(AP3F056-CB017) Capacity Building Assistance: Water Supply and Sanitation PPP Roadmap and Projects Screening Methodology
Capacity Building
The beneficiaries are
• United Water Supply Company of Georgia LLC (UWSCG)
• Ministry of Regional Development and Infrastructure (MRDI)

Georgia’s water resources consist of 26,000 rivers, with total length of about 60,000 km, about 860 lakes and 43 water reservoirs. Usage of these water resources are governed under the Georgia Law on Water of 1997 and Resolution 17 of 2014 which outlines policies related to water quality and related environmental regulations. Implementation of these regulations cuts across several agencies, one of which is the Ministry of Regional Development and Infrastructure (MRDI) who is in charge of regional development and infrastructure, which includes securing access to water and sanitation services. The latter service is provided by nine (9) wastewater service providers (as of 2019) from both the public and private sectors.

One of the key service providers is the United Water Supply Company of Georgia LLC (UWSCG), a state-owned entity, which provides water and wastewater services for urban settlements throughout Georgia, including Kutaisi, the country’s 2nd largest city. In 2019, UWSCG served about 30% of the country’s population.

Since 2011, ADB has been working with Georgia to help improve its water supply and sanitation (WSS) sector. In 2020, ADB approved a sector development program (SDP) comprising (i) a policy-based loan (PBL) to support ongoing governance and institutional reforms in the sector and (ii) an investment loan to improve UWSCG’s operational efficiency.  

This AP3F assistance was requested by MRDI to support the PBL’s policy actions related to a phased sector engagement with the private sector. Specifically, it is to support UWSCG to design and prepare successful strategies and methods for the involvement of private sector partners in the delivery of its water and sanitation services through public-private partnership (PPP) modalities. This will encompass the strengthening of UWSCG’s capacity to plan for, assess and screen projects for deployment through PPP modalities and more specifically the preparation of a PPP road-map and project pipeline for the water sector.  

Key Activities
  1. Staff training on (i) PPP structure applicable to WSS sector; and (ii) planning, assessment and screening of PPP projects.
  2. Review and use data and analysis prepared by existing consultants under prior assignments of legal and institutional framework for a private sector involvement in the WSS sector and review of the PPP law.
  3. Review of the PPP process in Georgia;
  4. Overall review of maintenance standards applied by UWSCG and assessment of short-term and long-term maintenance needs;
  5. Analysis of the potential options for private sector participation (PSP) / PPP and recommendations on optimal private sector participation modalities for UWSCG in coordination with the PBL outcomes of its wider sector and regulatory structural reform.
  6. Review and use the results of the market analysis conducted by prior consultants including demand assessment and identification of potential private sector players interested in collaboration with UWSCG under different PPP modalities.
  7. Financial analysis and modelling.
  8. Review risk analysis conducted by prior consultants, including potential risk allocation between public and private sector.
  9. Development of a short- to medium term strategy and roadmap for involvement of private sector in the development of WSS infrastructure projects (under PPP and other modalities) and improve UWSCG’s and WSS sector performance in Georgia.
  10. Preparation of PPP project identification, screening and selection criteria as well as the methodology or the process of selecting and screening projects in addition to staff training and development of a project screening manual
  11. Identification and screening of specific potential WSS infrastructure projects to be developed and UWSCG assets suitable for PPP/PSP with justification of their impact and of their ability to meet UWSCG’s and MRDI’s efficiency objectives; and, Development of a project screening manual for future projects.
Expected Outcomes
  • Strengthening of UWSCG’s capacity to plan, assess, and screen PPP projects
  • Improvement of WSS sector efficiency
  • Increased operational and financial performance of UWSCG