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
The Western Balkans Fund has already established itself as the main instrument
for funding technical assistance assignments across SEE, covering a wide range
of sectors with allocations of more than EUR 25 million, about EUR 17 million
of which have been approved as grant support for more than 40 projects over the
whole region. The fund focuses on municipal infrastructure improvement, transport,
communications, tourism, and financial and private sector development. In
the area of environment and municipal infrastructure, the fund focuses on providing
support to projects for water supply, wastewater collection and treatment,
solid waste management, district heating, natural gas distribution and urban public
transport. During the period 1991 to 2008, the EBRD signed agreements on 18
environmental infrastructure projects for loan support in SEE (EBRD, 2008). The
majority of projects were for water supply and sewage collection and treatment.
The global financial crisis has placed severe demands on financial institutions,
businesses, utilities and government agencies, thus the EBRD has indicated as a priority
the reinforcement of financial institutions investing in improvements in environmental
infrastructure and business development (EBRD, 2009).
The EBRD has been active in SEE countries for several years and is progressively
increasing its long-term lending to the region. It plays a crucial role in supporting
environmental infrastructure projects, with particular emphasis on road
rehabilitation, solid waste management and water supply and wastewater treatment.
The focus of the EBRD’s activities is the continuous implementation of municipal
infrastructure projects under a sovereign guarantee by the institutional
strengthening of entities and improving the efficiency of operating companies. In
candidate countries, the EBRD concentrates on working with a number of large
and medium-sized municipalities to develop environmental infrastructure projects
for prospective IPA co-financing. Additional priorities for the EBRD in the region
are the promotion of policy dialogue; support to the development of viable
schemes for the privatisation and commercialisation of state-owned utilities; and
the adaptation of the fiscal decentralisation process (EBRD, 2009).
The Council of Europe Development Bank (CEB) is a multilateral development
bank with a mission to contribute to strengthening social cohesion in Europe
and to achieving sustainable and equitable growth. It grants medium- to
long-term loans and provides guarantees and technical assistance to social infrastructure
projects in close collaboration with other IFIs. The CEB channels financial
assistance to the region through long-term loans with low interest rates and
specific repayment schedules adapted to meet national borrower requirements. Its
current activities cover environmental protection, public services infrastructure
and the financing of projects in response to emergency situations in the event of
natural or ecological disasters (CEB, 2007a). At present, between 17 and 20 percent
of the total approved amount relates to environmental projects and the prevention
of natural disasters.
Faced with the impact of the crisis in CEE and SEE, the CEB recently significantly
intensified its role in the financing of public social infrastructure, with particular
focus on municipal infrastructure and enhanced coordination with the
Neighbourhood Investment Fund (NIF) and the Infrastructure Project Facility