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
mandate covering the period 2007 to 2013, established for the modernisation of infrastructure
facilities in the energy, transport and environmental sectors (EIB 2008).
After an initial focus on the urgent reconstruction and rehabilitation of basic
infrastructure, EIB activity in SEE has been concentrated on the upgrading and
modernisation of the municipal infrastructure facilities, either with direct loans or
through dedicated lines of credit to local banks (global loans). The bank works
closely with the EC in order to support project preparation and co-finance projects
within the IPA. The EIB also co-finances operations with other IFIs, particularly
the EBRD, WB and CEB.
The bank’s lending priorities include environmental protection and improvement,
sustainable energy production and the improvement of trans-European
transport and telecommunications networks. Major projects financed in this
framework were the rehabilitation of hydropower plants and electric power distribution
systems in Bosnia and Herzegovina; the construction of the Belgrade bypass
and the rehabilitation of Gazela Bridge in Serbia; a road rehabilitation programme
in Bosnia and Herzegovina; and the construction of a motorway in Albania. In all
SEE countries the bank is providing financing to small and medium-scale projects
in municipal infrastructure, including the rehabilitation and construction of water
supply and sewerage treatment facilities.
The World Bank (WB), as an international financing institution, provides low-interest
loans, interest-free credit, and grants to developing countries for a wide array of
purposes, including investments in municipal infrastructure, environmental protection
and natural resources management. The WB is one of the implementing agencies
for the Global Environment Facility (GEF). The GEF has been used in Bosnia and
Herzegovina, Croatia and Serbia in the context of the Black Sea and Danube Basin
GEF Partnership, and in other SEE countries for environment projects
along with WB loans (EC, 2009). The International Finance Corporation, as a part
of the World Bank Group, together with USAID and a number of European and
Nordic donors, has established the Balkans Infrastructure Development Facility (BID-
Facility) to provide technical assistance and to help public sector entities in SEE to attract
private sector participation and investments in infrastructure development.
The World Bank has been extensively engaged in providing financial support,
technical assistance, policy advice and analytical services in support of environmental
projects in SEE. One of the priorities in the region is to guarantee the improved
management of municipal infrastructure and the delivery of services. The WB’s specific
objectives in the environmental field are water reform and rehabilitation, solid
waste management and district heating; access to clean water supply and sanitation
in rural areas; private sector and business growth with an emphasis on environmental
protection incentives; and support for a transparent legal and regulatory environmental
framework. In the SEE region, the largest shares have been channelled to
pollution abatement, water and land resources management projects.
In each of the Stabilisation and Association Process countries, loans are provided
in the form of specific investment loans with a long-term focus (five to 15 years) supporting
infrastructure development projects; short-term and development policy loans
enhancing policy and institutional reforms. The WB Group also offers special