Strategic Moves - Regional Environmental Center for Central and ...

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C H A P T E R 7
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
S T R AT E G I C M O V E S
vironment and Spatial Planning and is aimed at the remediation of illegal dumpsites
in more than 10 locations, the cleaning of riverbeds, as well as the capacity building
of eco-industry. A total of EUR 6.5 million has been allocated for this purpose.
In 2006–2007, EUR 20 million (1.2 percent of the total state budget allocations)
were directed to environmental protection measures. The main emphasis was on the
underdeveloped waste management sector (EUR 11.4 million), followed by water
supply and wastewater treatment (EUR 4.9 million) and air pollution (EUR 3.7 million).
In 2008, the Ministry for the National Investment Plan approved around EUR
4.2 million for water sector infrastructure and disbursed around EUR 1.1 million in
11 Serbian municipalities (REC, PEIP Analytical Reports, 2007–2009).
Between November 2008 and June 2009, the effects of the global financial crisis
could be observed on environmental investment projects financed from the national
budget. The Ministry for the National Investment Plan had to cut down the
amount of funding previously agreed, and most municipalities (especially the
smaller and poorer ones) are finding it increasingly difficult to secure funds for
projects. Many projects that had seen progress in the previous period came to a
halt, while only some of the richer and more proactive municipalities made progress
in this period. For the next period, important and increasing challenges will probably
be felt in the smaller, less-developed municipalities (REC survey, 2009).
The establishment of environmental protection funds in SEE
The establishment of an environmental fund is one of the available institutional
solutions with respect to environmental investments. In CEE countries, experiences
with environmental funds have been mixed and there are examples of both
well-functioning funds and funds that have failed to perform and have been dissolved.
This suggests that environmental funds are an institutional form that has no
guarantee of success per se. Some of the prerequisites for success are clear responsibilities,
a fixed time horizon, and clear sources of capitalisation. Setting up a fund
also requires significant investments in terms of human resources.
In Albania, preparatory work began in the mid-1990s to establish an environmental
fund, but the Ministry of Finance stopped the initiative. Both the
governmental programme and the Intersectoral Strategy for the Environment
call for the establishment of a national environmental fund (REC, PEIP Analytical
Reports, 2007–2009).
Environmental funds have been established in both entities of Bosnia and
Herzegovina. The Environmental Fund of the Federation of Bosnia and Herzegovina
(EFFBiH) and the Environmental Fund of Republika Srpska (EFRS) were
founded by the governments of the two entities under their respective Law on the
Environmental Fund (in 2006 in FBiH; and in 2002 in RS) defining all the necessary
conditions and scope of activities of the funds. The funds were established
for the purpose of collecting and allocating funding for the development of water
management infrastructure; waste minimisation and the adoption of integrated
waste management; and the construction of other municipal infrastructure facilities
necessary to meet EU accession standards.