Progress on developing, preparing and financing environmental investment projects REPUBLIC OF MACEDONIA

Position of Macedonian EIP in PEIP In 2003, Republic of Macedonia presented 31 projects on the PEIP list of the priority infrastructure investment projects. According to the PEIP list of the priority infrastructure investment projects, in 2005 Republic of Macedonia has submitted 18 projects: 13 in the water sector 3 in the air sector 2 in the waste sector

Key issues of presentation: Brief presentation of main changes in legal an organizational structures (since January 2006) Key highlights of progress in financing EIP Key highlights of any new domestic financial mechanisms which support EIP Key challenges and aims for the next 6 months for implementing priority EIP

Brief presentation of main changes in legal an organizational structures (since January 2006) Amendments to the Law on Environment, Law on Ambient Air Quality, Law on Waste Management and Law on Nature Protection 2007 concern the section on penalty provisions Draft Law on Waters - to be adopted until end of 2007 Several rulebooks concerning the implementation of the EIA and IPPC procedure, ambient air quality, waste management, nature protection have been adopted Law on Investment Funds is under preparation (MF)

Organizational structures MEPP: Administering the project pipeline; Coordination with the European Commission as well as other potential donors; The new organizational set-up of the minitry was adopted (Administration for Environment, Department for Investment and IPA unit were established). Ministry of Finance: Central Financial and Contracting Department (CFCD) and National Fund were established. LSGs: Initial trainings on implementation and promotion of projects in line with the IPA policy, including co- financing of project preparation, commitment to increase user charges required for recovery of implementation costs and establishment of inter-municipal cooperation in implementing projects on a regional scale

Key highlights of progress in financing EIP 1.FS - Wastewater Treatment System for the City of Skopje (JICA) 2.FS - Wastewater Treatment System for Prilep (CARDS 2006) 3.FS – Regional integrated waste management for Skopje region (national budget) 4.FS – Regional integrated waste management for Polog region (national budget) 5.Environmental investment program for 2006 and MOEPP 6.Program for water supply 2006 and 2007 – MTC 7.Water Program – Swiss Government ( )

Key highlights of any new domestic financial mechanisms which support EIP EU (IPA) funds for investment in environmental infrastructure require substantial co-financing from other sources (co-financing of around 30 percent of total project costs is to be expected). Recognized co-financing sources: –National budget funds –Loan to government –Local budgetary funds –Loan to municipality –Retained earnings of existing utility company –Loan to utility company –Private sector (as a part of a public-private partnership arrangement) –Carbon financing

Key challenges and aims for the next 6 months for implementing priority EIP Preparation of first draft of National Environmental Investment strategy Adoption of National Waste Management Strategy and NWMP Development of technical documentation for regional integrated waste management Institutional strengthening of MoEPP and LSG Adoption of Law on Waters Acreditation od DIS (IPA)

Expecting form and amount of financial and technical assistance needed FINANCIAL ASSISTANCE AMOUNT : For all 18 projects submitted on the PEIP list, the financial assistance needed is 246 million EUR. FORM: Grant and national co- financing TECHNICAL ASSISTANCE FORM: For some of the projects technical assistance is needed (preparation of detailed feasibility study and engineering design). AMOUNT: Not precise, because most of the project proponents will contribute with own sources in preparation of technical documentation.

Thank you! Kaja Sukova Head of Department for Sustainable Development and Investments Ministry of Environment and Physical Planning Republic of Macedonia