Much of the country’s water and waste facilities suffered damage during the war. The loss of financial support during that period and the lack of maintenance led to a general deterioration of the water supply networks in the country leading to increased water losses through leakage, and a reduction in storage capacity and distribution. It is estimated that up to 50% of the fresh water in storage in Bosnia and Herzegovina is lost through leakage. Intermittent supply and a general depletion of water collection and storage have led to fluctuations in pressure within the water systems. When the pressure falls polluted groundwater can infiltrate the system and puts additional strain on existing equipment that causes further breakage. Contamination of some water supplies, lack of drinking water in some areas, and the creation of unauthorised waste dumps all leads to further health hazards.

The present water supply infrastructure is unable to meet demands as the country develops into a viable economic state. Much industrial activity is reduced due to the insufficient capacity of the current water and power facilities. Significant capital investment is required in these sectors to provide viable capacity for future demands. Further increase in demand will occur with the expected return of refugees and displaced persons making a viable water supply and effective waste treatment strategy a necessity.

The repair, upgrading, and efficient management of the current water and waste systems in Bosnia and Herzegovina is a priority in order to improve basic living conditions, facilitate the returns process, and assist in the renewed activity of local industries. The EC water and waste programme and the "Europe for Sarajevo" programme aim to assist in this process. Over 48 MEURO has been committed to the rehabilitation of this sector through 1996 to 1999, with specific focus on restoration of water storage levels, improvement of waste management, assistance to the reconstruction of existing water and waste collection facilities, and the strengthening of the institutions that are responsible for water management, regulatory frameworks and standards.

In 1996 the Essential Aid Programme provided 11.7 MEURO to the water sector and delivered repair equipment for the fresh water distribution network across Bosnia and Herzegovina. 8.8 MEURO was spent in the Federation and 3 MEURO was allocated to the Republika Srpska. The "Europe for Sarajevo" programme, which consisted of 35 MEURO in total, allocated 8.4 MEURO to the rehabilitation of the Sarajevo water supply facilities in 1996.

In 1997 the EC water and waste programme aimed to further assist the reconstruction process in the water and waste sector. Project areas were divided into geographic regions chosen because they are high-priority areas for returns and funding was subsequently allocated in the following order: approximately 22 MEURO for the Federation water and waste systems (Sarajevo and surrounding area, the Una Sana Canton, and Central Bosnia Canton); and, 11 MEURO for the Republika Srpska (the Anvil and Banja Luka areas, and the Posavina corridor, depending on conditionality.)

The wider objectives of the EC water and waste programme are:

• To support the rehabilitation of the existing water supply distribution systems in selected municipalities.
• To safeguard public health by improving the quality of drinking water and increasing the efficiency and availability of water supply systems.
• To promote efficient, safe and ecologically sustainable water management and use of water resources.
• To further strengthen the institutions involved in water management and support the development and enforcement of environmental regulations.

The EC funded water projects that have been implemented through 1998 have focused largely on the rehabilitation of existing network systems, construction of necessary facilities, provision of supplies and equipment, and projects that detect unaccounted for water (UAF). The UAF projects aim to assess where leakage occurs within the network in order to implement repairs and provide the municipal water boards with increased institutional capacity through training and management plans. The EC programme benefits the local population, encourages returns, assists the local water companies (Vodoprivredas’), and the municipalities and local authorities. The EC also works in close co-ordination with the relevant ministries (e.g. the Ministry of Agriculture, Water Management and Forestry, the Ministry of Health, and the Ministry of Physical Planning and Environment) and other international organisations that are working in the same region.

The 1999 programme complimented institutional related activities with a budget of 1 MEURO for water.

All the projects are implemented in line with current EU standards and regulations with particular emphasis on EU policies in the implementation of the UAF projects, and the institution strengthening and solid waste management programmes.