ECE/BELGRADE.CONF/2007/INF/24
SIXTH MINISTERIAL CONFERENCE
“ENVIRONMENT FOR EUROPE”
BELGRADE, SERBIA
10-12 October 2007
PROJECT PREPARATION COMMITTEE REPORT TO THE SIXTH
MINISTERIAL CONFERENCE “ENVIRONMENT FOR EUROPE”
submitted by
the Project Preparation Committee
through the Ad Hoc Working Group of Senior Officials
BACKGROUND DOCUMENT
PPC Report
to the
Sixth Ministerial Conference
“Environment for Europe”
in Belgrade
Acronyms
ADB Asian Development Bank
BSIF Black Sea Investment Support Facility
CDM Clean Development Mechanism
CER Certified emission reduction
CIS-7 The seven low-income countries of the Commonwealth of Independent States DABLAS Danube and Black Sea Initiative
DISF Danube Investment Support Facility
EAP Environmental Action Programme for Central
and Eastern Europe, Caucasus and Central Asia EAR European Agency for Reconstruction
EBRD European Bank for Reconstruction
and Development
ECNC European Centre for Nature Conservation
EECCA Eastern Europe, Caucasus and Central Asia
EfE Environment for Europe
EIB European Investment Bank
EMS Environmental Management System
ENPI European Neighbourhood Partnership Instrument
EPPF Environmental Project Preparation Facility
ETC Early transition countries
ETCI Early Transition Countries Initiative
EUWI EU Water Initiative
GDP Gross domestic product
GEF Global Environment Facility
IFC International Finance Corporation
IFI International financial institution IPA Instrument for Pre-Accession
ISF Investment support facility
KIDSF Kozloduy International Decommissioning
Support Fund
MCCF Multilateral Carbon Credit Fund
MDG Millennium Development Goal
MCG Millennium Challenge Georgia Fund
NDEP Northern Dimension Environmental Partnership
NGO Non-governmental organisation
NIB Nordic Investment Bank
OECD Organisation for Economic Co-operation and Development
PEIP Priority Environmental Investment Programme
for South Eastern Europe
PPC Project Preparation Committee
PPP Public-private partnership
REC Regional Environmental Centre
SEE South-eastern Europe
SEI Sustainable Energy Initiative
TA Technical assistance
UNECE United Nations Economic Commission for Europe
WB World Bank
In the six years since the United Kingdom took on the chairmanship of the Project Preparation Committee (PPC) there have been significant changes in the region in which the PPC operates, and the emergence of a new set of challenges. Expansion of the European Union, accompanied by a shift in focus of the major international financial institutions to the east and south, have moved the PPC’s operations into areas with greater investment needs, but also to areas with more limited capacity to promote and pay for improved environmental services. This has been accompanied by a progressive decline in the scale of donor bilateral support for environmental programmes.
The PPC response to these challenges has been threefold. First, we have endeavoured to get closer to primary beneficiaries by appointing PPC Officers who are resident in the countries of operation. Secondly, we have increased our efforts to strengthen local capacity for project identification, prioritisation and preparation. Thirdly, we have deepened our partnerships with parallel initiatives and accessed new funding opportunities. All of this has only been achieved through the continuing generous support of a core group of donors. We will continue to focus our efforts on developing effective partnerships and building local capacity in ways that are responsive to the evolving needs of beneficiary countries, donors and international financial institutions. Subject to a renewed mandate, we aim to establish more secure institutional and financial arrangements to enable these activities to continue during the period following the Belgrade conference.
Rodney Matthews
UK Chairman
Preface
Executive Summary
1
Introduction
5
Background
5
Mandate
6
Organisation
6
PPC strategy 2004--07
7
Achievements since the Kiev conference
9
Supporting environmental investment projects
11
Environmental technical assistance projects
16
Project preparation facilities
17
PPC activities since Kiev
23
Project identification, preparation and financing
23
Coordination, matchmaking and networking
25
Sharing good practice and capacity building
30
Options for the PPC after Belgrade
35
The evolving context for environmental investments
in EECCA and SEE
35
Implications of the evolving context for the PPC
37
Findings of the 2006 PPC review
37
The PPC after the Belgrade Ministerial Conference
38
Annexes
Annex 1:
IFI Board approved investment projects
40
Annex 2:
IFI investment pipeline and TA projects
42
Contents
Investing in the
environment
Following the renewal of its mandate at the Kiev Ministerial Conference in 2003, the PPC has continued to mobilise financial resources for environment improvements, with a strengthened focus on the countries of Eastern Europe, Caucasus and Central Asia (EECCA) and South-eastern Europe (SEE). Donors have provided significant amounts of funding for PPC activities, including staff, project preparation facilities and capacity building activities. The placement of PPC Officers in countries of operation has enabled the PPC to work more closely with its country partners. Throughout this period the PPC’s activities have been guided by its 2004-07 strategy which comprises three pillars:
project identification, preparation and financing
coordination, matchmaking and networking
sharing good practice and capacity building.
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Achievements since
the Kiev conference
Since Kiev the PPC has assisted with the preparation of 37 environmental projects. Fifteen of these have been international financial institution (IFI) Board approved, at a total project cost of € 443 million, including 12 projects in EECCA and SEE (€ 277 million). The sectors supported by the PPC include municipal and environmental infrastructure, energy efficiency, renewable energy and emissions trading, environmental
mainstreaming and biodiversity. PPC involvement in these projects has taken different forms. Donor funded PPC Officers, focusing on specific sectoral themes and geographical regions, have provided significant support in the identification and preparation of projects. PPC staff have also helped to set up a number of dedicated technical assistance (TA) facilities at the European Bank for Reconstruction and Development (EBRD) for project preparation. Through its networking events and direct contact with donors, the PPC has continued to help in the mobilisation of donor funds and match grant finance with priority IFI projects.
The PPC has collaborated closely with other environmental initiatives, including the Task Force for the Implementation of the Environmental Action Programme for Central and Eastern Europe,
PPC supported projects in the region
2003--07
Croatia 1 Board approved Serbia 1 Board approved 2 Pipeline 1 TA Bulgaria 2 Board approved 1 Pipeline FYR Macedonia 2 Pipeline 1 TA Georgia 3 Board approved 6 Pipeline Uzbekistan1 Board approved Kyrgyz Republic 1 TA
Armenia 1 Board approved
Azerbaijan
1 Pipeline
Romania
1 Board approved Russia4 Board approved 3 Pipeline Bosnia and Herzegovina 1 Pipeline Tajikistan 1 Board approved 1 Pipeline Slovak Republic 1 Pipeline P P C R E P O R T E N V I R O N M E N T F O R E U R O P E B E L G R A D E 2 0 0 7
Caucasus and Central Asia (EAP Task Force), the Danube and Black Sea Initiative (DABLAS), the Northern Dimension Environmental Partnership (NDEP) and the EU Water Initiative (EUWI). Capacity building for environmental project identification and preparation has been a major new area of activity for the PPC, with the delivery of a programme of project financing workshops targeting municipalities and public utilities in EECCA and SEE.
The future of the
PPC after Belgrade
The context in which the PPC operates has evolved considerably since the Kiev Ministerial Conference. The shift in focus towards the east and south has raised a new set of challenges, especially in the lower-income countries of the Caucasus and Central Asia, and the Western Balkans. Bilateral donor assistance for the environment is progressively decreasing, and the EU is assuming a more prominent role as the leading donor in the region. Donors and IFIs have developed a range of
partnerships, such as DABLAS and the Early Transition Countries Initiative (ETCI), to coordinate their assistance programmes, which did not exist when the PPC was first established.
A review of the PPC carried out in summer 2006 demonstrated that while EECCA and SEE countries have a clear requirement for continuing assistance with environmental project preparation, this need must be addressed in a way that recognises the changing context in the region. Internalisation of the PPC’s functions within the EBRD may be the best way of ensuring that its activities can continue on a more sustainable basis than is possible with ad hoc donor support.
Meeting new
challenges
Environmental finance:
commitments made at Kiev
At the Kiev conference, Ministers agreed a number of goals for the future of the EfE process, including:
“To mobilize financial resources from all sources, inter alia, from governments, IFIs, donors and the private sector, to support the implementation of regional environmental instruments and sub-regional initiatives including capacity building”.
Background
The PPC was established in 1993 following decisions taken by Ministers at the Second Ministerial Conference “Environment for Europe” (EfE) in Lucerne, Switzerland. It has served as a mechanism for dialogue and coordination between IFIs, donors and beneficiary countries. It has worked to support the identification and development of environmental investment projects across the region, in a range of different environmental sub-sectors, playing a complementary role to its sister organisation under the EfE process, the EAP Task Force.
The PPC mandate was renewed at the EfE conferences in Sofia (1995), Århus (1998) and, most recently, in Kiev (2003).
At the Kiev Ministerial Conference the PPC reported that 219 projects had been subject to the PPC mechanism between 1998 and 2003. Sixty-nine of these projects, at an accumulated project cost of € 3,853 million, had been Board approved by IFIs at the time of the Kiev conference. These projects had benefited from financial support equal to € 1,895 million in IFI loans and € 904 million in donor grants.
Following the renewal of its mandate at the Kiev Ministerial Conference
in 2003, the PPC has continued to support environmental projects,
with a strengthened focus on the countries of EECCA and SEE. Close
cooperation with the EAP Task Force has been achieved through
joint annual meetings and a joint governing Bureau. Continued donor
support has enabled the PPC to place more PPC Officers in countries
of operation. During the period 2004--07, the PPC’s activities have
been guided by a strategy organised under three pillars: (i) project
identification, preparation and financing; (ii) coordination, matchmaking
and networking; and (iii) sharing good practice and capacity building.
Introduction
Mandate
Ministers at the Kiev conference recognised the need for a continuation of the PPC’s activities and requested that it concentrate its support in the countries of EECCA and the non-accession countries of SEE, and phase out its work in Central Europe by 2004. Ministers also asked the PPC to coordinate more closely with the EAP Task Force by holding joint annual meetings and establishing a common Bureau. It was also agreed that participation in both the PPC and the EAP Task Force should be open to a wider range of stakeholders including non-governmental
organisations (NGOs) and the private sector. Furthermore, the EBRD and the Organisation for Economic Co-operation and Development (OECD) should continue to provide support for the Secretariats of the PPC and EAP Task Force respectively.
Organisation
Since Kiev the PPC has operated as a network open to donor governments, IFIs, United Nations Economic Commission for Europe (UNECE) countries, international environmental programmes, the private sector, NGOs and other stakeholders. As agreed at Kiev, the PPC and EAP Task Force have received overall guidance from a common Bureau. This consists of representatives of donor and EECCA governments, and is co-chaired by the European Commission. The United Kingdom has continued to provide the PPC Chair, and the EBRD has continued to host the PPC Secretariat. Donors have supported six new PPC Officer/Consultant positions since 2003 and the two PPC Secretariat staff (see page 24 for full details of donor contributions to PPC staffing). The organisational arrangements of the PPC and its stakeholders are illustrated above.
In line with the recommendations of Ministers, the PPC has strengthened its staff presence in its countries of operation by creating PPC Officer positions based in EECCA and SEE countries as well as in IFI headquarters. Over the last four years PPC Officers have been located in EBRD Resident Offices in Belgrade, St. Petersburg, Tbilisi and Zagreb. The PPC has also explored alternative staffing arrangements including the recruitment of a PPC Consultant and locally hired PPC Officers.
P P C R E P O R T E N V I R O N M E N T F O R E U R O P E B E L G R A D E 2 0 0 7
PPC organisational
arrangements since
the Kiev conference
PPC stakeholders PPC staff and management
Bureau PPC Chair PPC Secretariat PPC Officers Donor governments IFIs NGOs Other stakeholders UNECE countries International environmental programmes Private sector
PPC strategy 2004--07
In 2004 a new four-year strategy was developed to put into practice the commitments made at Kiev. This was guided by three key documents:
the Declaration by the Environment Ministers of the region of the United Nations Economic Commission for Europe in Kiev, May 2003 the Environment Strategy for Countries of Eastern Europe, Caucasus and Central Asia (Strategic Framework) the Millennium Development Goals (MDGs), especially the water and sanitation targets encompassed within MDG VII.
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The strategy was developed through a consultative process involving a wide range of PPC stakeholders and was approved at the 2nd Joint Meeting of the EAP Task Force and PPC in Tbilisi, Georgia in October 2004. It is composed of three pillars: Pillar I: Project identification, preparation and financing
Working with IFIs to identify and prepare environmental investment projects.
Mobilising funds to support the preparation and implementation of projects.
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Pillar II: Coordination, matchmaking and networking
Working with stakeholders to enhance coordination and facilitate investment activities. Providing information on sources of finance and disseminating details of project financing needs. Pillar III: Sharing good practice and capacity building
Providing good practice materials and ad hoc advice.
Helping to build capacity in project identification, preparation and finance.
A brochure summarising the strategy was prepared in both English and Russian and was widely disseminated to PPC stakeholders and other interested parties. l l l l I N T R O D U C T I O N
PPC mechanisms and
the project cycle
PPC/EAP Task Force meetings Sector scoping Project concept Monitoring and evaluation Project implementation Project
preparation Inclusion in an IFI pipeline
Pre-feasibility
Development of local
consultancy capacity Support for IFI-managed project preparation municipalities for Support to project management Information hub PPC project financing workshops Mobilising finance sessions at PPC meetings
Supporting
environmental
Achievements since
the Kiev conference
The main focus of the PPC’s work has been to promote active coordination between its stakeholders to support the financing of environmental investment projects. This support has been delivered through a number of different approaches.
Donor funded PPC Officers have continued to enhance IFI project pipelines by assisting in the identification, preparation and financing of environmental investment projects.
The PPC Secretariat has helped to set up a number of donor funded project preparation facilities to provide TA to enable project development to proceed more quickly.
PPC networking events, including the annual joint meetings held with the EAP Task Force, have provided opportunities for donor funds to be matched with priority IFI investment projects.
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The projects supported by the PPC have been in the areas of municipal and environmental infrastructure (water supply and sanitation, solid waste management, district heating systems and municipal transport), energy efficiency, renewable energy and emissions trading, and nature conservation and biodiversity. This report assesses the PPC’s achievements by examining its support for: (i) the identification and preparation of environmental investment projects; (ii) stand-alone TA projects; and (iii) assistance in setting up donor funded project preparation facilities.
Since Kiev a total of 37 investment/ TA projects have been subject to the PPC mechanism. This is either through the direct involvement of a PPC Officer in the development of the project, or by receiving PPC facilitated support from a donor or IFI, or being presented to donors at a PPC meeting. Fifteen of these, at a total project cost of € 443 million, have been Board
Since Kiev the PPC has assisted with the preparation of
37 environmental projects, 15 of which have been IFI Board
approved at a total project cost of
e
443 million. In line with
Kiev commitments, most of these projects are in EECCA and
SEE countries. In addition to its traditional focus area of municipal
and environmental infrastructure, the PPC has expanded its
activities in the area of energy efficiency, renewable energy and
emissions trading, and biodiversity. A range of project support
mechanisms has been used, including direct support for investment
project development, facilitation of stand-alone TA projects, and
the establishment of TA facilities for project preparation and
credit lines.
0 P P C R E P O R T E N V I R O N M E N T F O R E U R O P E B E L G R A D E 2 0 0 7
approved by an IFI (see Annex I, page 40). These projects have benefited from financial support equivalent to € 260 million in IFI loans and € 127 million in donor grants, giving a loan to grant financing ratio of 2:1. The PPC has shifted the main focus of its operations towards EECCA and the non-accession countries of SEE, in line with the commitments made at the Kiev Ministerial Conference. Ten of the Board approved PPC facilitated projects were in the EECCA region (total project cost € 227 million) and, of these, six were in ETCs (total project cost € 58 million). A further two projects were in the non-accession countries of SEE (total project cost € 50 million) and the remaining three in EU accession countries, specifically Bulgaria and Romania (total project cost € 167 million).
In addition, 22 PPC supported projects have entered into IFI pipelines (specifically EBRD) since Kiev, at a total project cost of € 549 million (see Annex II, page 42). Thirteen of these were in EECCA (total project cost € 219 million), including 10 in ETCs (total project cost € 101 million). A further seven were in the non-accession countries of SEE (total project cost € 65 million) and two in EU accession countries (total project cost € 265 million). It is important to emphasise here that this report only covers projects where there has been PPC involvement and does not include the significant project activity being undertaken by IFIs and donors outside the PPC framework.
Fewer PPC supported projects have reached Board approval stage over the last four years as compared to previous reporting periods at Sofia, Århus and Kiev (see table on page 11). This is the result of the shift towards the more difficult environments of the EECCA region – especially the lower-income countries of the Caucasus and Central Asia – and non-accession countries of SEE. It is also a result of the reduction in the amount of pre-accession aid made available to EU accession countries, which was especially high during the period 1998-2003.
Total cost of Board approved
investment projects by region
Total cost of Board approved
investment projects by sector
e million 500 400 300 200 100 9.8% 3.3% 38.1% 11.3% 37.6% 100%
Caucasus Central Other Non- Accession Total Asia EECCA accession countries
(Russia) SEE
4 projects 2 projects 4 projects 2 projects 3 projects 15 projects
29.1%
1.4%
69.5%
Energy/ Transport Water supply/
heating sanitation
2 projects 1 project 12 projects
e million 350 300 250 200 150 100 50
Supporting
environmental
investment projects
Municipal and environmental
infrastructure
Municipal and environmental infrastructure has continued to be a major focus of the PPC’s work. The most dominant sector has been water supply and sanitation where 21 projects, including 12 Board approved, have received PPC assistance. Three transport projects have received PPC support, with one already Board approved, and a small number of solid waste management projects are also being developed.
Water supply and sanitation Access to safe water supplies and sanitation continues to be a major challenge in the PPC’s countries of operation, especially in the lower-income countries of the Caucasus and Central Asia where service coverage, quality and regularity are continually decreasing, in part due to the deterioration of outdated water and sanitation infrastructure. These problems are especially severe in smaller towns and in rural areas. Sustained and significant investment in water infrastructure is necessary for satisfactory progress to be made towards the MDG target of reducing by half the proportion of people without sustainable access to safe drinking water and basic sanitation
by 2015. The PPC has contributed towards tackling these challenges by supporting 12 IFI Board approved water and sanitation projects in eight countries, at a total project cost of € 308 million.
Key challenges in the water and sanitation sector include the identification of sufficient grant co-financing for capital expenditure to enable the investment to go ahead while maintaining the affordability of the water supply to the population. This is a particular challenge in lower-income countries and in smaller towns and rural areas where smaller investments are needed and where the ability to raise revenues through tariffs is limited.
Summary of IFI Board approved environmental projects with PPC involvement
Other (e.g. Total no.
Water Nature agriculture, of Board Total
Ministerial supply/ Waste Energy/ conservation/ transport, approved project IFI Donor
Conference sanitation management heating biodiversity industry ) projects cost loans grants Per region
(€ million ) (€ million ) (€ million )
Sofia 1995 8 12 4 2 7 26 1,200 n/a 80 EECCA 12%
SEE 11% EU Accession 77% Århus 1998 9 12 2 3 14 33 2,300 1,200 245 EECCA 30% SEE 24% EU Accession 46% Kiev 2003 37 8 13 4 11 69 3,853 1,895 904 EECCA 42% SEE 26% EU Accession 32% Belgrade 2007 12 0 2 0 1 15 443 260 127 EECCA 51% SEE 11% EU Accession 38% Total 4 , , , EECCA 4% SEE % EU Accession 4% A C H I E V E M E N T S S I N C E T H E K I E V C O N F E R E N C E
P P C R E P O R T E N V I R O N M E N T F O R E U R O P E B E L G R A D E 2 0 0 7
Through the work of a PPC Consultant, the PPC played a direct role in identifying and developing the Lake Sevan Environmental Project. This project is making a significant contribution to addressing the acute waste-water treatment problems in Armenia.
Lake Sevan is the country’s primary water resource and an important tourist and recreational attraction. A relatively large number of settlements are located around the lake. In the past, industrial and household waste water from these settlements was treated in small waste-water treatment plants before being discharged into rivers flowing into Lake Sevan. Over the past few decades most of this infrastructure has significantly deteriorated and a number of new waste-water treatment plants remain unfinished. Consequently, the lake suffers from significant water pollution that damages its ecological balance and natural beauty.
Through the active cooperation of the PPC, EBRD, Armenian State Committee for Water Systems, Armenian Water and Sewerage Company and other national bodies, an action plan to address these problems was developed. A number of waste-water treatment plants in need of urgent rehabilitation were identified. Since all these plants were relatively small, additional work was carried out to bundle them into a single project. Detailed project preparation work was undertaken, including a feasibility assessment and affordability analysis. The financing package developed for the project was tailored to reflect the concessionality requirement and affordability constraints. As a result, the €7.5 million EBRD loan was complemented
with a significant capital investment grant contribution (€5 million) from the EU, together with a €1.2 million
TA grant from the multi-donor ETC Fund. The loan agreement was signed with the Government of Armenia in April 2007.
Lake Sevan Environmental Project
A C H I E V E M E N T S S I N C E T H E K I E V C O N F E R E N C E
Archangelsk Municipal Water Services Project
Russia
The White, Kara and Barents seas surround the Russian region of Archangelsk and the region’s almost 70,000 rivers and streams carry waters into the Barents Sea basin. Despite its rich natural resources and its diversified industrial base, the region’s infrastructure has suffered from underinvestment, which has contributed to environmental and health concerns.
One of the region’s priorities is improving its capital city’s water and waste-water infrastructure. The Archangelsk Municipal Water Services Project is the region’s first step towards reaching Russian and EU environmental standards in the water and waste-water sector. The project includes an upgrade of the municipal water treatment facilities, rehabilitation of the water distribution networks, and the modernisation and extension of the waste-water network and collectors. In addition to improvements to the quality of potable water, the project will help to reduce water losses and energy consumption, and minimise the discharge
of untreated sewage into local rivers and the Barents Sea basin. It will also improve service standards and strengthen the operational and financial performance of the municipal water and waste-water services in Archangelsk.
The €25.3 million project is financed through an EBRD loan
of €10 million and is a priority project of the NDEP, which
has contributed a grant of €8.2 million. In addition, the EU,
Finland, Luxembourg, Sweden and the United Kingdom have provided funding for TA activities including the technical feasibility study, creditworthiness enhancement programme, environmental action plan, project implementation unit training and support, international project engineer and corporate development programme. PPC Officers located in St. Petersburg have been instrumental in developing this project and in mobilising donor finance.
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Khujand Water Supply Improvement Project
Tajikistan
PPC staff were involved in the design and structuring of a €3.98 million project to improve the water supply
infrastructure and distribution network in Khujand, Tajikistan’s second largest city. Signed in July 2004, this project, which included a loan of €0.93 million, was the
EBRD’s first municipal loan in Tajikistan, and the first under its ETCI, created to tackle poverty in the low-income countries of the Caucasus and Central Asia. The project aims to improve Khujand’s drinking water by installing new pumps and other equipment that should reduce water leakages and generally make the water supply more reliable.
Key elements of the project were supported by a grant from the Swiss government for capital investments and the provision of a stakeholder participation programme to encourage greater public participation and ensure that poverty and subsistence issues are reflected in tariff reforms. The Government of Norway funded a performance improvement programme for the Khujand Water Company and TA from the Government of Belgium supported the feasibility study during the preparatory phase.
Transport
The PPC has supported a small number of municipal transport projects. Improvements in this sector can result in significant environmental benefits as well as reducing congestion and improving energy efficiency.
Grant assistance from the EBRD’s ETC Fund and the Netherlands was critical in enabling a PPC supported municipal transport project in Tbilisi, Georgia, to go ahead (see above).
A C H I E V E M E N T S S I N C E T H E K I E V C O N F E R E N C E
City of Tbilisi Public Transport Project
Georgia
The PPC has supported a €6.4 million project to enable the
Tbilisi Bus Company to restore basic municipal bus services in the Georgian capital and give the residents of Tbilisi access to affordable transport. Georgia’s transport networks were disrupted by the conflicts and underinvestment that followed independence in 1991. At that time the Tbilisi Bus Company had 1,200 buses for the city’s 1.4 million people. By 2004 the fleet was down to 80 buses, with only half working on an average day.
The project, signed in 2005, included an EBRD loan of
€3.1 million, which enabled the city authorities to buy
182 second-hand buses, costing €15,000 each, one-tenth
of their value when new. People have low incomes in Tbilisi and these savings enabled the company to offer good services with affordable fares. The company was also able to expand the number of routes from 42 to 80, allowing buses to carry 18 per cent of Tbilisi’s passengers by 2007 against just 10 per cent in 2005. As the official bus service improves, fewer informal minibuses will be needed, thereby improving safety, traffic conditions and service quality.
Environmental technical
assistance projects
Biodiversity and environmental
mainstreaming
In addition to investment projects, the PPC has also helped to develop a number of stand-alone environmental TA projects, with donor support. Some of these were linked to EBRD investment projects in sectors such as power and energy and natural resources, as ‘add on’ environmental management components. For example, Canadian support was used to implement an Environmental Management System (EMS) at the electricity utility Elektrostopanstvo na Makedonija in FYR Macedonia, complementing an ongoing EBRD
investment project. A similar TA project was carried out with Elektro Privreda Srbije in Serbia, this time with support from the European Agency for Reconstruction (EAR). The PPC has also facilitated a number of stand-alone TA projects in the area of biodiversity and nature conservation through the work of the Luxembourg PPC Officer responsible for this sector. These include a TA project in the Kyrgyz Republic, funded by the United Kingdom and International Finance Corporation (IFC), to promote private sector involvement in biodiversity conservation activities and improve local livelihoods. The project is linked to an EBRD investment project in the adjacent Kumtor Gold Mine.
A pilot project on pro-biodiversity business in the steppe zone of the Eurasia region was agreed in 2006 between the EBRD and the EU. This project was designed to encourage micro and small businesses to support biodiversity. The project received support from the Tacis regional programme biodiversity component, which focuses on the steppe ecosystems covering parts of Kazakhstan, Moldova, Russia and Ukraine. The project aimed to establish an operating structure and procedures for identifying countries, regions and companies that show potential for, and interest in, creating pro-biodiversity businesses. The next
stage was the provision of TA to selected micro, small and medium-sized enterprises that use biodiversity resources and are willing to work towards creating pro-biodiversity businesses. TA was also used to develop a biodiversity monitoring system with key indicators and other benchmarks to evaluate the positive impact of investments on specific habitats and species.
Project preparation
facilities
In addition to providing direct support for project development, the PPC has indirectly supported numerous environmental investment projects by helping to set up a number of donor funded project preparation facilities within the EBRD. These TA facilities have been designed specifically to deal with particular difficulties related to the identification, preparation and implementation of environmental investment projects or groups of projects. An additional aim of these facilities was to support the development of local consultancy capacity, where possible.
A C H I E V E M E N T S S I N C E T H E K I E V C O N F E R E N C E
PPC support for launching biodiversity-related initiatives
within the EBRD
In 2004 the Government of Luxembourg provided funding for a PPC Officer to work on biodiversity related issues within the EBRD’s Environment and Sustainability Department. Preserving and protecting biodiversity is an important aspect of good environmental management. All EBRD financed projects are expected to include measures to safeguard and, where possible, enhance natural habitats and the biodiversity they support. The EBRD is also committed to supporting investments that specifically promote biodiversity.
The PPC support enabled the EBRD to work with the European Centre for Nature Conservation (ECNC) on biodiversity issues in its countries of operation. Together
with other organisations, including the European Investment Bank (EIB) and Rabobank, the EBRD participated in the European Task Force on Banking, Business and Biodiversity, through which potential biodiversity financing mechanisms and the establishment of a European Biodiversity Finance Facility were explored.
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Municipal and environmental
infrastructure facilities
Two project preparation facilities have provided rapid technical support to assist the development of a range of municipal and environmental infrastructure projects. A € 133,000 District Heating Support Facility, financed by the United Kingdom, has been used to support feasibility studies and specialised advisory inputs for EBRD district heating investment
projects in a number of countries including Russia and Uzbekistan. Similarly, a € 600,000 Municipal and Environmental Infrastructure Technical Cooperation Facility was set up in 2004 with Austrian funding, to support municipal infrastructure projects in Russia and SEE.
A C H I E V E M E N T S S I N C E T H E K I E V C O N F E R E N C E
Energy efficiency,
renewable energy and
emissions trading
Energy efficiency, renewable energy and emissions trading have been a major focus of the PPC’s work since Kiev, with a specially dedicated PPC Officer, funded by Luxembourg and the Netherlands, working in this area. This reflects the growing international interest in energy efficiency, driven by concerns over climate change and energy security in the European neighbourhood region. The main way in which the PPC has supported investments in these areas has been through the establishment of donor funded TA facilities and credit lines to support EBRD energy efficiency investments, and to enable such investments to benefit from carbon financing opportunities.
The Kyoto Protocol sets binding targets on industrialised countries for the reduction of greenhouse gas emissions. Under the Protocol, specific mechanisms were created to trade project–based carbon credits. The carbon credit idea is simple: a project investment leads to greenhouse gas emission reductions compared to a baseline. That emission reduction performance, having been monitored and certified, can then be sold to countries and companies
with a shortage of rights to emit greenhouse gases. Sponsors of energy saving projects are able to sell the project’s certified emission reductions (CER), commonly referred to as carbon credits. One carbon credit is equivalent to one tonne of CO2
emission reductions.
There is a large potential market for project-based credits originating from the countries covered by the PPC. Given that most EU-15 states, plus Canada and Japan, will need to buy carbon credits to meet their Kyoto targets, this market is expected to grow. The eligible countries have a high potential for generating carbon credits for the following reasons.
Several of these countries have a surplus of carbon credits. This is because the Kyoto Protocol reference year for the emission reduction targets is 1990. Since then emissions have dropped sharply in countries such as Russia and Ukraine, as a result of the substantial contraction of their gross domestic product (GDP) caused by the closure of state industries after 1990. These countries are therefore likely to be sellers of carbon credits.
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High carbon and energy intensities in countries in transition also create significant opportunities for low-cost emission reductions. This is because the cost of achieving an emission reduction in such countries is low relative to Western countries whose economies are much more energy efficient and generally less carbon intensive, and are thus characterised by a higher relative carbon abatement cost.
The emerging carbon credit market fits well with the PPC’s mandate. This has potential benefits for PPC stakeholders:
using the additional revenue from selling carbon credits to finance more and/or more risky “climate-friendly” projects, such as energy efficiency, renewable energy, fuel switching, landfill and biogas (waste water), etc.
assisting with the development in its countries of operation of such market-based mechanisms for environmental protection and transition.
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The PPC has been instrumental in helping to set up a number of donor funded TA facilities
at the EBRD to support municipal and environmental infrastructure projects and energy
efficiency investments.
Clean Development Mechanism facilities
One of the financing mechanisms established under the Kyoto Protocol is the Clean Development Mechanism (CDM). This allows industrialised countries to invest in emission reducing projects in developing countries as an alternative to what is generally considered more costly emission reductions in their own countries.
Through funding provided by the Dutch government (€ 90,000) and the ETC Fund (€ 350,000), two TA facilities were set up at the EBRD to enable energy saving projects to benefit from CDM financing. The CDM in Caucasus and Central Asia Facility and the CDM Project Support Facility for Early Transition Countries have been used to reduce barriers to the development and implementation of CDM projects and develop carbon financing components in EBRD investment projects in the areas of power and energy, and industry (see table above).
EBRD investment projects supported by CDM facilities in the Caucasus and Central Asia
Total Project
Project Location project cost status Project summary (€ million )
Bazenc Mini-Hydro Armenia 1.18 Board This mini-hydro project in Armenia was identified during a survey for
Power Plant approved CDM projects. The Netherlands provided support for the CDM baseline
and validation studies, and the project is expected to have a strong demonstration effect for further mini-hydro projects. The loan is being provided through the EBRD’s Direct Lending Facility, which is designed to provide small loans.
Armenia Renewable Armenia 11.15 Board Loan to a financial intermediary which will invest in renewable energy projects,
Energy Programme approved primarily mini-hydros. A PPC Officer contributed to a TA component that will
(Cascade Credit) enable the monetisation of carbon emissions in individual projects.
Rehabilitation Azerbaijan 95.51 Board Investment into the rehabilitation of the major generation station and selected
of AzDRES approved transmission facilities with the aim of improving the reliability and efficiency of
Power Plant the power system. PPC staff assisted in the development of the energy efficiency
and fuel-switch project as a CDM project.
Energy efficiency and renewable energy credit lines PPC staff have assisted the EBRD in establishing a credit line facility of € 105 million for six Bulgarian financial intermediaries to provide loans to sub-borrowers for industrial energy efficiency and renewable energy projects. This credit line has been supplemented with a € 34 million grant from the Kozloduy International Decommissioning Support Fund (KIDSF). Over 98 projects are currently being financed under the facility, of which 50 are fully operational, and there is a strong pipeline of over 100 projects. The PPC has also played a pivotal role in initiating a similar credit line in the Slovak Republic, which is currently under development.
Other carbon financing mechanisms The PPC has played a key role in helping to set up the € 165 million Multilateral Carbon Credit Fund (MCCF). The EBRD and the EIB established the MCCF as a key instrument in their strategy for combating climate change. It is designed to develop the carbon market in countries in transition to market economies by helping EBRD and EIB shareholders and other parties to meet their mandatory or voluntary greenhouse gas emission reduction targets. The Fund sources and purchases carbon credits from projects financed by the EBRD and/or EIB in countries in transition eligible for EBRD operations.
Examples of projects that generate carbon credits include:
switching fuel from coal/mazut (a highly polluting energy source) to natural gas
renewable energy energy efficiency waste to energy
avoidance of gas flaring/venting forestry.
The MCCF also facilitates Green Investment Schemes in which the proceeds of state-to-state trading of carbon credits are used to finance climate friendly projects in the selling country. It also aims to stimulate and complement the participation of the private sector in the carbon market.
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PPC support for the Sustainable Energy Initiative
The work of the PPC on energy efficiency, renewable energy and carbon trading has contributed to the development of the EBRD’s Sustainable Energy Initiative (SEI), which was launched in May 2006 and is intended to help the EBRD to:
scale up its sustainable energy investments by more than doubling those in energy efficiency and cleaner energy to €1.5 billion between 2006 and 2008
strengthen its capacity to deliver, through internal organisational changes that mainstream energy efficiency objectives throughout the EBRD with team-by-team
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targets and enhanced specialised support from a cross-cutting energy efficiency and climate change team work with other multilateral development banks, international organisations and local bodies to enhance the impact of its policy dialogue and share best practice establish a new partnership with donors to access the grant funds required to scale up structured financing packages of commercial finance combined with grant funds for capacity building and incentives.
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Building
partnerships for
the environment
Under the framework of its 2004--07 strategy, the PPC has supported
project preparation and financing through the deployment of donor
funded PPC Officers inside EBRD banking teams, focusing on specific
sectoral themes and geographical regions. Coordination with donors
has facilitated the matching of donor grants with priority IFI projects.
The PPC has also worked closely with other environmental initiatives,
including the EAP Task Force, DABLAS, NDEP and the EUWI. A
major new area of work has been providing assistance to develop local
capacity for project identification and preparation. This has included
the delivery of a programme of project financing workshops targeting
municipalities and public utilities in EECCA and SEE.
Since 2004 the work of the PPC has been organised under three pillars:
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project identification, preparation and financing
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coordination, matchmaking and networking
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sharing good practice and capacity building.
Project identification,
preparation and
financing
PPC Officers working
inside IFI teams
Through the PPC mechanism, donors have provided funding for six new PPC Officer positions at the EBRD since 2003 (see table on page 24). These officers have played catalytic roles within the Municipal and Environmental Infrastructure Team, the Energy Efficiency and Climate Change Team and the Environment and Sustainability Department by contributing to the identification and development of a wide range of projects in municipal and environmental infrastructure, energy efficiency, renewable energy
and emissions trading, biodiversity and environmental mainstreaming. Donors have also continued to support the two positions in the PPC Secretariat, which plays a central role within the EBRD’s Environment and Sustainability Department in coordinating the activities of the PPC. The PPC has also explored innovative arrangements for enabling donors to contribute to project preparation, in response to the needs of different stakeholders. For example, during 2005-07 the EU contributed €196,000 to fund a PPC Consultant to work with the EBRD on water and sanitation projects in the ETCs. More recently, the PPC has attempted to recruit in-country staff to take advantage of local knowledge and expertise, including knowledge of local languages.
The PPC’s work in the development of environmental projects has generated some important lessons regarding the specific challenges related to the preparation of
environmental infrastructure projects in EECCA and SEE countries. These vary across the different sub-regions in which the PPC has been active. Early transition countries
The main challenge in the ETCs is to provide substantial infrastructure investment financing for urgently needed improvements in the quality of services, and in the operational and financial management of utilities, within tight affordability constraints. As a result, almost all municipal infrastructure projects in the ETCs require significant grant funded components. The PPC has devoted a substantial amount of time and effort in identifying sources of grant financing for projects in the ETCs, either in the form of TA or capital expenditure grants. Such
concessionality helps to address affordability constraints and limited local financial revenues. On the other hand, excessive use of grant financing could erode the incentives for operating financially sustainable utilities that achieve cost recovery and are locally managed. Therefore the optimal combination of loan and grant financing must be identified for each project. While recognising affordability constraints and the need to address the needs of the poor, it is important to acknowledge that the only long-term sustainable model for service delivery is full cost recovery. All project implementation plans should therefore be based on adjusting tariffs to allow full cost recovery, with the tariff adjustment strategy fitted to expected changes in income levels and other income related assistance and subsidy programmes.
South-eastern Europe
Project implementation can be lengthy due to a lack of experience in project management and procurement and scarce engineering and management skills. Conflicts of interest between project partners (for example financiers, investors, donors, public utilities, local governments, regional administrations and national ministries) can be avoided by clearly setting out roles and tasks in project documents. Institutional weaknesses may also be a problem in some SEE countries where local government reforms have only recently been introduced. Affordability of services is a key issue and tariff and subsidy policies must ensure that services are sustainable and operated on a cost recovery basis and that they are provided to all, particularly the poor.
Donor support for PPC staffing positions during 2003--07
Donor Contribution Sector supported
Finland €690,900 Municipal and environmental infrastructure projects in North-west Russia
Italy €300,000 Municipal and environmental infrastructure projects in SEE
Luxembourg €75,582 Energy projects
€228,624 Environmental additions to pipeline projects, and stand-alone environmental projects, particularly in the biodiversity sector
Netherlands €456,994 Energy projects, especially related to energy efficiency, renewables and emissions trading
Sweden €432,959 Municipal and environmental infrastructure projects in ETCs
Switzerland €54,012 PPC Secretariat
United Kingdom €584,733 PPC Secretariat
Coordination,
matchmaking and
networking
The PPC has continued to work with its stakeholders to:
enhance the coordination of environmental investment activities
provide information on sources of finance
disseminate details of project financing needs.
Working with donors to
identify funds for TA and
co-financing
The mobilisation of TA funds and donor grant co-financing of IFI investments has been central to the PPC’s activities. This has been achieved by PPC Officers helping to address the financing gaps in project development, and through the networking and information sharing activities led by the PPC Secretariat.
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The annual joint meetings of the EAP Task Force and the PPC, held in Paris (2003), Tbilisi (2004), Yerevan (2005), Berlin (2006) and Brussels (2007), have served as important opportunities for bringing together donor and IFI representatives, and have included sessions on mobilising finance in which potential projects have been presented to donors for their consideration.
In response to stakeholder demands, the PPC undertook a review of environmental grant financing in the EECCA and SEE regions in 2004-05. The objective of the study, funded by the United Kingdom, was to produce a web-based guide to financing flows and mechanisms in the region. This provided a better understanding of the volume and availability of resources and helped to facilitate matchmaking between funds and proponents. A follow-up study in 2007, again funded by the United Kingdom, concentrated on donor and IFI support for environmental investment
P P C A C T I V I T I E S S I N C E K I E V
PPC Consultant in the early transition countries
During 2005--07 the EU supported the PPC by providing funding for a one-year PPC Consultant position working in the ETCs. In contrast with traditional PPC Officer positions, the consultant focused on project development in one particular sector, in this case water supply and sanitation. This arrangement helped to ensure greater specialisation and closer networking relationships with relevant stakeholders, which in turn improved the speed and efficiency of project preparation.
The PPC Consultant worked in close cooperation with the EBRD’s Municipal and Environmental Infrastructure Team, national water authorities, EU Water Investment Support Facility team, feasibility study teams, local water operators and municipalities. Through this assignment a number of project ideas were identified and developed, including the Lake Sevan Environmental Project in Armenia.
projects in EECCA and SEE. The study complemented recent work carried out by the EAP Task Force and the Regional Environmental Centre (REC) for Central and Eastern Europe on overall environmental financing trends. The main output of this study was a new database on the PPC web site providing information on donor/IFI support for environmental investments.
Working with the
EAP Task Force
Enhanced cooperation with the EAP Task Force has been an important objective of the PPC. Ministers at Kiev decided that the two organisations should work more closely together, including holding joint annual meetings and reporting to a common Bureau. Following Kiev, the EAP Task Force and the PPC assumed joint responsibility for Objective 5 of the EECCA strategy (environmental financing), with the EAP Task Force acting as facilitator and the PPC as
a cooperating institution. The areas identified for cooperation were:
improving the policy and institutional environment for environmental financing supporting more strategic use of EECCA financial resources increasing capacity for project identification, preparation and implementation
strengthening dialogue and creating more realistic expectations between EECCA countries, donors and IFIs. At the 2nd Joint Meeting of the EAP Task Force and the PPC (Tbilisi, October 2004) a programme of cooperation was agreed. The objectives of this programme were to ensure that lessons learned at the policy and institutional level through the work of the EAP Task Force were reflected in the project-level work of the PPC and vice versa. Its aim was also to ensure the effective dissemination of lessons learned among stakeholders in the
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EfE process, and to prevent overlaps in the work programmes of the two organisations. Since then, the PPC and EAP Task Force have worked together closely to implement this programme of cooperation through:
annual joint meetings (Paris 2003, Tbilisi 2004, Yerevan 2005, Berlin 2006, and Brussels 2007)
regular meetings of the joint Bureau
policy dialogue on environmental financing issues
operational coordination such as the planning of workshops and training events
information sharing and communication activities, including joint newsletters and the coordination of web site information. l l l l l P P C R E P O R T E N V I R O N M E N T F O R E U R O P E B E L G R A D E 2 0 0 7
Trends in donor support for environmental investments in EECCA and SEE
Since 2003 the main focus of IFI support for the
environment has been in the form of direct loans for specific investment projects. This has begun to be complemented by a wider range of instruments, including lending through intermediaries, use of guarantees and equity. Donor funded TA in support of environmental investments has been a key strategic element of IFI environmental activities. The main sectoral focus of such support has been on water and sanitation, water resources, and energy efficiency and
renewable energy. Carbon financing has been a major new area of activity in recent years. As this approach has been in its inception phase in many countries, significant institutional backing, often in the form of donor grants, has been necessary. Full details of the review of donor and IFI support for environmental investments are available on the PPC web site (www.ppcenvironment.org).
Cooperation with other
regional initiatives
The PPC has also worked closely with a number of other regional initiatives active in the field of environmental financing in EECCA and SEE.
Danube and Black Sea Initiative The EC’s DABLAS initiative was established in 2001 with the aim of providing a platform for cooperation for the protection of water and water related ecosystems in the Danube and Black Sea Region. The PPC has supported the initiative since its inception. More specifically, since Kiev, the PPC has collaborated with DABLAS by advising on its work programmes, participating in its annual Task Force and
Implementation Working Group meetings and providing information on PPC projects that feature in the DABLAS pipeline. The Italian funded PPC Officer covering the Western Balkans was specifically tasked to coordinate with the DABLAS Task Force. In addition, the PPC Secretariat assisted with the recruitment of the EU funded Black Sea Project Broker working with the DABLAS initiative. A former PPC Officer was selected for the position.
P P C A C T I V I T I E S S I N C E K I E V
PPC collaboration with the EU’s investment support facilities
In recent years the EU has provided support for environmental investments, especially in the water and waste-water sectors, through dedicated investment support facilities (ISFs). These are designed to provide TA to IFIs for project preparation and the mobilisation of investment. They are based on the model of the former Joint Environment Programme. To date, there have been four ISFs with different geographical and thematic coverage, and the EU has indicated that it may develop further ISFs elsewhere in the region in the future:
the Black Sea Investment Support Facility (BSIF), covering water and waste-water investments in the countries bordering the Black Sea
the Danube Investment Support Facility (DISF), focusing on water and waste-water sector investments in the non-EU countries of the Danube Basin
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the Water Investment Support Facility (WISF), covering the countries of the former Soviet Union, especially the seven low-income countries of the Commonwealth of Independent States (CIS-7).
the Environmental Project Preparation Facility (EPPF), covering a broader range of environmentally beneficial investments in the Western Balkans.
The PPC has worked with a number of the ISFs to support water and waste-water sector projects. For example, the Lake Sevan Environmental Project in Armenia has benefited from a feasibility study carried out by the WISF. The BSIF has provided TA for a number of PPC supported projects in Georgia, including the Kutaisi Water Supply Improvement Project, the Poti Water Supply Project and the Adjara Solid Waste Management Project. In the Western Balkans, the DISF has provided TA for the Karlovac Water Supply and Sewerage Project.
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EU Water Initiative
The PPC supports the EECCA component of the EUWI, which was launched in 2002 to help meet the challenges of the water related MDGs. Specifically, the PPC has participated in meetings, made presentations on its activities, and ensured an effective exchange of information. The PPC Consultant and Officer based in Tbilisi were both tasked with building on EUWI EECCA priority projects, where possible, as part of their work on municipal and environmental infrastructure projects in the ETCs. The Lake Sevan Environmental Project in Armenia is an example of PPC cooperation with the EUWI. The feasibility study for the project was financed and implemented by the EU WISF, and the project was subsequently co-financed with a €5 million grant from the EU Water Co-Financing Facility. The PPC has also collaborated with a number of the EU’s investment support facilities that were set up under the auspices of DABLAS and the EUWI (see page 27).
Northern Dimension Environmental Partnership
The NDEP was established in 2001 as an innovative, international response to pressing environmental problems in North-west Russia, combining the expertise and resources of a number of donors (Belgium, Canada, Denmark, EU, Finland, France, Germany, Netherlands, Norway, Russia, Sweden, United Kingdom), and IFIs (EBRD, EIB, Nordic Investment Bank (NIB), World Bank) in designing and implementing a pipeline of projects in water, waste water, solid waste, energy efficiency and nuclear waste management. The PPC has continued to work with the NDEP non-nuclear window to mobilise funds to finance priority projects. During the last four years Finland has provided funding for two successive PPC Officers based in the EBRD Resident Office in St. Petersburg, who have supported a number of projects that have benefited from NDEP grant funding (see table above).
Early Transition Countries Initiative The ETCI was established in 2004 by the EBRD in partnership with a number of donors (Canada, Finland, Ireland, Japan, Luxembourg,
Netherlands, Norway, Spain, Sweden, Switzerland, Taipei China, United Kingdom), with the objective of enabling the EBRD to increase its impact, reach and volume of transactions in the seven poorest EECCA countries (Armenia,
Azerbaijan, Georgia, Kyrgyz Republic, Moldova, Tajikistan, Uzbekistan). In 2006 Mongolia became the eighth country eligible under the ETCI.
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Board approved NDEP projects supported by the PPC (2003--07)
Project Location IFI Project cost IFI loan NDEP grant
(€ million ) (€ million ) (€ million )
Archangelsk Municipal Russia EBRD 25.29 10.0 8.2
Water Services Project
Komi Municipal Services Russia EBRD 21.14 10.0 3.72
Improvement Project – Syktyvkar
St. Petersburg Northern Russia EBRD 108.0 EBRD 42.85 6.35
Waste-water Treatment EIB EIB 20.0
PPC supported projects benefiting from ETC Fund TA (2003--07)
Project Location Project cost EBRD loan ETC TA
(€ million ) (€ million ) (€ million )
Lake Sevan Environmental Project Armenia 14.6 7.5 1.2
City of Tbilisi Public Transport Project Georgia 6.38 3.1 0.81
Kutaisi Water Supply Improvement Project Georgia 11.92 3.0 0.53
Poti Water Supply Project Georgia 10.45 2.5 0.48
P P C A C T I V I T I E S S I N C E K I E V
The initiative is based on three pillars: the EBRD’s readiness to take on more risk in these countries, while respecting sound banking principles
the EBRD’s commitment to increase its dedicated resources (staff and budget) at headquarters and in Resident Offices
more efficient and deeper support from the donor community in terms of joint TA and grant co-financing of EBRD led programmes and projects.
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The PPC has supported the ETCI through the appointment of an EU funded PPC Consultant and a Swedish funded PPC Officer to work on the identification and preparation of municipal and environmental infrastructure projects in the ETCs. A number of PPC facilitated Board approved projects have benefited from TA provided through the ETC Fund, as shown in the table below.
Regional Environmental Centres The PPC has continued to collaborate with the RECs in the region. For example, the PPC has supported the REC for Central and Eastern Europe in developing the Priority Environmental Investment Programme for South Eastern Europe (PEIP), and provided assistance with training events such as the REC-CEE Workshop on Water Sector Investment Projects in Belgrade, Serbia in November 2004.
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Networking tools
The PPC has used a number of networking tools to disseminate information and promote coordination and matchmaking.
PPC web site
A new PPC web site was launched in 2004 to provide an information portal for PPC stakeholders (www.ppcenvironment.org). The web site is available in both English and Russian, and provides a range of resources and information, including:
a database of environmental financing sources
a project database with details of all projects being supported by the PPC
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a range of good practice documents
links to documents on the EAP Task Force web site.
PPC newsletters
Newsletters are prepared jointly with the EAP Task Force and circulated to members of the PPC and EAP Task Force networks approximately every six months.
Stakeholder meetings
The PPC makes use of the annual joint meetings of the EAP Task Force and the PPC to present information on activities and project financing needs to donor representatives and other members of the PPC network.
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Sharing good practice
and capacity building
Project financing workshops
One of the major themes of the PPC’s post-Kiev strategy was the development of local capacity for project identification and preparation. The lack of such capacity was
identified as one of the major obstacles to the financing of environmental improvements in EECCA and SEE countries. The PPC’s own experience has shown that one of the best ways of ensuring that municipal entities are able to attract co-financing for their priority investment projects is to help build their capacity to develop sound project concepts. In response to this need, the PPC has developed and delivered a programme of project financing workshops aimed at building capacity for project identification, preparation and financing skills in EECCA and SEE countries.
The PPC web site provides a source of information on financing opportunities,
project activities and good practice.
P P C A C T I V I T I E S S I N C E K I E V
The workshop programme was developed during 2003-05 with funding from the United Kingdom. Work completed during this phase included the design of the workshop content and format and the
development of the workshop training materials. Extensive consultation was carried out with IFIs and other stakeholders to ensure that the workshops met their needs as much as possible. A pilot workshop took place in Moscow in July 2004 and introductory seminars were held at the REC-CEE Workshop on Water Sector Investment Projects in Belgrade, Serbia in November 2004, at the 4th DABLAS Task Force meeting in Karlovac, Croatia in June 2005, and at the 3rd Joint Meeting of the EAP Task Force and PPC in Yerevan, Armenia in November 2005.
The overall purpose of the project financing workshops is to assist municipal project proponents to enter into a constructive dialogue with IFIs, donors and/or commercial banks about their project ideas. The main focus is on municipal, environmentally oriented, financially viable, stand-alone investment projects for which project proponents are seeking co-financing from IFIs, donors and/or commercial banks. The primary target group of the workshops are municipal-level investment project proponents, for example municipal authorities and public utilities. The workshops aim to equip participants with the necessary tools to prepare project concepts on their own, ready for submission to potential co-financiers. The intended goal is to reduce the time needed to initiate and prepare a project
concept, and to facilitate and enhance communication between project proponents and financial institutions. The implementation phase of the programme commenced in spring 2006. Following interest expressed by a number of stakeholders in hosting these workshops, the programme has now been delivered in Georgia (July 2006), Volgograd, Russia (December 2006), FYR Macedonia (May 2007) and Ukraine (May 2007). Funding has been provided by the United Kingdom (€ 56,000) and Germany (€ 12,000 for the Ukraine workshop).
