The Government of the Republic of Belarus (GoB) plans to increase district heating tariffs to cost-recovery levels and gradually phase out subsidies, replacing them with social assistance programs. Residential DH tariffs in Belarus are currently at roughly 10†“21 percent of cost-recovery levels. DH subsidies are highly regressive, add costs to business, and create significant fiscal risks and macroeconomic vulnerabilities. The study analyzes the social, sectoral, and fiscal impacts of the proposed tariff reform, and identifies and recommends measures to mitigate adverse impacts of district heating tariff increases on the households. The analysis shows that a negative social impact is manageable if a tariff increase is accompanied by countervailing measures to compensate for the loss of purchasing power, in particular of the poor, through targeted social assistance and energy efficiency programs. The reform is more likely to be successful if communication campaigns to address consumer concerns are carried out before significant price increases, and consumer engagement and monitoring systems are established. When tariff reform and mitigation measures are properly sequenced and coordinated, the reform will become more socially acceptable, consumers will benefit from better quality of services, the government will achieve positive fiscal savings, and the DH sector will become sustainable in the long term. The study analyzes the social, sectoral, and fiscal impacts of the proposed district heating tariff reform in Belarus, and identifies and recommends measures to mitigate adverse impacts of district heating tariff increases on the households.

The Government of the Republic of Belarus (GoB) plans to increase district heating (DH) tariffs to cost-recovery levels and gradually phase out subsidies, replacing them with social assistance programs. Residential DH tariffs in Belarus are currently at roughly 10-21 percent of cost-recovery levels. DH subsidies are highly regressive, add costs to business, and create significant fiscal risks and macroeconomic vulnerabilities. The purpose of this report is to analyze the social, sectoral, and fiscal impacts of the proposed tariff reform, and to identify and recommend measures to mitigate adverse impacts of DH tariff increases on the households. The analysis shows that: 1) the burden of higher DH tariffs will fall most heavily on low-income groups; 2) the current system of subsidies is unfair, benefitting wealthy customers more than the poor; 3) cross-subsidies undermine the competitiveness of industries in Belarus; and underpriced residential heat places an increasing fiscal burden on the GoB and risks macroeconomic instability. The analysis shows that a negative social impact is manageable if a tariff increase is accompanied by countervailing measures to compensate for the loss of purchasing power, in particular of the poor, through targeted social assistance and energy efficiency programs. The rest of the report is organized as follows: Section 1 describes the GoB's plans for the sector. Section 2 analyzes the principal challenges in the sector that necessitate tariff reform. Section 3 discusses tariff reform options and the likely impact of pursuing each of these options. Section 4 concludes by recommending a reform action package that includes customer communication and engagement, social protection measures and investments in energy efficiency. The appendices contain material supporting the analysis in each section.

This publication aims to provide the first comprehensive and consistent record of energy subsidies in the EaP region, with a view to improving transparency and establishing a solid analytical basis that can help build the case for further reforms in these countries.

This report presents a summary of findings from 208 focus group discussions (FGDs) held across eight countries (Armenia, Belarus, Bulgaria, Croatia, the Kyrgyz Republic, Romania, Tajikistan, and Turkey) in Eastern Europe and Central Asia (ECA) between 2013 and 2014. This report complements a large body of research on the poverty impacts of the energy sector reforms as well as quantitative data previously collected. Specifically, it gives voice to poor and middle-income citizens, and presents their perspectives and concerns with regard to rising tariffs and reforms in the energy sector overall. The report argues that by gaining a deeper understanding of the narratives that people attach to energy issues, governments can design better mitigation policies to address the reforms’ adverse impacts; better communication campaigns to convey the rationale of reforms to the public; and institute stronger accountability measures to help citizens protect their rights as consumers.

This series assists countries to improve their environmental policies by making concrete recommendations for better policy design and implementation. It helps integrate environmental policies into sector-specific policies such as those in agriculture, energy, transport and health. The present publication contains the third Environmental Performance Review of Belarus. It takes stock of progress made by Belarus in the management of its environment since the country was reviewed for the second time in 2005. It assesses the implementation of the recommendations made in the second review. It also covers issues of specific importance to the country related to legal and policy frameworks, the financing of environmental policies, greening the economy, and integrating environmental concerns into selected sectors, in particular air protection, water management, waste management, biodiversity, forests and protected areas, energy, agriculture, transport, forestry, tourism, environmental education and education for sustainable development, human settlements and health

This report is a companion piece to the summary report “Adapting to Higher Energy Costs: Findings from Qualitative Studies in Europe and Central Asia”, which looks at poverty and social impact of energy subsidy reforms. In particular, this report examines whether energy subsidy reforms in ECA region impact men and women differently, and what it means for energy subsidy reforms to be more gender sensitive. Prior global studies on gender and energy suggest that men and women have different priorities when it comes to energy use; that the reforms may have unequal effects on their well-being; that they face different challenges in interacting with energy providers or social assistance institutions; and may have different views on and knowledge of policy reforms. Qualitative findings of this research indicate that gender-related vulnerabilities in energy reforms occur for the following reasons: the relative economic vulnerability of women and female headed-households; intra-household roles related to energy use, and to procurement of energy sources and appliances; impacts of household coping strategies on the well-being of both women and men; and behavioral differences in how women and men interact with relevant institutions, such as energy providers and social assistance offices.