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4 Affordability and costs
This chapter discusses the factors contributing to WSS affordability, and the financial and non-financial costs borne by unconnected households, particularly in rural areas.
Access to safe and reliable WSS is only one side of the coin. For access to be meaningful, the service (when provided by a third party) or resource (when provided by the household itself) must be affordable. Affordability is one of the central goals of SDG 6 and it needs to be taken into account as EECCA countries reconsider their approaches to expanding WSS services. In the EECCA region unit costs (per m3 or per person served) tend to be high compared to the level of service received by end-users. Affordability is an issue in several EECCA countries, especially topical in rural areas where household income is typically lower. Ability-to-pay (ATP) and willingness-to pay (WTP) assessment following well-established methodologies developed by the EBRD and OECD help prevent from over-estimating this issue it by populist politicians. A threshold of between 3% and 5% (a mean of 4%) of disposable household income is typically used to define affordability, 1 but this varies by country and community context. 2 For example, water rich countries like Kyrgyzstan and Tajikistan may have a threshold of 2.5-3%. Countries that experience permanent or seasonal water stress and who therefore assign a higher value to scarce water, like Moldova, might have a threshold of 5%. For this reason, data on household WTP is given significant weight. Low-income customers can be protected, but capacity of existing, not always well-targeted, social support systems in many EECCA countries is very limited.3 Not having access to water imposes a cost on individuals and communities. There are financial and nonfinancial costs associated with the delivery of WSS services. Financial costs. Rural communities who do not have access to improved WSS services face different cost structures from their urban counterparts. Tariffs account for most urban water RURAL WATER SUPPLY AND SANITATION: REACHING SDG 6 IN EASTERN EUROPE, CAUCASUS AND CENTRAL ASIA © OECD 2022
