The Water Management Fund financial instrument will aim to increase the availability and quality of drinking water supply and wastewater management in order to protect the environment from the harmful effects of waste water, increase the number of users connected to centralised systems and the total number of users of centralised systems, improve the quality and efficiency of services and reduce losses and accidents in networks. According to the analysis of the Preliminary Assessment, the overall funding gap in the water management sector amounts to around EUR 3.5 billion. The Republic of Lithuania operates more than 14 000 kilometres of drinking water supply and more than 10 000 kilometres of waste water collection networks, more than half of which have deteriorated 60 % or more and have very poor water loss and infiltration rates. The population’s connection to drinking water supply and waste water collection networks varies considerably from one municipality to another — it is estimated that in order to reach the 95 % share of connected consumers, about 13 % of consumers need to be connected to the drinking water networks and 16 % of consumers need to be connected to the sewage network. The Fund will provide licensed public drinking water suppliers and wastewater managers with long-term loans (up to 20 years) for the development and renovation of drinking water supply and wastewater collection networks.