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

gional or local institution — an authority or utility company owned by the local authority.
In general, local governments and their associated bodies lack not only adequate
skills to prepare investment projects, but also the skills to oversee and
cooperate with expert consultants, whether domestic or international, in the preparation
of their environmental investment projects. Some of the issues that complicate
project preparation are presented below.
Willingness to pay
In general, the problem of unpaid bills in SEE is significant. In a context in
which water supply and waste management services were previously provided almost
free of charge, any hike in price is likely to result in resistance.
Regionalisation
Both water and waste utilities in SEE are currently highly fragmented. New
EU-compliant infrastructure requires high levels of investment but is also intended
to serve a bigger population. There is therefore a need for better cooperation between
municipalities, as well as the establishment of new financial, legal and institutional
incentives, and this need will remain in the future.
Availability of data
It is very important to adapt the size of the project to current and future needs.
Updated population data and reliable forecasts of population growth and demographic
changes are vital to proper project sizing.
Locating infrastructure
When locating infrastructure, project proponents can opt for a “centralised”
approach, where all elements of the infrastructure are placed in one location; or a
“decentralised” approach, where elements of the infrastructure are placed in different
locations. In general, there is no ready formula for success in a given project
location, as conditions differ for each project. Nevertheless, the chosen project location
can have an impact on many other areas of municipality activities such as
economic development, biodiversity protection and unemployment. Locating infrastructure
projects stimulates the NIMBY (“not in my back yard”) syndrome
within the local community.
Identification of sources of finance
Once the project has been formulated, an important activity is the identification
of possible financing sources. In terms of external sources of finance, other
than the project proponent itself, the options for the SEE region include national
government sources; grants from the EC and/or bilateral donors; loans from commercial
banks and/or IFIs; and private sector involvement. The challenge here is
that local governments very often have limited knowledge of potential sources of
financing and lack understanding of their specific rules and requirements. Local
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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
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