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Unprecedented sanctions against Russia by the collective West has challenged the economic policy of our country, with import substitution and forced industrial development among the key priorities. Supplying resources for regional economies becomes crucial. Circular economy modelling based on the principles of resource conservation and zero waste appears a prominent tool for ensuring rational consumption and striking a suitable balance between the different interests. We adapt a circular economy model to assess the rational use of energy and water resources in Don river basin located in the South of Russia. We argue that Southern Russia represents a case of high relevance due to lack of modern manufacturing machines and up-to-date equipment, as well as the strategic significance of these areas for the whole Russian economy. River flow forecasting revealed available water resources which might be distributed. We also calculated water management balances and assessed the availability of water resources for participants of Don water management complex. Our model takes into account the difference in industries in terms of their technological advancement and therefore allows determining resource intensity parameters in context of possible coalition compromise. This study contributes to existing research since we combine a regional basin approach and a concept of closed-loop economy to deal with statistics on Don river basin.

usage paradigm, efficient usage of water resources, socioeconomic development tendencies of GRP water intensity indicator changes allow not only to define the current situation pertaining to water use, but also to determine the direction of the control actions to increase its efficiency. In the study, this hypothesis is confirmed. Unlike other existing approaches and models which are oriented chiefly towards the identification of scarce water resource allocation options in accordance with the standards of water use, this article implements an approach to the assessment of the efficiency of water usage as a strategic resource for socioeconomic development at the regional level. Based on the analysis of the GRP water intensity indicator and the problematic nature of region grouping from the standpoint of rational water usage, regions are identified. The results can serve as a guide for designing regional development strategies.