EC approach towards financing infrastructure projects Dagmar KALJARIKOVÁ Policy Officer for Turkey, Montenegro, REC CEE and NGOs Unit for Enlargement and Neighbouring Countries European Commission – DG Environment PEIP meeting Brussels, 26 November 2007

EU Environment Policy – The Challenge Adoption of EU environment legislation is a major challenge: Legislative more than 270 pieces of legislation; 80 Major Directives Institutional strengthen administrative structures: ministries, agencies but also implementation and enforcement institutions improve intra-ministerial co-ordination environmental management in business needs attention Financial High estimates of compliance costs.

Financial challenge – how to address it Key issues to be considered: Compliance with the environment acquis Heavy investments Directives (UWWTD, DWD, Landfills, WFD, IPPC, LCP, etc.) EIA, Habitats and Birds Directives Strategic planning and prioritisation Approximation Strategies for Environment Financing Strategies for Environment Building capacity To define strategic documents To mobilise financial resources (attracting donors, national co-financing) To absorb financial assistance available (PPFs)

ENV Financing Strategies – EC approach EFS plays a number of important roles: Defines the projects needed to achieve compliance with specific directives Overall estimates for investments needed Cost estimates for specific projects Considers affordability issues Nationally For specific projects (focus on Operation & Maintenance costs) Proposes a credible time frame for implementation

ENV Financing Strategies – EC approach Preparation of EFS – process: Identification of key stakeholders Ministries, Agencies, National Funds, Regional and Local authorities (Ministry of Finance plays crucial role) Establishment of sectoral working groups Coordination amongst sectors Steps in the process Assessment of the existing situation Description of requirements and making presumptions (e.g. sensitive waters) Definition of measures needed and costs hereof Plan for investments and realistic financing (affordability criteria) Agreement of all relevant institutions

Financial challenge – EC assistance Priority ENV Investment Programme (PEIP) – support to SEE through CARDS: Identifying and prioritising investment infrastructure projects in line with EU acquis Developing a list of priority environmental projects Assistance in formulating bankable investment project proposals Facilitating dialogue with IFIs Facilitating exchange of expertise between SEE countries‘ experts

Financial challenge – EC assistance Further capacity building activities – support through Phare, CARDS, FI for Turkey or TAIEX: Environmental Heavy-Cost Investment Planning in Turkey – priority environment investments and DSPs http://www.cowiprojects.com/envest/index.htm Capacity building of environmental authorities through transfer of best practice and training to support effective use of financial resources (MCP Phare2005) – regional financing strategies in BG, RO & TK, national financing strategy for HR, analysis of affordability criteria website under development DABLAS Task Force – a platform for co-operation on financing of water related investments in the region http://ec.europa.eu/environment/enlarg/dablas/index_en.htm TAIEX – workshops, study visits and expertise http://taiex.ec.europa.eu/

Financial challenge – EC assistance Instrument for Pre-Accession (IPA): Component I Technical assistance available for the preparation of Approximation and Investment strategies for ENV Capacity building of the relevant institutions Infrastructure investments in potential CCs Component II Cross-Border Cooperation (CBC) Component III „Regional development“ (available only to CCs) Investments in the field of transport, ENVIRONMENT (OP ENV) and regional competitiveness Technical assistance for projects‘ preparation

Financial challenge – Involvement of IFIs and MSs Enhanced cooperation with IFIs – 2006 MoU signed by the Commission (ELARG and ECFIN) and IFIs (EIB, EBRD, IBRD & IFC, Nordic Investment Bank, CoEB, Black Sea Trade and Development Bank) IFIs Advisory Group established in March 2007 (replacement of Infrastructure Steering Group) in order to Advisory function on the coordination of investment projects in the region The scope of work extended beyond regional transport, energy and environment projects to cover sectors such as health, education, social issues, municipalities as well as Public Private Partnership Operational WGs Environmental principles signed by major IFIs – May 2006 http://www.eib.org/about/press/2006/2006-052-the-european-principles-for-the-environment-adopted-by-five-european-multilateral-financing-institutions-.htm Enhanced cooperation with MSs: Consultations with MSs on MIPDs for all countries REC CEE

Thank you for your attention!