###### Abstract  
An important part of environmental degradation is caused by the discharge of untreated or mistreated wastewater. The reuse of water is paramount to the National Strategic Plan for the Water Supply and Wastewater Sanitation Sector in Portugal and Spain. Since centralized treatment systems have proved to be inefficient, tackling environmental issues requires a regional approach. Wastewater treatment plants (WWTPs) mitigate environmental impacts and contribute to the financial savings of other firms. However, the literature evaluating WWTPs' financial performance and economic sustainability is scarce. The implementation of a resource recovery technology depends heavily on economic viability. Thus, this paper analyses the financial sustainability of 222 WWTPs in the Iberian Peninsula by NUTS II regions in 2016-2019 to assess the region with the best performance and financial stability and provide regional policy implications. Using the SABI database, this research encompasses a numerical and narrative analysis of key financial ratios. Results show that firms in Algarve and La Rioja exhibit higher financial sustainability when compared to other regions. Results can foster enhancements in the governance of regulated utilities. water; economic sustainability; Portugal; Spain; regional analysis +
Footnote †: journal: Applied Sciences  
14 October 2021  
119876656  
treated, is generating an increase in eutrophication events, resulting in mass deaths of aquatic organisms, reduction in biodiversity, red tides, etc. [8]. The negative consequences for public health and the environment due to the contamination of water by bacteria, nitrates, phosphates, and solvents in rivers and lakes that flow into the oceans are evident. On the other hand, the increase in drinking water consumption has demanded alternative solutions regarding the supply that increase costs and hinder the maintenance and improvement of treatment services [5]. As a result, resource recovery in the wastewater sector has persisted basically underexplored and embodies a research frontier enticing greater attention in the past decade [9]. Wastewater treatment includes separation of suspended and dissolved solids, oxidation of oxygen-seeking components, neutralization, and removal of toxic substances, as well as the removal of unfixed dyes [10]. Nevertheless, wastewater treatment methods, in addition to being efficient, must be sustainable [11], and although sustainability is often understood as exclusively environmental, the concept includes economic and ethical-social aspects [12]. In Spain, the situation of wastewater treatment and water reuse changed with the Water Law, approved in 1985. A new strategy was initiated regarding pollution control due to numerous stipulations that changed the traditional approach of discharges that were considered [13]. The new approach incorporated in the Water Law was soon changed when Spain joined the European Economic Community (EEC) in 1986 and had to comply with the European normative regarding water quality. Firstly, Spain had to incorporate directives with quality objectives (bathrooms, fish life, pre-drinking, etc. ), and next directives of emission standards whose main exponent was the Directive 91/271/EEC concerning urban wastewater treatment. In Spain, large-scale purification began with the National Plan of Sanitation and Water Treatment (1995-2005, PNSD), whose main objective was to abide by the Directive 91/271/EEC. In 2018, Spain was classified as the country with the highest rates of wastewater reuse from the European Union, and it belongs to the top 10 worldwide [13]. Many previously published studies have addressed wastewater treatment from a variety of perspectives. However, studies referring exclusively to wastewater treatment productivity and economic impact are scarce. Upon reviewing all the available literature on the subject, we find that only a few have been published on this subject in Spain [14,15].