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

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C H A P T E R 3
C H A L L E N G E S T O E N V I R O N M E N TA L F I N A N C I N G I N S E E
S T R AT E G I C M O V E S
Investment planning
National environmental investment planning and project identification
Only the former Yugoslav Republic of Macedonia has adopted a national environmental
investment strategy (NEIS). Such strategies provide a clear overview
of the national environmental investment needs on the one hand, and of the national
financial framework on the other, including budgetary allocations, IPA funding,
bilateral grants and IFI financing. They also analyse institutional capacity to
carry out investments. In an ideal case, environmental investment strategies should
come up with ranked priority lists based on clear and transparent criteria and comprising
projects that are clearly supported by the government.
Project identification and preparation
Although at one time the countries lacked capacity for project identification
and preparation, huge progress has been made since 2001, partly due to the implementation
of the PEIP. However, there is still room for improvement. Project
preparation gaps have been covered by project preparation facilities.
General observations
• Financing environmental infrastructure projects in compliance with the EU
environmental acquis requires the establishment of a clear legal and strategic
framework and the reform of institutional and financial systems. The process
necessitates significant financial allocations as well as the political will to reform
the main institutions.
• The global economic recession has added further constraints to the financial situation
in the SEE region and has affected investments in environmental infrastructure;
some infrastructure projects have been suspended.
• In relation to affordability, in many cases large-scale infrastructure investments
are not attractive due to long payback periods and other constraints.
• The full transposition of the investment-heavy directives is an important driver
for environmental infrastructure projects as it will place a legal burden on national
and local governments to undertake the necessary actions for investments
to take place.
• The lack of key sectoral and environmental investment strategies delays environmental
investments as strategies set the framework and the direction for follow-up
laws and regulations. The same is valid for local management plans.
Drafting strategies and plans through wide stakeholder dialogue has the benefit
of combining different interests at an early stage and of attracting support for
future actions.
• The insufficient level of enforcement of environmental legislation in SEE countries
is a hindrance to the proper functioning of environmental infrastructure