study, there is a strong need for reform of the current water legislation and the current system of water resources management. the first step should be the adoption of a law on water resources management to replace the water law of 1997, which covers only surface water but not groundwater and which does not foresee permits for water abstraction. as of 2013 an inter-ministerial working group supported by the united nations economic commission for europe was working on the draft of a new water law that would be consistent with the principles of integrated water resources management and the eu water framework directive. in particular, the law would introduce permits for water use and discharge. it would also clarify the role of different government agencies involved in the sector. policy and regulation the state commission on water supply and energy, established in may 2008 and chaired by the prime minister, provides policy direction for water supply and sanitation. the ministry of regional development and infrastructure is responsible for sector administration. economic regulation of the sector, including the approval of tariffs, is the responsibility of the georgia national energy and water regulatory commission. in order to maintain its independence from the executive branch of the government, the commission is not funded through the government budget, but through membership fees that gas, electricity and water providers contribute in the sum of 0.5% of their income. the ministry of environmental protection and natural resources is in charge of water resources management and environmental regulation. the ministry of agriculture is responsible for assessing drinking water quality. in 2009 the government adopted an urban water and sanitation sector development plan "with a vision to ensure continuous and reliable water supply and safe sanitation services to all of georgia’s urban residents by 2020." investments of usd 1.65 billion are envisaged from 2011-2020 to reach this goal. investment management the municipal development fund (mdf) is an entity established by presidential decree that reports to the ministry of regional development and infrastructure and is under a supervisory board headed by the prime minister. it implements investment projects funded by external donors and the government, including in the field of water supply and sanitation. service provision kutaisi, georgia's third-largest city, is the largest city served by the united water supply company of georgia. georgian water and power (gwp) provides water and wastewater sewer services in tbilisi and surrounding areas. the company owns three hydropower plants that are mainly used for water production and delivery purposes. as of 2019, gwp served c. 500,000 residential and c. 32,000 commercial customers. georgian water and power is a subsidiary of jsc georgia global utilities that also owns other water utility companies and renewable energy assets across georgia. jsc georgia global utilities is 100% owned by lse listed investment platform – georgia capital plc. the state-owned united water supply company of georgia (uwscg) provides water and wastewater services throughout georgia for urban settlements excluding the service area of gwp and the autonomous republic of adjara. it has 2,700 employees, 303,788 residential customers and 15,400 commercial customers. it was created in 2010 by merging 66 local water companies. according to the adb, uwscg’s "effectiveness is severely constrained by the lack of technical and skilled staff to manage the service." batumi water company, kobuleti water company, and adjara local self-governments serve the autonomous republic of adjara, with 9% of the country’s population. however, de facto the government in tbilisi is involved in key decisions related to water supply and sanitation in adjara. financial aspects tariffs and cost recovery water and wastewater tariffs are set by the georgia national energy and water supply regulatory commission for three-year regulatory period. current regulatory period started in 2018 and ends in 2020, after which new tariff levels will reset based on approved tariff-setting methodology. the water and wastewater tariff in the gwp service area is gel 4.40 per m3 for commercial customers, gel 0.33 per m3 for meted residential customers and gel 3.89 per capita per month for non-metered customers. gwp is a financially viable company with revenues of c. gel 145 million and a net profit of c. gel 35 million as of 2019. gwp operates three hydropower plants, including the 130 megawatt zhinvali hydro power plant. for residential users in the uwscg service area that have water meters the combined water and sewer tariff was 0.50 georgian laris (usd 0.22) per cubic meter in 2016. the tariff for unmetered customers varies between 0.25 and 2.15 georgian laris per month depending on the municipality. commercial customers are all metered and are charged 4.31 georgian laris (usd 1.88) per cubic meter, more than eight times as much as residential customers. in 2010 uwscg had revenues of almost usd 20 million, with nondomestic consumers accounting for 67% of the tariff revenues. uwscg’s revenue collection efficiency was 72% (49% domestic and 94% nondomestic), with the poor performance attributed to customers’ nonpayment of tariffs in response to poor services. the volumetric tariffs in adjara are the same as for the service area of uwscg. investment batumi water supply under repair. no major rehabilitation works were carried out in the period between 1987 and 2004 and at the time more than 60% of the water distribution infrastructure needed to be replaced. from 2004 on the state and international donors began to invest heavily in reconstruction-rehabilitation, beginning in tbilisi in 2005-2007. in 2009 about 120 million usd was allocated for the rehabilitation and development of drinking water systems, and an additional 35 million usd for sewerage. however, according to another source actual government financing to improve water and sanitation infrastructure was insignificant as of 2009, with only usd 10 million spent to improve water supply and usd 1 million to improve sewerage nationally — a mere 0.1% of gross domestic product. financing the main sources of financing for urban water supply and sanitation in georgia outside the capital are loans and grants from external donors as well as the state budget. in the capital the main sources of financing are equity provided by the private owners of the company, the proceeds of local currency bonds and retained earnings. external cooperation the major external partners of georgia in water supply and sanitation are the asian development bank (adb), the european bank for reconstruction and development (ebrd), the european investment bank (eib), the european commission, germany, the netherlands, sweden, the united states and the world bank. asian development bank the asian development bank (adb) began to engage in the georgian water sector in 2008. in february 2015 adb and the government signed a $108 million loan agreement for a project to improve water services in zugdidi and sanitation services in poti. prior to the project, 84% of people in zugdidi had no access to piped water. in poti, a comprehensive sewage collection and treatment facility will be built. the project will also support the implementation of a public awareness program, including information on hygiene and sanitation. the project is the fourth under a $500 million multitranche financing program. a fifth loan for $75 million to support a sewerage system in zugdidi, and a sewage treatment plant in mestia, was approved in september 2015. european bank for reconstruction and development the ebrd co-financed a project to improve water and waste water services in kobuleti through the municipal development fund of georgia. the project is co-financed from a grant provided by oret (netherlands) and the millennium challenge corporation (usa). european investment bank the european investment bank lends eur 100 million to finance wastewater collection and treatment infrastructure in kutaisi, georgia’s third largest city. germany and the european union repair signs during water infrastructure construction in batumi. germany, through its development bank kfw, finances improvements in water supply and sanitation in batumi since 2006. prior to the project untreated wastewater was discharged into the black sea, tap water was not drinkable and water supply was intermittent. the project is also supported through a 9.5m eur grant of the european union. it includes the construction of a modern wastewater treatment plant, a functioning stormwater discharge system and the installation of about 37,300 water meters in multi-apartment buildings. these households will be billed based on their consumption, which is expected to be reduced from about 750 litres per day to below 200. united states the us millennium challenge corporation, through the georgian municipal development fund, supported a usd 57.7 million regional infrastructure development project for improvement of municipal water and sewerage services in five cities throughout georgia. world bank the world bank has been engaged in municipal infrastructure in georgia since 1995. it currently finances water supply and sanitation projects through the usd 30 million second regional and municipal infrastructure development project approved in 2014 and implemented by the municipal development fund of georgia. about 35% of the project will support drinking water supply and about 25% sanitation.