Massive investment gap looms for the European water sector
In order to meet the requirements of existing water legislation Member States require an additional annual average investment of €23 billion according to European Commission estimates. Current investment in the EU water services sector averages €33 billion per year (excluding figures for Croatia, The Netherlands, and Slovakia) according to the most recent EurEau data survey.
In 2024 a Water Europe socio-economic study called for €255 billion in water investments by 2030 to protect Europe’s economy and ensure environmental sustainability. The networking group said the increase was vital ‘to comply with the Drinking Water and Urban Wastewater Directives, excluding the added needs of agriculture, industry, or defence preparedness’. A 2020 OECD report noted that sanitation represented the bulk of the required additional expenditures, particularly in Italy, Romania and Spain.
Strategic role water services
EurEau, the federation of water service providers, has called for stronger support for drinking water and wastewater services under the next EU Multiannual Financial Framework (2028-2034). In a position paper the federation highlights the strategic role of water services for cohesion, security and climate resilience, and sets out key recommendations to ensure water services infrastructure is explicitly supported through the proposed National and Regional Partnership Regulation. “Concretely, the European Fund for Economic, Social and Territorial Cohesion, Agriculture and Rural, Fisheries and Maritime, Prosperity and Security (NRP Fund) and particularly the National and Regional Partnership Plans (NRP Plans) as its national-level implementing tool should ensure funding is appropriately tailored and ramped up in amounts commensurate with the water services sector’s needs,” the paper states.
Performance tracking
EurEau notes that updated national investment plans for water supply systems, wastewater collection and treatment systems, including networks, should be required as enabling conditions for contributing to the relevant funding objectives. And that the plans should be aligned with the implementation of the recast Drinking Water Directive and the recast Urban Wastewater Treatment Directive, and other relevant legislation. The position paper said such alignment would “allow for defining the adequate amounts of funding necessary to bridge the investment gaps, as well as ensure performance tracking and funding efficiency”.
Local and regional partners need to be included
On the subject of closing potential governance loopholes, EurEau states that the identification and prioritisation of local investment needs is adequately reflected in the NRP Plans. The federation said that it welcomed in principle the partnership framework in the draft regulation but that this should be amended to include local and regional level providers of essential territorial services, such as water supply utilities, as competent partners.
Long term investment plans necessary
EurEau recommends that to make EU funding envelopes effective for water services particular attention should be given to small and medium-sized water utilities and municipalities by ensuring simplified access to funding, tailored technical assistance, and proportionate administrative requirements. The federation also notes that, for sectors with long investment cycles such as water and wastewater services, the NRP framework should allow for multi-annual investment programmes extending beyond a single MFF cycle, in order to provide predictability for large-scale compliance projects.
Bridging the financial gap is key
The EurEau position paper adds that the ‘mounting challenges’ facing the water services sector should be addressed in the next MFF legal framework while the NRP Plans should deliver on bridging the financial gap arising from these challenges. The paper states that this ‘will be an essential step towards the realisation of the Union’s commitments under the European Water Resilience Strategy’.
European parliament steps up for long term funding
Members of the European Parliament (MEPs) voted last May to adopt recommendations for the European Water Resilience Strategy that puts water at the heart of the European Commission’s 2024-2029 five-year plan. Following a vote in the European Parliament, MEPS chose to adopt the strategy by 470 votes in favour to 81 votes against (92 MEPs abstained from voting).
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