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

the field of infrastructure; identifying projects available and eligible for future funding;
and carrying out preparatory studies for specific projects, including institutional
framework studies, demand and tariff studies, project feasibility studies and
beneficiary assessments. The facilitation and structuring of project financing, the
groundwork for project implementation and the identification of additional technical
assistance are also provided. These facilities are established in countries where
project preparation capacities are the weakest. The links between the facilities described
below is continuous. Project preparation undertaken by the Environmental
Project Preparation Facility (EPPF) is continued by the Infrastructure Project
Facility (IPF) in 2008. The IPF is to become part of a broader Western Balkan Investment
Framework with closer cooperation with IFIs in 2010.
The Environmental Project Preparation Facility (EPPF) was launched by
the EC in 2006 to run for 24 months, with an overall budget of EUR 1.8 million.
All SEE countries were beneficiaries, with special emphasis on the former Yugoslav
Republic of Macedonia and Albania. The specific objective of the EPPF was to
provide support in project preparation, to speed up IFI financing of priority pollution
abatement projects, and to help overcome the constraints facing the environmental
sector. All environmental sectors were eligible to receive financing from
the EPPF. Other objectives included enhanced collaboration with IFIs in the identification
of priority environmental investment projects and the transfer of knowhow
in project development to SEE (IPF, 2008).
During the implementation period, a total of 11 project preparation studies
were completed, representing potential investments of around EUR 160 million.
These project preparation studies included an assessment of the technical, environmental,
social, financial, economic and institutional viability and sustainability
of the projects, including consumer affordability and tariff strategies that would
contribute to cost recovery from service beneficiaries without imposing undue financial
burdens on them. The recommended proposed projects are therefore considered
to be both sustainable and bankable. The final EPPF project pipeline is
presented in Table 21.
A large number of projects prepared by the EPPF are currently co-financed and
undergoing implementation. The high success rate for funded projects is due to
close collaboration with IFIs from the beginning of the process. Coordination with
IFIs during the preparatory stages facilitates financing once project preparation has
been completed. A positive example is the project “Small and Medium-Sized
Towns Water and Wastewater Development” in Bosnia and Herzegovina, which
has been taken up by the IPF Municipal Window. The following municipalities
will receive grant funding for project implementation, thus project preparation will
translate into project implementation co-financed by a grant from the EC and a
loan from the EIB generating some EUR 121 million in total project investment
in Bosnia and Herzegovina between 2010 and 2014: Bosanski Petrovac Water and
Wastewater Development Project; Velika Kladusa Water and Wastewater Development
Project; Orasje Water and Wastewater Development Project; Soroki Brijeg
Water and Wastewater Development Project; Posusje Water and Wastewater
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 175