Strategic Moves - Regional Environmental Center for Central and ...
Strategic Moves - Regional Environmental Center for Central and ...
Strategic Moves - Regional Environmental Center for Central and ...
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ing the levels of expenditure in the new member states. However, old member states<br />
still allocate a far bigger share <strong>for</strong> the environment. Even Serbia, Kosovo (as defined<br />
under UNSCR 1244) <strong>and</strong> Croatia — the biggest investors in environmental<br />
protection in the region — directed less than 0.04 percent of their national<br />
GDP <strong>for</strong> this purpose in 2004–2005.<br />
Domestic financing of environmental<br />
infrastructure projects in SEE<br />
There is a funding gap in Albania with respect to environmental projects<br />
due to the low level of domestic funds. Legislation passed in 2002 introduced<br />
the possibility of generating income through environmental taxes, tariffs <strong>and</strong><br />
charges. <strong>Environmental</strong> investment projects are almost fully financed with assistance<br />
from bilateral donors <strong>and</strong> IFIs. However, the Ministry of Public Works,<br />
Transport <strong>and</strong> Telecommunications (MoPWTT) has elaborated a mid-term financial<br />
plan <strong>for</strong> investments in the area of water <strong>and</strong> waste infrastructure, <strong>and</strong><br />
manages a capital investment programme that contributes to the development<br />
of communal environmental infrastructure (ADA, 2008a). The programme envisages,<br />
<strong>for</strong> the year 2011, the construction of four regional l<strong>and</strong>fills <strong>and</strong> the closure<br />
of five existing dumpsites in five regions. State budget allocations <strong>for</strong> the<br />
waste sector <strong>for</strong> 2009 are EUR 2.3 million; <strong>for</strong> 2010 EUR 5.2 million; <strong>and</strong> <strong>for</strong><br />
2011 a predicted EUR 13 million.<br />
Only projects included in the Public Investment Programme (PIP) of Bosnia<br />
<strong>and</strong> Herzegovina are considered a national priority <strong>and</strong> eligible <strong>for</strong> financing. The<br />
PIP comprises projects <strong>for</strong> which financing has been secured, or will be secured in<br />
the future period, including environmental infrastructure. Investments in the waste<br />
<strong>and</strong> water sectors are financed mainly by the EU or IFIs. However, the federal government<br />
also provides financing <strong>for</strong> water <strong>and</strong> waste projects from the federal<br />
budget, even though current financing conditions are not favourable (REC, PEIP<br />
Analytical Reports 2007–2009).<br />
In Croatia, the <strong>Environmental</strong> Protection Operational Programme, co-financed<br />
by the IPA, provides the basis <strong>for</strong> the financing of environmental infrastructure<br />
projects. A large proportion of projects receive funding through the<br />
recently established <strong>Environmental</strong> Protection <strong>and</strong> Energy Efficiency Fund<br />
(EPEEF), the Croatian Bank <strong>for</strong> Reconstruction <strong>and</strong> Development (HBOR), <strong>and</strong><br />
previous EU programmes (Phare <strong>and</strong> ISPA). One of the priority objectives of the<br />
HBOR includes environmental protection, the sustainable use of natural resources,<br />
<strong>and</strong> the financing of infrastructure, including environmental infrastructure (ADA,<br />
2008b). The bank has elaborated specific loan programmes: an infrastructure loan<br />
programme <strong>and</strong> an environmental protection loan programme dealing with the<br />
upgrading <strong>and</strong> reconstruction of municipal infrastructure. Loans are given <strong>for</strong> up<br />
to 15 years with an annual interest rate of 4 percent <strong>for</strong> projects investing in specially<br />
protected areas <strong>and</strong> 6 percent <strong>for</strong> all others. In 2007, loans to the amount of<br />
EUR 66 million were approved by HBOR to further promote investments in environmental<br />
protection <strong>and</strong> energy projects.<br />
C H A P T E R 7<br />
F I N A N C I N G E N V I R O N M E N TA L I N F R A S T R U C T U R E I N V E S T M E N T S<br />
S T R AT E G I C M O V E S 149