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Water
and Wastewater
IPA
Energy + Water Economics has a dedicated International Water Consulting
team that provides advice to:
• Water
utilities
• Government authorities
• NGOs
• Regulators
• New entrants
• Investors
• Banks
• and other organisations
All our advice
is informed by our extensive knowledge of international water / sanitation
reform, restructuring and regulation initiatives.
Capability
IPA provides specialist capability in a number of areas:
Sector Restructuring and Water Utility Commercialisation
IPA has advised extensively on water sector restructuring and institutional
reform. IPA also works with both private and state-owned utilities, helping
them adapt to commercial operation. The majority of these assignments
entail developing strategies to improve their revenue and/or cost position.
Many of these assignments also involve conducting full cost of service
and tariff design studies.
Economic Regulation and Water Quality Assurance
IPA has a wealth of experience in water regulation both in relation to
the principles of policy delivery and in its practical application. We
have assisted in the establishment of economic and technical regulation
authorities in CEE, Europe, Middle East, Africa and Asia. Our expertise
in this area covers a number of areas including:
Tariff
and Economic Regulation
We advise regulators and companies on price control and tariff methodologies.
This includes designing pricing mechanisms for markets where competition
is limited or absent and the calculation of cost reflective network
access tariffs and equitable retail tariffs. We also have experience
in social affordability.
Technical/Environmental Regulation
We draft and interpret codes and standards, including water quality
protocols, as well as safety rules and customer standards.
Licences
We have extensive experience in drafting or updating legislation and
licences of all types, together with guidelines and procedures for application,
modification and revocation.
Internal
Governance Procedures & Systems
We design and assist with the implementation of organisational structures
and procedures for regulatory authorities. We advise water companies
on the internal management of regulatory affairs.
Water Sector Policy and Legislation
We offer specialist skills in water policy development in areas such as
competition, PSP (see further details below), rural access and social
affordability. We also have the in-house capability to draft legislative
frameworks to implement these policies.
Private Sector Participation
IPA is a leading practitioner of private sector participation in the highly
specialised area of the transition economies, emerging markets and the
developing world. It has leading expertise in developing PSP and privatisation
strategies, and attracting private sector investment and management skills
in ways that support and complement Government policy. We advise Governments
on appropriate PSP strategies and also help implement those strategies
through competitive tenders.
Investment, Operation & Market Analysis
For private sector clients we advise on the purchase of existing water
/ sanitation plant and the market potential for building new capacity.
We assist in analysing future prices and markets, analysing and mitigating
risk, and formulating agreements for water / sanitation sales and any
necessary associated fuel purchases.
Market Analysis
We have a particular prowess in undertaking detailed market analysis,
both for public and private sector organisations. Analyses are closely
linked to our modelling capability in understanding and assessing the
financial and economic options for asset purchases, new entrants, policy
and regulatory developments. We provide a holistic approach to our analysis
which includes the technical, financial, economic, policy, regulatory
and legal assessment of the market ensuring our clients have the complete
picture.
Regulation and Compliance
IPA has extensive experience in the development of policy and regulatory
instruments to encourage investment in the international water sector.
We also advise water operators on their regulatory obligations and establishing
reliable compliance procedures.
Financial Assessments
IPA provides financial and economic advice on water / sanitation projects
to banks, investors, project developers, public bodies, landowners,
community groups and other interested parties. This includes:
Assessment
of “financability” of the project and sensitivities of
financial parameters (gearing, cover ratios, discount rates etc);
Commercial Due Diligence to banks, investors and other market participants
on the potential risks and rewards of water and sanitation sector
activities. We can provide a complete due diligence service from high
level strategy to detailed analysis of operational and business processes
including an assessment of the project returns over the life of the
project/investment;
Level of appropriate benefits from water / sanitation projects for
community groups and landowners.
Water Services Companies (WSCO’s)
We can advise on the specialised operational and funding structures
suitable for delivering water / sanitation projects such as for community
/ local development of water resources.
Disputes
We provide support to both project developers and public bodies on contractual
and legal disputes.
Training
A common feature across many IPA projects is training. As well as many
of our staff having training skills and experience we also run a number
of formal training courses to allow our clients to keep fully up to date
with developments in market and regulatory practices. IPA also provides
capacity-building through the use of workshops, seminars and international
study tours as part of our restructuring services.
Current
and Recent Experience in Water and Wastewater
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Sierra
Leone - Strategic Water Supply and Sanitation Framework, Sierra Leone
The objective of the project is to prepare an economically, technically,
socially and environmentally sound plan for the rehabilitation and expansion
of the water systems in Freetown, in order to provide a reliable, affordable
and sustainable water supply service and to improve sanitation services.
The Framework will define objectives and strategies and present a capital
investment plan.
Russia
- Municipal Investment Support Programme
The objective of the MISP was the improvement and modernisation of municipal
services including water supply and waste water disposal, waste management
and district heating. In particular the project aimed to address lack
of capacity in local institutions which was inhibiting investment using
funds available from both commercial and non-commercial sources. IPA worked
with Russian municipalities (primarily those seeking funding from EBRD)
to enable them to develop bankable documents for rehabilitation programmes,
and to enhance their ability to attract funding. The work included capacity
building, establishing Programme Management Units, installing management
and financial systems and training staff, as well as recommending tariff
reforms to improve their finances.
Al
Meyyah, Jordan - Support
to the implementation of the Water Services Management Programme
The Al Meyyah Programme is an ongoing project to restructure the water
sector in Jordan and introduce a modern regulatory framework. Our work
involves the design and establishment (including any legal documentation)
of the Water Sector Audit Unit, a monitoring body that will be the basis
of a new water regulator. The project also involves reviewing the corporate
plans of commercialised water utilities and advising on PSP.
Mozambique
- Water Audit
FIPAG is responsible for the fixed assets of five city water
supply utilities. In 1999, FIPAG signed two contracts with a Private Operator
(Aguas de Mocambique) for managing and operating the five systems. IPA
is carrying out an independent audit of the contracts. This includes performing
financial audits and an assessment of the financial standing and credit
worthiness of the utility; calculating the Incentive Compensation for
the applicable Financial Year and resolving any disputes; and undertaking
further audits of data, records, reports, plans and achievements when
so requested by FIPAG.
Kosovo
– Water and Waste Regulator
The overall objective for the project is to provide all citizens
enterprises and public institutions with a continuous and stable water
supply and solid waste collection services at affordable prices. The work
entails: strengthening and implementing organisational/ institutional
matters (including investment planning, tariffs and licensing) for the
Water and Waste Regulatory Office (WWRO); enhancing the technical knowledge
within WWRO concerning solid waste handling and disposal; and improving
the dissemination and implementation process between WWRO and utilities
and other relevant institutions.
Rwanda
– Competitiveness and Enterprise Development
Support was provided to the Rwanda Utilities Regulatory Agency to assess
water and electricity investment plans and associated studies conducted
by a private management contractor. IPA also advised on new tariff levels
and structures for water and electricity services to better reflect underlying
costs and designed a procedure for future investment plan/tariff reviews.
Yemen
– Water Sector Regulator
The Government of Yemen is radically reforming the WSS sector.
A keystone of this reform programme is the separation of policymaking
and regulatory powers for water and sanitation services from the operational
provision and management of those services. IPA carried out a new study
and workshop to justify and promote the establishment of a National Regulatory
Authority by defining in more precise terms the division of tasks and
responsibilities in the urban WSS sector at the national level.
Kyrgyzstan
– Water Resource Sharing
Analysis of the impact of the annual cross-border irrigation
agreements with Kazakhstan and Uzbekistan on tariffs i.e. the relationship
between water releases from the hydro generation sources under the sharing
agreement and generation exports, and to what extent the payments for
this affect the tariffs.
Montenegro – Water Resources Management
Provision of advice on international precedents and best practice
in the allocation of water resources and the associated resource rent
when used for hydro generation and for water storage that straddles an
international border.
India
- Madhya Pradesh Poverty Reduction Technical Assistance Programme
Irrigation water is a key economic driver in Madhya Pradesh, much of it
pumped with subsidised power. A range of measures were designed to promote
more efficient use of water including pricing signals, changes to collection
and billing, institutional reforms and a public awareness campaign.
Tasmania
- Wholesale Pricing Adviser for Tasmanian Electricity
Development of a pricing mechanism for stored water to ensure its optimal
release to satisfy both hydro generation requirements and environmental
needs.
Abu
Dhabi - Review of Economic Despatch for the Regulation and Supervision
Bureau in Abu Dhabi
IPA undertook a review TRANSCO's compliance with its obligation for the
economic despatch of power and provision of desalinated water. This involved
familiarisation with the workings of the sector, the responsibilities
of different parties, the obligations of TRANSCO, its licence, industry
codes, security standards, operational procedures and operational practices.
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