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
governments are often dependent on guidance and permission from national authorities
to access sources of financing, and this can be hampered by political and
communication issues. Lack of understanding of the priorities and requirements of
external sources of finance results in local governments being unable to communicate
their investment projects effectively in the terms required to attract financing,
and being unable to prepare the documentation required to access it.
General observations
• Local politicians struggle with a multitude of competing funding priorities:
those that are more visible and tangible than environmental priorities may end
up higher on the political agenda.
• There is a mismatch between the obligations imposed on municipalities as a
result of the decentralisation process, and the financial and human resources
capacities at their disposal to manage these obligations.
• Many local governments lack an understanding of environmental infrastructure
investments in the context of a market economy, including issues of social
affordability, cost recovery, depreciation and the appropriate use of subsidies.
• Local governments and their associated bodies generally lack adequate skills to
prepare investment projects and to oversee and cooperate with expert consultants
in the preparation of their environmental investment projects. They often
have a limited knowledge of possible sources of financing, and lack understanding
of their specific rules and requirements.
• Water and waste utilities in SEE are highly fragmented and cooperation between
municipalities is poor. At the same time, there are (and will be) economic
pressures for economies of scale.