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International financial assistance
This section contains an overview of donor activities in SEE and donor involvement
in financing environmental infrastructure projects. The European
Union is the main international donor in SEE. The overall objective of its assistance
in SEE is to bring the countries closer to EU principles and standards. In the
area of infrastructure, projects are selected on the basis of their contribution to laying
the foundations for sustainable economic development and growth, and in particular
to meeting basic infrastructure needs in the least-developed countries.
However, in the candidate countries additional emphasis is placed on core investment,
especially in the fields of environment, transport and energy.
Sources of grant support — Instrument
for Pre-accession Assistance (IPA)
Financial assistance from the European Union to SEE countries is provided
through the Instrument for Pre-accession Assistance (IPA). Initiated in 2007, the
IPA represents the main instrument of financial support channelled from the EU
and replaces previous pre-accession mechanisms such as Phare, ISPA and CARDS.
The main objective of the IPA is to help beneficiary countries to implement the reforms
needed to fulfil EU membership requirements and to make progress in the
Stabilisation and Association Process (EC, DG Regio, IPA website). The instrument
is designed to simplify all pre-accession assistance into a single framework
both for candidate countries (Croatia and the former Yugoslav Republic of Macedonia)
and for the potential candidates, and to facilitate the transformation from
one status to another. Under IPA assistance, special emphasis is given to institution
building; strengthening the capacities and structures needed for the management
of pre-structural funds; and financing infrastructure investments. The average
annual allocation for SEE under the IPA for the period 2007 to 2011 is about EUR
800 million (EC, 2008). This represents the highest per capita amount provided
by the EC to any other region in the world (approximately EUR 30 annually). Allocations
to the environment under Component I for 2007 and 2008 totalled EUR
63 million and EUR 59 million respectively. Multi-beneficiary environmental programmes
allocated a total of EUR 3.7 million (EC SEC [2009] 1309).
The IPA is an important source of funding for projects focusing on the institutional
strengthening and capacity building of national authorities in the field of
environment, sustainable resources management, environmental policy, environmental
infrastructure upgrading and reconstruction, water supply and sanitation facilities,
municipal waste management, air quality improvement, and environmental
impact assessment. The IPA is also regarded as a potential source of funding for
urban wastewater management projects, under the condition that a reform of the
public utilities is carried out addressing cost-recovery issues.
Three of the IPA components are directly related to the financing of environmental
projects — Component I: Transition Assistance and Institution Building;
Component II: Cross-Border Cooperation (with EU member states and other
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