Country Profile Regulation Tariffs Ecuador is a country situated in the northwest region of South America. Situated on the Equator, the country borders Colombia to the north, Peru to the east and the south, and the Pacific Ocean to the west. It also includes the Galapagos Islands in the Pacific, located approximately 1,000 kilometers west of the mainland. Administratively, the country is decentralized. It is divided into 24 provinces and 221 municipalities. Country Overview Year Figure Population 2021 17,797,737 Country Area (km2) 2022 256,370 GDP (billion USD) 2021 106.17 GDP per capita (USD) 2021 5,965.1 World Bank Income Group 2021 Upper middle Income World Bank Region 2021 Latin America & Caribbean Source: World Bank Data - Colombia Water and Wastewater Sector Structure Water management in Ecuador is divided between three levels of government. The central government is responsible for the management, control, and general regulation of the system; the provincial government for water irrigation management; local governments are in charge of drinking water and wastewater service provision. More specifically, the responsibility for drinking water supply and wastewater services in Ecuador is decentralized and provided by 221 Autonomous Decentralized Municipal Governments (Gobiernos Autónomos Descentralizados Municipales, GADM). They are allowed to choose the type of management they prefer – most of the municipalities use direct municipal management, while the rest utilize independent municipal public companies or employ joint or regional public utilities. Private operators play a minor role in water service delivery in the country. The most prominent private sector participation is present in the largest city in Ecuador, Guayaquil, where the water and wastewater service was transferred to a private company under a 30-year concession contract. At the same time, the former municipal utility EMAPAG-EP became the regulatory agency for the newly established concessionaire. On the other hand, in the capital city, Quito, water and sanitation services in the city itself and the rural parts of the municipality are provided by the utility Metropolitan Public Company of Potable Water and Sanitation of Quito (Empresa Metropolitana de Alcantarillado y Agua Potable de Quito, EPMAPS). According to the 2021 benchmarking study of 221 GADMs, the drinking water service coverage in the country was 78.8% while wastewater services reached almost 60% of the population. Water services in rural areas are mostly delegated from municipalities to small-scale water boards, called Juntos de Agua. There are an estimated 7,000 community water service providers in rural areas of Ecuador. Authority Level Role Ministry of the Environment and Water National Formed in 2020 as a merger of the Ministry of Environment and the Secretariat of Water (SENAGUA). It’s responsible for designing environmental policies and coordinating strategies, projects, and programs for the care of ecosystems and the sustainable use of natural resources. The National Water Secretariat of Ecuador (SENAGUA) National It aims to guarantee the fulfillment of the rights enshrined in the constitution, regarding access, use, and fair and equitable use of water through integrated and integrated management of water resources. Agency for the Water Regulation and Control (ARCA) National A sector regulator for water and wastewater services, aiming to increase the efficiency of regulatory management of the water sector in the country, control of the comprehensive and integrated management of water resources as well as the management of information in the water sector. Autonomous Decentralized Municipal Governments (GADM) Local Water and wastewater service providers, through various management models, in their respective jurisdictions. Private operators Local Water and wastewater service providers under concession contracts in a limited number of locations in the country. EMAPAG-EP Local Regulatory authority for the private concessionaire providing water and wastewater services in the largest city, Guayaquil. Number of WSS Service Providers 221 Ownership Public and private Service Type Water and Wastewater Geographic Scope Municipal The regulation and supervision of 221 municipal governments providing water and wastewater services in Ecuador is done by the Agency for the Water Regulation and Control (ARCA). The ARCA was established in 2015 by Executive Decree No. 310. According to that Decree, ARCA has the competence for “the regulation and control of the integral and integrated management of water resources, of the management of the quality and quantity of water in its sources and recharge areas, the quality of public services related to the water sector and all destinations, uses and economic exploitation of water.” ARCA collects technical and economic data, as well as a set of performance indicators of all providers under its jurisdiction, and publishes annual benchmarking studies. On the other hand, the largest private concessionaire in the country is regulated by the EMAPAG-EP, a municipal body that is in charge of ensuring that the private concessionaire complies with the contract and its obligations. It also sets the water and wastewater tariffs. The concessionaire applies a cross-subsidy-based tariff system in which large consumers subsidize the small ones. Mission ARCA’s mission is to regulate and control the comprehensive and integrated management of water resources, their uses, economic benefits, and the quality of public services linked to water, promoting the efficient, legal, responsible, and sustainable use of this heritage. Water and Wastewater Regulations Legislation and Policies Year Description Organic Law on Water Resources, Used and Exploitation of Water (LORHUyA) 2014 Defines water as a national strategic asset and a public resource subject to state regulation. It declares access to water as a human right. NTE INEN 1108: Technical Norms for Potable Water 2020 Establishes the physical, chemical, and microbiological parameters for drinking water, based on the World Health Organization guidelines. Executive Decree No. 310 2014 Reorganizes the SENAGUA and provides for the formation of regulation authority ARCA and transfer of powers from SENGAUA to the newly established water regulator. Organic Code of Territorial Organization (COOTAD) 2010 Establishes the competencies for the provision of water and wastewater services and delegates them to decentralized autonomous governments (GADMs). Areas of Regulation Areas Agency for the Water Regulation and Control (ARCA) Tariff Calculation No Tariff Approval Yes Licensing Water and/or Wastewater Service Providers No Business plans approvals No Performance indicators monitoring Yes Economic Data Collection Yes Technical Data Collection Yes For a more complete list of tariffs can be found in the IBNET Tariff Database - Ecuador