The purpose of the report is to help the Government Of Armenia: analyze the current levels and structures of water and wastewater tariffs compared to the costs of service; forecast costs under alternative scenarios, and forecast revenues under alternative tariff levels and structures; and recommend how Armenia can move from current tariffs to the tariffs required for full cost-recovery in the sector. This includes recommendations on: a transition plan for phasing in gradually higher tariffs; ways to improve the protection of the customers most vulnerable to tariff increases. The World Bank commissioned this study to inform the Government Of Armenia work in developing tariff policy and regulation in the Water & Sanitation sector. The report is structured as follows: section one gives introduction. Section two analyzes the current affordability of Water & Sanitation in Armenia and describes results from a nationwide willingness-to-pay (WtP) survey. Section three analyzes the cost of WSS in Armenia. It estimates revenue requirements for the service providers, and it develops optional structures for cost-recovery level water and sanitation tariffs. Section four presents alternatives for transitioning to cost-recovery level tariffs over time, while protecting the poorest customers.
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