experienced French water company, SAUR. [Implemented by Fund for Armenian Relief and several local construction firms]

Water Sanitation Financing Options (09/2008-09/2009, $399K): The activity is investigating long-term financing options for the development of Armenia’s water and sewerage sector. The analysis will also help determine sources of funding and identify the legal/regulatory actions and preliminary institutional design required to establish a sustainable water sector financing mechanism or facility. [Implemented by PA Government Services]

FUTURE DIRECTIONS

Energy: To achieve a long-term goal to help Armenia to strengthen the foundation for its energy independence and security USAID will provide long-term advisory services to the Government in ensuring that the new Nuclear Unit meets western safety and environmental standards. Proposed technical assistance will also help to improve enabling environment for development of renewable energy in Armenia and support Armenia’s integration to regional energy systems and markets.

Water:  A new program will complement previous work done in the sector and assist the county in completion of reforms, focusing on water and sanitation sector financial options, improvement of regulatory environment and water quality assurance procedures, as well as carry out focused relative risk analysis to identify wastewater investment priorities needed to minimize risk of food crop contamination from irrigation water.