Project background
Over the past decade, North Macedonia has undertaken several initiatives aimed at enhancing the water services sector, such as establishment of price regulation and a concept and roadmap for the reorganization of water services (2017). The price regulation was implemented, but the reorganization (clustering) of services was not followed up. The further sector reform on which the government is now embarking has three closely interlinked areas, namely:
Revising and operationalising the national strategy for reorganising water and wastewater services in clustered areas, starting with clustering studies in 3 pilot areas and the development of a legal toolkit for clustering.
Pursuing the “polluter-pays” and “full cost recovery” principles, starting with the improvement of the tariff setting mechanism and the national performance benchmarking system.
Improving the capacities of those PUCs that agree to enter in some form of inter-municipal water services and developing specific legal arrangements and instruments for enabling the cooperation.
Our Objectives
Overall Objective: To improve access to and quality of water and wastewater services in line with the EU Acquis.
Objective 1
Municipal water service provision reorganised in clusters
Objective 2
Polluter-pays and full-cost-recovery principles progressively enforced nation-wide
Inter-municipal services in pilot areas established and operationalised
Objective 3
Output 1
Output 2
Output 3
Output 4
Output 5
Strategy for reorganization of municipal drinking water and wastewater services operationalised
Overseeing functions at national level for inter-municipal cooperation in water service provision strengthened
Water tariff mechanism upgraded
nation-wide
Inter-municipal water service provision in pilot areas established
Financial and operational performance of water service provision in pilot areas improved
Our Activities
Municipal water services provision reorganised
in clusters - The project develops the national strategy for clustering of water services and prepares detailed clustering studies in three pilot areas
What this means for you: Currently water services are managed by many small, separate local utilities. The small utilities have a lack of professional staff and are underfunded. This makes it expensive and difficult to fix problems like infrastructure breakdowns or replacing old equipment. You may experience supply interruptions, poor water quality, polluted surface water, slow repairs.
The Plan: We are preparing plans for municipalities to work together in "clusters" to form water associations or joint utilities. Bigger entities can share resources and expertise, obtain easier access to investment capital, provide more reliable service and manage the facilities more professionally. This process also requires the strengthening of the sector coordination system at national level, as well as the relevant legislation. Sector reform is a long-term process, covering up to 15 years, depending not only on national priorities, but also on how eager your municipality is to make the transition.
The Goal: To make the transition from a fragmented to a more sustainable and future-proof water sector with a limited number of bigger utilities and a consolidated governance system.
Water tariff mechanism upgraded nation-wide - The project supports the Energy and Water Services Regulatory Commission (ERC) with upgrading the national water tariff setting methodology and establishing a National Performance Benchmarking System
What this means for you: Water prices are generally not covering the costs of operations and maintenance; they are too low. Many utilities are indebted, cannot replace old infrastructure or pay suppliers. As a consequence you may experience a deterioration of the service level. It is important that the price you pay for water is fair, transparent and used directly to maintain the system. It is expected that water prices will gradually increase, but that service levels will improve.
The Plan: We are working with the ERC to improve the system of how water prices are calculated and set, and to create a system that compares the performance of water utilities on the basis of key indicators.
The Goal: To ensure that utilities have the funds they need for repairs while keeping services affordable and efficient for every household.
Inter-municipal services in pilot areas established and operationalised
The project supports the municipalities and utilities in three pilot areas with the preparation, establishment and operationalisation of joint water services. This can be for example through an inter-municipal water association, a joint public enterprise or another form of cooperation. It will depend on the benefits and added value, local capacities, political will, and the external support available, whether the cooperation will be achieved. Two institutions at National level will play a major role in guiding and overseeing this process: the association of public utilities, ADKOM, and the association of municipalities, ZELS. Both associations will be supported by the project to become equipped for this role. In case the inter-municipal cooperation is established, the project will support the newly formed entities with financial and operational planning, tariff plans, investment plans, accounting system, asset management and digitisation. In case the cooperation is not (yet) established, the project will support the individual utilities in the pilot areas with the relevant technical assistance required.
Beneficiaries and Stakeholders
Ministry of environment and physical planning (MoEPP)
Main Beneficiary
Key Institutional Partners
Energy and Water Services Regulatory Commission (ERC)
Association of Public Utility Service Providers (ADKOM)
Association of the Units of Local
Self-Government (ZELS)
Municipalities and their respective Public Utility Companies (PUCs)
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© 2025 | Further support in the implementation of the reforms in the water sector
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