By the closing date, US$22.5 million had been disbursed; the rest of the loan was cancelled. The two largest water supply entities in the Istria region are the Istria Water Works and the Pula Water Works. These entities were the borrowers and sources of counterpart funding. The assessed project was part of a larger project that was appraised and approved before the breakup of Yugoslavia. The original project was split into two separate projects in 1993 — the Istria component in Croatia and the Slovene Coast component in Slovenia. The Slovenia Project was completed at the end of 1998. The focus of the present assessment is on the Istria project. This assessment finds that the project achieved its main objective, to eliminate water shortages in the Istria region. These shortages had become a major obstacle to the growth of the tourism industry, a mainstay of the area's economy. Improving the efficiency of the two water operators - by reducing their unaccounted-water ratio and making them financially viable - was another main objective. This objective was only partially achieved as both operators are yet to meet their cost recovery targets. The assessment, however, verifies that positive progress has continued in these two areas since loan closing in 2000. Moreover, the water companies have a growing number of service connections, and the declining staff index within both companies is a clear indication of improving efficiency.