1. Introduction

Background

In April 1991, the Act on Subsidies for Environmental Activities in Eastern European Countries was adopted by the Danish Parliament and the Danish Environmental Support Fund for Eastern Europe (DESF) was established.

DESF

In 1993, the Danish Environmental Support Fund was incorporated into the new Environment and Disaster Relief Facility (EDRF), a new Danish programme for support to environment and disaster areas. The point of departure was the implementation of the decision to use an increasing amount of funds to support environmental and disaster issues.

Subsequently, the "Strategy for Environmental Activities in Eastern Europe" was drawn up and has since been the basis for environmental assistance in Eastern Europe. The DESF is administered by the Danish Environmental Protection Agency (DEPA), an agency within the Danish Ministry of Environment and Energy.

Danish assistance

Since the enactment in 1991 and the announcement of the Government Order regarding financial support to these activities, the Danish Environmental Protection Agency has provided financial support to some 500 environmental projects at a total amount of DKK 1.2 billion.

In each individual country, a co-operation agreement and a country programme has been drawn up. Denmark co-operates in the environmental field with 12 Eastern European countries, including countries in the former Soviet Union. Danish environmental assistance and environmentally related assistance are primarily targeted at the Central and Eastern European countries which are situated close to Denmark, including Poland, the Baltic States and the Baltic areas of Russia.

In 1998, the DESF facility amounts to DKK 411 million, administered by the DEPA. Within the DESF framework, the Danish National Forest and Nature Agency is responsible for biodiversity and sustainable forestry projects.

In addition to the DESF facility, DKK 141 million is allocated to sector integrated environmental assistance administered by a number of appropriate ministries and agencies. The Danish Energy Agency within the Ministry of Environment and Energy holds DKK 62 million from this arrangement for activities such as energy efficiency etc.

As part of the Danish bilateral environmental activities in Eastern Europe and therefore of the above-mentioned EDRF, the Green Investment Facility under the Investment Fund for Central and Eastern Europe (the IØ Fund) will, in 1998, have DKK 70 million additional to the amount of DKK 259 million allocated during 1995 to 1997. Furthermore, a new environmental soft loan scheme will be available as a special facility under the Export Credit Facility. A sum of DKK 45 million will soften environmental loans in the magnitude of DKK 145 million for Central and Eastern Europe.

Application v. tender

Originally, the DESF required an application from a partnership between a Danish applicant and a partner in the recipient country. This project proposal had to obtain approval from the recipient country authorities. These applications were the basis of priority discussions between Denmark and the recipient countries. In 1995 this model was supplemented with tenders for activities which are given priority by Denmark and the recipient country.

2. DESF Strategy and Priorities

Overall objectives

The overall objectives of Danish environmental support to Central and Eastern Europe are:

• to contribute as much as possible to the protection of the environment and nature in the CEEC (Central and Eastern European Countries) and to limit regional as well as global pollution, including cross-border pollution affecting Denmark,
• to promote the transfer of knowledge of the environment and of environmental protection technology from Denmark to the CEEC,
• to contribute towards political and economic development in an environmentally friendly manner; specifically to support democratic and market-based economic development in such a way that the environment is protected as much as possible.

DESF strategy

The Danish Government’s strategy with regard to environmental efforts in Central and Eastern Europe is based on two principles:

• efforts should focus on geographic or technical areas allowing the greatest possible benefits in relation to environment and nature, and where, at the same time, it is possible to achieve visibility and quick implementation of interventions,
• efforts should be concentrated primarily in sectors where Danish environmental knowledge and technology can provide competent assistance.

The strategy takes into consideration the international environmental strategies resulting from the Conferences of the European Ministers of Environment held in Dobris, Czechoslovakia in June 1991, in Lucerne, Switzerland in April 1993, and in Sofia, Bulgaria in October 1995.

Project types supported

Financial support is given to the transfer and development of environmental knowledge and technology in the form of general studies, pre-feasibility studies and project formulation, design, delivery of equipment as well as environmental investment projects. Education and training are normally integrated into the various project types. Activities are focused on investment projects.

Priority is given to demonstration projects, which confirm the effectiveness and economic advantages of a specific technology, and which can easily be replicated.

When the DESF facility was introduced, emphasis was given to technical assistance in the form of consultancy services, education and training. DESF emphasis has gradually shifted towards demonstration projects and environmental investment projects. The recipient countries’ own wishes are essential input to prioritization of DESF support. Projects must therefore be identified in close collaboration with the recipient countries.

DESF priority areas

DESF priority areas cover:

• air pollution,
• water pollution,
• solid and hazardous waste,
• cleaner technology,
• biological diversity and sustainable forestry, and
• institutional strengthening.

Table A below expresses the total Danish environmental assistance to Central and Eastern Europe divided into priority areas and project types during 1994 to 1996 in DKK million.

Table B shows the total Danish support to the individual Central and Eastern European countries divided into TA and IN projects during 1994 to 1996.

It should be noted that the period 1991 to 1993 is not included in the two tables below.

Approximation to EU environmental legislation

Approximation to EU environmental legislation is also supported by the DESF facility. Currently, Denmark assists six countries in the approximation process, i.e. Estonia, Latvia, Lithuania, Poland, the Czech Republic and Bulgaria. Efforts are targeted at implementing environmental directives which require heavy investments and short term technical assistance.

Forest and nature management

Under the DESF facility, a strategy on support for sustainable nature and forest management in Estonia, Latvia, Lithuania, Poland and the Kaliningrad region of Russia has been prepared. The strategy identifies target areas for Danish support and sets out evaluation criteria for projects under this sub-programme to the DESF.

The Danish National Forest and Nature Agency holds the responsibility for the identification and evaluation of the technical aspects of this strategy.

3. Project Evaluation Criteria

Two models are applied in connection with environmental projects supported by the DESF facility, i.e.:

Application

The application model, which was the predominant way of obtaining support at the start of the DESF. Typically, this model is used by a partnership between a Danish applicant and a partner in the recipient country who identify and describe a project according to guidelines provided by DEPA. Subsequently, the Danish consultant applies for DESF support by using this model.

Tender

The tender model, which has been gradually introduced and is gaining importance especially after the approval of the country programmes. Typically, the Danish Environmental Protection Agency identifies the projects in close co-operation with the recipient country. The identified projects will subsequently be tendered according to official tender procedures.

The DEPA describes a number of standard project evaluation criteria in the publication Project Proposals for Environmental Activities in Central and Eastern Europe. These criteria are used in the review of project applications and as a base for evaluation of tendered projects and pipeline development. The publication is mainly in Danish, but procedures for preparing project descriptions are described in English.

Needs and wishes of the recipient

A crucial factor in the formulation of a project is the needs and wishes of the recipient. It is essential to the success of a project to determine which services and products are of interest to the recipient. The term recipient is broadly defined and may include public as well as private enterprises, government authorities, NGOs, etc.

Approval by recipient

Before a project can be approved for DESF support, it must be approved in writing by the national environmental authorities in the recipient country.

Co-ordination with other donors

Funding is largely co-ordinated with other donors and funding sources, in order to promote synergy between projects and to avoid duplication of efforts.

Extent of pollution reduction

Projects will be evaluated with regard to the pollution reduction anticipated measured in terms of quantity and toxicity.

Equal emphasis is given to minimizing transboundary pollution (global as well as regional) and local pollution problems.

Implementation projects which imply a significant quantitative and/or qualitative improvement of the environment are given high priority.

TA projects may be given just as high priority as an implementation project if the projects are essential to the solution of environmental problems.

The environmental consequences of a project should, to the extent possible, be specified in the project proposal, typically quantified e.g. in tons/year. This includes the anticipated pollution reduction resulting from the project, assuming that the project is implemented as specified in the project proposal. The secondary environmental effects should to the extent possible be specified, too.

Transfer of Danish know-how and/ or technology

DESF support is primarily granted to projects which entail the transfer of Danish know-how and/or technology. As a general rule, only projects involving proven technologies will be approved. Projects involving the development of new technology may, however, be considered in exceptional cases.

Pollution prevention, purification or clean-up

Environmental problems are closely tied to the volume and structure of production and consumption. Interventions should thus seek to attain savings in consumption of resources, energy and water. In this connection, focus should be on pollution prevention, conservation, cleaner technology and recycling rather than on clean-up of old pollution.

Pollution and economic development

When considering pollution prevention, the interrelation between pollution and economic development is important. The CEEC are in a difficult process of economic transition. Benefits to both the environment and the economy can be attained to the extent that environmental interventions can be integrated into the on-going restructuring process. An example is the reconstruction of energy systems.

Project finalization

Projects, which can be fully completed are likely to be given higher priority than projects for which follow-up or related projects will obviously be needed.

Dissemination effect

Priority will be given to projects which in the course of implementation or project reporting enable:

• dissemination of Danish environmental know-how or technology, or
• demonstration of financially and technologically appropriate solutions for environmental protection.

Projects of general interest and utility, possessing the potential of being replicated, will be given preference over projects of specific interest, which may be for a limited number of potential implementors.

All projects must include activities, contributing to the dissemination of project results, either in the form of workshops, articles in journals, or similar activities.

Technical and geographic coherence

Priority is given to projects which are consistent with the country’s environmental strategy and environmental project/programme portfolio.

Moreover, priority is given to projects in geographic areas with serious environmental problems as well as areas of ecological value.

Project viability

Project viability is tied to a number of factors, such as:

• political support for the project,
• appropriate choice of technology,
• institutional and managerial capacity of the recipient,
• economic and financial considerations.

Project viability can be assessed in terms of the project’s ability to continue operations and environmental impact even after withdrawal of DESF and other donor support.

Co-financing

DESF financial assistance is perceived as a means of promoting self-support. As such, projects involving the recipient’s own capital, whether the recipient is an enterprise or a government agency, will be given higher priority than projects which rely solely on DESF support.

Projects, where subsequent phases are likely to be financed by other sources - the recipient’s own capital or funding from other donors - will also be given high priority.

Three typical funding patterns are applied:

• projects financed solely by the DESF, usually TA projects, small IN projects or pilot projects,
• projects in the range of USD 3-7 million, where co-financing is likely to come from the recipient or from national financial institutions and funds,
• large-scale projects, expected to be funded by international financial institutions, which can be kick-started by Danish inputs through e.g. feasibility studies or financing studies.

DESF support averaged about USD 400,000 per project for projects approved during the period 1991-95, with DESF support to the individual projects ranging from USD 42,000 to USD 2.5 million. Total project costs ranged from USD 42,000 to USD 25 million. The typical financial gearing factor was 4.0. In other words, every DKK 1 (Danish kroner) spent by the Danish state on e.g. air quality improvement in the CEEC generated an additional DKK 4 from other sources, i.a. donors and recipients.

Type of projects

Environmental assistance may take the form of investment projects (IN) or technical assistance projects (TA). Most projects combine both components. The following classifications are used by the DEPA:

Technical assistance includes:

• pre-appraisal (including environmental studies, planning and analyses),
• monitoring,
• feasibility study and appraisal (including review),
• supervision (training and education).

Investment includes:

• project design,
• construction and maintenance,
• supply of equipment.

4. Country Portfolio Priority Areas

The purpose of this chapter is to describe the efforts undertaken in the 12 countries with which Denmark co-operates. An introduction is given to co-operation between the individual country and Denmark from 1991 to 1996.

Furthermore, a table shows the size of the grants and the number of projects for each of the countries. The projects are divided into technical assistance projects (TA) and investment projects (IN).

Country programme

After the description of the individual Central and Eastern European country, the country programme is presented. This programme is the co-operation document forming the basis for activities in the next years. It is part of the overall agreement on environmental co-operation between the recipient country and Denmark.

The country programme is an agreement between the recipient Ministry of Environment and the Danish Environmental Protection Agency describing i.a. sector priority areas in the individual country (i.e. water pollution, hazardous waste, air pollution etc.) and project proposal procedures. The priority areas are described in detail in each individual country programme.

Basically, the country programmes have been prepared using the same approach. Especially the introductory paragraphs are close to being identical in all the programmes. However, to take account of individual differences, it has been decided to include the entire country programme for each of the 12 Central and Eastern European countries.

Country programmes were prepared for the first time in 1995. Some of the programmes date from late 1995 and others from 1996 and onwards. Some have been revised, others not. Therefore some programmes might include out-of-date wording. When trying to understand the relations between Denmark and a specific recipient country, one has to take this time lag into account. The procedures of approval often take quite a long time and it is therefore impossible to present updated versions of all country programmes simultaneously.

The programmes may help understand the detailed character of the bilateral co-operation between the recipient country and Denmark. However, they should not be regarded as instruments to determine the kind of projects which will be commenced in the future.

Non-inclusion in country programmes

It should be noted that efforts related to the two priority areas mentioned below not have been included in several of the country programmes as these areas to a large extent have been established after adoption of the country programmes. However, the two priority areas will be incorporated in future revisions of the relevant country programmes.

Approximation to EU environmental legislation

Accession to the European Union requires the ten CEEC applicants to be in compliance with EU environmental legislation. Therefore, EU approximation is a priority area of increasing importance to the CEEC. Applications for EU membership have been submitted by Estonia, Latvia, Lithuania, Poland, the Czech Republic, Slovakia, Hungary, Slovenia, Romania and Bulgaria.

Denmark has agreed to support Estonia, Latvia, Lithuania, Poland, the Czech Republic and Bulgaria in the approximation process.

Nature

Furthermore, nature and forest management in Estonia, Latvia, Lithuania, Poland and the Kaliningrad region of Russia constitute new target areas for Danish support. Efforts in this relation are undertaken by the Danish National Forest and Nature Agency and the DEPA.

4.1 Belarus

Negotiations on environmental co-operation with Belarus were initiated in 1992 along with the first project under the DESF. An agreement on environmental protection between Denmark and Belarus was signed in June 1994.

Danish assistance

During 1991-1996, a total of approx. DKK 15 million has been granted to nine projects (see Table 1). Total co-financing from other sources has been approx. DKK 50 million of which a project on phase-out of ozone depleting substances accounts for approx. DKK 40 million. Part of Belarus is run-off area for the Baltic and environmental efforts have been concentrated in areas with a potential cross-border effect, namely waste water treatment (including water supply) and air pollution. Sustainable forest and nature protection has, however, from the start also been given priority in Belarus.

However, until the present political situation in Belarus improves and the international community changes its policy towards the country, new projects will only be initiated in the regions where transboundary pollution is a concern for the Baltic area and/ or a project is grounded on clear humanitarian concerns.

Examples of projects supported by DESF are:

• Methods to determine emissions from Belarussian industries demonstrated at the Volma asphalt plant outside Minsk,
• Belarus water and environment Project in the cities of Brest, Grodno and Vitebsk (feasibility study under EBRD),
• Integrated control programme for Lymantria Monacha (biotechnological combating of pests in forests).

Future efforts will focus on the following sector priority areas:

• Protection of water resources and waste water treatment,
• Hazardous waste management,
• Sustainable forest and natural resource management, and
• Institutional co-operation.

4.4.1 Country programme for the Republic of Belarus

Introduction

1. The Danish Environmental Support Fund for Central and Eastern Europe (DESF) administered by the Danish Environmental Protection Agency (DEPA) provides support to activities limiting pollution through air, water and waste, support the strengthening of the institutions that are responsible or involved with the effort to reduce pollution, and support efforts for the preservation of natural amenities.

2. The implementation strategy of the DESF based on two main principles:

1. activities are concentrated geographically and focus is established in the areas where the greatest benefits to nature and the environment can be achieved, and where the efforts can be achieved in a transparent and quick manner, and
2. activities are concentrated primarily in sectors where the Danish knowledge on the environment and technology to protect the environment and nature is especially competent to provide qualified assistance.

3. This Country Programme focuses on the part of the Environmental Support Fund directed towards the Republic of Belarus. Similar programmes have been or are being developed for all countries/regions under DEPA’s environmental support facility for Central and Eastern Europe.

4. The objectives of this programme to protect the environment and natural resources in Belarus will focus on the following sector priority areas:

1. Protection of Water Resources and Waste Water Treatment;
2. Hazardous Waste Management;
3. Sustainable Forest and Natural Resource Management;
4. Institutional Co-operation.

In addition, some follow-up activities to projects already implemented may also be initiated. This may include follow-up in the sector of ozone layer protection.

5. Development of the co-operative mechanisms between the Ministry of Natural Resources and Environmental Protection of the Republic of Belarus (MNREP) and DEPA, and the approval of concrete initiatives, will take place during 2-4 annual meetings between MNREP and DEPA. Two annual meetings are mandatory; when held in Denmark, MNREP shall pay the international travel expenses while DEPA pays hotel and daily allowances for the Belarussian delegates; when held in Belarus, DEPA pays international travel expenses, hotel and daily allowances. In between meetings between MNREP and DEPA projects can be approved by written procedure. The Co-operation Document or Country Programme for Belarus should be continuously developed and up-dated.

6. The DEPA Programme Co-ordinator (DPC) shall represent DEPA on all matters related to the Danish Support Fund activities in Belarus. The DPC will review and report on the progress of implemented activities, co-ordinate on-going activities and assist in the preparation of new activities. A corresponding contact person and Belarussian Programme Co-ordinator shall be appointed by MNREP.

Project Proposal Procedures

7. Project proposals for funding of environmental activities in Belarus may be submitted to DEPA at any time. New proposals will be subject to evaluation at the co-ordinating meetings between the two ministries, or, upon a joint agreement by the two ministries, by written procedure in between the meetings.

8. Proposals have to be developed as outlined in the DEPA Publication "Orientering fra Miljøstyrelsen" no. 14, 1995 (see Appendix 1 for description in English of the Project Proposal Guideline - MNREP will translate the Appendix into Russian). The technical content of the proposal shall include a description of the significance and the background of the problem, statements about how the Program Priority Criteria will be covered, a project description following the Logical Framework Approach including clear outputs and monitoring indicators, and a presentation of project participants and their qualifications.

9. A project proposal offeror should in advance make sure that the goals and the absolute main part of any proposed activities are within a sector priority area. Outside the sector priority area proposals will routinely be considered for funding only if the project can be viewed as a necessary activity to complete ongoing funded activities, or if the project is viewed as being very essential for the co-operation.

10. Activities based on co-operation between a Belarussian and a Danish partner will be prioritised. The object is to transfer knowledge and technology in the field of the environmental protection or natural resource management.

11. High priority is given to investment projects resulting in substantial emission reductions. Consequently, projects being co-financed will have a higher priority than projects financed exclusively by Danish grants. Projects that will be followed by national activities, e.g. regulation or similar institutional strengthening activities, education and training, in order to provide the basis for a general implementation and/or dispersal of results, will have higher priority than single isolated projects. Project proposals will also be evaluated with reference to their relationship to supplementary national or international activities in the area, and the integration of the project into an environmentally and economically sustainable development.

12. Project proposals will be subject to independent review by the MNREP and DEPA. Decisions on funding are based on negotiations between the two ministries and subsequent approval by the DEPA management.

Project Pipeline Activities

13. Up to now, DEPA has supported projects in Belarus within air pollution, water and water pollution, nature and forestry protection and institutional strengthening.

14. Within the sector priority areas the MNREP and DEPA will initiate project identification and project preparation activities as part of a project cycle management. Danish and local consultants, institutions and organisations will be invited to participate through contracting and implementation. Appendix 3 presents a list of project ideas / projects in the pipeline for 1997/98.

15. Project Pipeline activities will basically follow the DANCED Project Management Manual (August 1995) which is also used by DEPA. A copy of the Manual is enclosed as Appendix 4. Special attention should be paid to Annex B2 in the Manual: Format for Project Idea Description. A Russian version of this format is contained in Appendix 5. Specific missions proposed for 1997 are listed as part of the Project Pipeline list in Appendix 3.

16. It is anticipated that within the Sector Priority Areas special attention will be paid to projects:

1. that produce results which will allow the MNREP better to prioritise and implement initiatives that benefit the environment and nature protection,
2. that involve investments leading to significant pollution reductions and solid local institutional and/or financial involvement, and
3. that are preparatory for decisions on national and international financing of environmental activities, including loan operations.

Sector Priority Areas

Waste Water Treatment and Protection of Water Resources/Water Supply

17. Efficient provision of water and sanitation services to population and businesses including protection of the environment and the conservation of scarce resources are of high priority for the Government of the Republic of Belarus. On this background, DEPA has supported the project: "Belarus Water and Environment Project" which is a feasibility study of water and waste water services in three cities, namely Brest, Grodno and Vitebsk. The overall objective of the project is to improve the quality, reliability, efficiency and availability of water and waste water services and to strengthen the water enterprises in the three participating cities into operationally strong and financially sound utilities operating on a cost recovery basis.

18. The DEPA is interested in supporting the implementation of the Belarus Water and Environment Project, and MNREP and DEPA have agreed to investigate the possibilities of pursuing further work in Brest, e.g. in the form of a Corporate Partnership as requested by EBRD. Consideration of other large scale projects in the field of waste water treatment, such as improvement of the Waste Water Treatment Plant in Minsk, shall depend on the results of the ‘three cities project’: Belarus Water and Environment Programme in Brest, Grodno and Vitebsk.

19. Furthermore, priority will be given to projects that aim at reducing transboundary emissions from point sources of pollution along the major Belarussian rivers leading to the Baltic Sea. These include the West Dvina, Neman and Bug rivers.

20. A special problem of water supply exists in rural areas contaminated by the Chernobyl accident. Often water is supplied from open sources that are highly contaminated. Focus will be put on projects that seek to improve this situation.

Hazardous Waste Management

21. Hazardous waste from industries and agriculture poses a serious and acute problem in Belarus today. As a consequence of unforeseeable accidents, lack of resources, past neglect, or lack of knowledge of sound environmental practices, certain locations have become contaminated with toxic substances or agents resulting in soil and ground water pollution.

22. Up to now, DEPA has not supported any projects in this area, but it has been identified as a key priority sector for future co-operation. A pesticide project has been identified aiming at eliminating the large deposits of un-used pesticides as well as establishing a system for control and regulation of the use of new pesticides.

Nature and Forest Protection

23. Under the DESF, the Danish National Forest and Nature Agency (NFNA) is surveying the needs and potentials of bilateral co-operation with various countries in Eastern Europe in the field of sustainable forest and natural resource management. A project identification mission visited Belarus during November 1996 with the purpose of identifying areas of co-operation based on the needs and policies of Belarus and the potentials and capacities of the Danish resource base. The mission found that the priority objects for further co-operation are:

• Co-operation on management plans and improved protection of protected sites (preserves, forested wetlands, national parks, sanctuaries), especially the Belovezhskaya Pushcha National Park. Other sites where improved protection is being established or considered may also be relevant.
• Co-operation in improvement of forest health conditions and sustainable forest management including procurement and preservation of genetic forestry resources as well as rehabilitation of forest areas contaminated by the Chernobyl accident, and
• Co-operation on the implementation of international conventions in the field of bio-diversity and environmental protection, e.g. the Ramsar Convention and the Biodiversity Convention (Rio).

24. A number of concrete project ideas within these areas of co-operation have been further developed during a mission by NFNA in May 1997 and are listed in the 1997/98 Project Pipeline.

25. Earlier projects in the field of nature and forest protection include:

• Forest Wetlands Environment Assessment (1993), with the purpose of reviewing the potential environmental impact on wooded wetlands resulting from planned, intensified utilisation of forest resources.
• An Integrated Control Programme for Lymantria monacha, Diprion pini and other Defoliators (1995-96). This project, which is based on the use of biological products instead of organo chlorine and organo phosphorous products, has had a significant effect on the pest management and the protection and ecological balance of Belarus forests.

Institutional Strengthening

26. Institutional strengthening and capacity building are important on all levels in Belarus in the field of environmental protection, resource management and nature conservation. Within this priority area, DEPA has financed a study on "The State of the Environment in Belarus" (1992), but aspects of institutional strengthening are and should be contained in most projects to ensure sustainability and spreading of the project’s environmental impact.

27. However, intensified co-operation in the field of institutional strengthening is called for. Hence, an MNREP/DEPA Institutional Co-operation project has been identified with the purpose of

• improving the communication between the two agencies,
• improving the skills of Belarussian counterparts in project identification, preparation and monitoring, and
• strengthening the Central Reference Laboratory including assistance in sample preparation and methods for emission monitoring.

A model for such a project has been discussed during negotiations between DEPA and MNREP in April-June 1997.

Other Topics Related to On-going Activities

Air Pollution

28. A number of projects have been approved up to now in the air pollution sector. In 1994, DEPA approved the project: "The state inspection and control of the use and protection of atmospheric air". The project comprises the establishment of a mobile air pollution laboratory to be placed within the National Reference Laboratory at the centre Ecology and includes training of personnel in the use and maintenance of the equipment.

29. The project: "Methods to Determination of Emissions from Belarussian Industries" was approved early 1995. The VOLMA asphalt plant was selected as demonstration site. The project comprised an environmental assessment of the plant, control and reduction of emission at the asphalt plant, training of technical staff, and information dissemination about the Danish regulation and guidelines for air emissions.

30. Ozone depleting substances are a very serious threat to the stratospheric ozone layer, which protects the earth from harmful radiation from the sun. The substances are regulated by the Montreal Protocol, which has also been signed by the Republic of Belarus. The DEPA has been involved in technical and financial assistance for making a country programme, which is the precondition for GEF-financing of concrete investment projects.

31. Possible follow-up activities to these projects would be prioritised in the DEPA/MNREP co-operation.

4.2 Bulgaria

Danish efforts

In 1993, co-operation with Bulgaria was initiated with a DKK 750,000 grant for a TA project targeted at phasing out ozone depleting substances. The project would enable Bulgaria to receive grants from the Global Environmental Facility (GEF) to the phase-out of the substances. The aim was achieved as the GEF has subsequently allocated USD 12 million to Bulgaria.

In 1996, efforts in Bulgaria were increased significantly with a DKK 16 million grant to 6 projects. Since 1993, a total of DKK 23 million has been allocated to 10 projects of which nearly DKK 20 million has been allocated to IN projects.

4.2.1 Country programme for Bulgaria

Introduction

1. The Danish Environmental Support Fund for Central and Eastern Europe provides support to activities limiting pollution through air, water and waste, supports the strengthening of the institutions responsible for or involved in the effort to reduce pollution, and supports efforts for the preservation of natural amenities.

2. The implementation strategy of the Environmental Support Fund is based on two main principles:

• activities are concentrated geographically and focus on the areas where the greatest benefits to nature and the environment can be achieved, and where the efforts can be achieved in a transparent and quick manner.
• activities are concentrated primarily in sectors where the Danish knowledge on the environment and technology to protect the environment and nature is especially competent to provide qualified assistance.

3. On 1 June 1994 an agreement between the Ministry of Environment of Bulgaria and the Ministry of the Environment of Denmark on co-operation in the field of environmental protection was signed. The Ministries decided a.o. to further develop and encourage the collaboration in the field of environmental protection and nature conservation.

4. Attached in Appendix 1 is a short summary of completed and on-going projects.

5. The Country Programme should be continuously developed and updated.

Co-operation Model

6. In the daily work, the Ministry of Environment and Water (MOEW) and the Danish Ministry of Environment and Energy through the Danish Environmental Protection Agency (DEPA) have to co-operate closely.

7. The DEPA Country Co-ordinator (DCC) shall represent the DEPA on all matters related to the Danish Support Fund activities in Bulgaria. The DCC shall review and report on the progress of implementing activities, co-ordinate ongoing activities and assist in the preparation of new activities.

8. A Bulgarian co-ordinator shall represent the MOEW on all matters related to the Danish Support Fund activities in Bulgaria and be the day-to-day contact person.

Project Proposal Procedures

9. Project proposals will mainly be identified by MOEW and DEPA. Project proposals for funding of environmental activities in Bulgaria may be submitted to MOEW and DEPA at any time. Project proposals may only expect to be subject to evaluation at meetings between MOEW and DEPA.

10. Project proposals can be prepared in two ways. The proposals from the Bulgarian side should be prepared with Terms of Reference and a background description for the project. The proposals from the Danish side should be prepared as outlined in the DEPA Publication "Orientering fra Miljøstyrelsen" No. 14, 1995. The technical content of all the proposals shall include a description of the significance and the background of the problem, a project description following the Logical Framework Approach including clear outputs and monitoring indicators, and a presentation of project participants and their qualifications.

11. A project proposal offeror should in advance make sure that the goals and the absolute main part of any proposed activity are within a priority area. Outside the priority areas proposals will according to routine be considered for funding only if the project can be viewed as a necessary activity to complete ongoing funded activities or otherwise contributes significantly to the improvement of the environment.

12. The activities shall be based on co-operation between a partner in Bulgaria (a factory, a technical institute, a private firm, an administrative body etc.), and a Danish partner. The objective is to transfer knowledge and technology in the field of environmental protection or natural resource management.

13. High priority is given to investment projects resulting in substantial emission reductions. Consequently, projects being co-financed will have a higher priority than projects financed exclusively by Danish grants. Projects that will be followed by national activities, e.g. regulation in order to provide the basis for a general implementation and/or dispersal of results will have higher priority than single isolated projects. Project proposals will also be evaluated with reference to their relationship to supplementary national or international activities in the area, and the integration of the project into an environmentally and economically sustainable development. Projects in the priority areas mentioned in the Country Programme are given priority and will to a high degree be built as demonstration projects.

14. Where the Bulgarian side co-finances a project from different Bulgarian sources (National Environmental Protection Fund, municipality or the PHARE programme) the partners sign a memorandum.

15. Project proposals will be subject to independent review by MOEW and DEPA.

Priority Areas

16. Cleaner technology, tanneries

to demonstrate the feasibility of specific cleaner technology solutions and to document environmental improvements as a result of different investments in cleaner technology. Cleaner technology solutions will be implemented in selected tanneries.

17. Air

to participate, mainly in the industrial sector, in the implementation of projects, which result in significant air emission reduction.

18. Water

to participate in the demonstration and the implementation of projects related to waste water treatment plants, which result in significant water pollution reduction.
to participate in the demonstration of the different possibilities for water saving related to drinking water.
to participate in a project related to protection of the ground water (drinking water).

19. Waste

to make a demonstration project related to establishing a modern landfill and related to this to improve the handling of the domestic waste.
to participate in solving the environmental problems related to special hospital waste in a selected region.

20. EU-approximation

to support the preparation for eventual accession to the European Union by strengthening its environmental legislation in specific areas, bringing it into line with EU requirements and improving the institutional and administrative framework necessary to implement and enforce that legislation.

21. CITES-convention

to support activities which will improve the control of the international trade with protected species of animals and plants.

22. Participating in Isolated Cases.

At the moment project proposals concerning environmental projects outside the effort areas, will only be considered, if the projects can be included in the project proposal procedure, if there is a relatively high degree of co-financing and, of course, still sufficient funds.

4.3 Czech Republic

State of the environment

The Czech Republic suffers from heavy pollution caused by domestic large-scale heavy industries. The severe environmental problems originate primarily from air pollution deriving from the energy, industry and transport sectors. The Czech Republic has given priority to:

• reduction of air pollution,
• water quality improvement, including establishment of purifying plants and
• reduction of waste and hazardous waste volumes.

Generally, grants have been allocated evenly between TA and IN projects. However, the major part of the funds used for technical assistance has been allocated shortly after the establishment of the DESF facility.

Division of projects

On 1 January 1993, the federal state of Czechoslovakia was divided into the Czech Republic and Slovakia. 90 per cent of the projects supported by the DESF from 1991-93 were situated in what became the Czech Republic. In Tables 3 and 11 for the Czech Republic and Slovakia respectively, projects which were initiated or carried out in Czechoslovakia have been divided between the Czech Republic and Slovakia.

It has not been possible to include project financing by international donors in the current co-operation as the Czech Republic does not want to obtain loans for environmental projects. However, several IN projects have been co-financed by the State Environmental Fund (supports projects by granting aid or soft loans within the areas water supply, waste water treatment and air emission reduction) and the National Property Fund (cleaning operations at former state-owned undertakings).

Co-financing by the Czech Republic

It is characteristic of the implemented projects that co-financing by the Czech Republic is particularly high compared to the other countries co-operating with Denmark under the DESF. Thus, Danish assistance only accounts for approx. 5 to 20 per cent of the total costs related to the individual projects.

The category "other" primarily covers the institutional area.

4.3.1 Country programme for the Czech Republic

Introduction

1. The Danish Environmental Support Fund for Central and Eastern Europe provides support to activities limiting pollution through air, water and waste, support the strengthening of the institutions that are responsible or involved with the effort to reduce pollution, and support efforts for the preservation of natural amenities.

2. The implementation strategy of the Environmental Support Fund is based on two main principles:

a. activities are concentrated geographically and focus is established in the areas where the greatest benefits to nature and the environment can be achieved, and where the efforts can be achieved in a transparent and quick manner, and

b. activities are concentrated primarily in sectors where the Danish knowledge on the environment and technology to protect the environment and nature is especially competent to provide qualified assistance.

3. The objectives of the part of the programme to protect the environment and natural resources in the Czech Republic have focused on five sector priority areas: Reduction of Air Pollution, Water Protection/Remediation of Polluted Groundwater, Institutional Strengthening, Cleaner Technology and Hazardous Waste. Minor activities will be undertaken in the energy sector and some follow-up activities to projects already implemented will also be initiated.

Project Proposal Procedures

4. Project proposals for funding of environmental activities in the Czech Republic may be submitted to DEPA at any time, however new proposals will only be subject to evaluation as per the closing dates March 31, June 30, September 30 and December 31.

5. Proposals have to be developed as outlined in Danish Environmental Protection Agency (DEPA) Publication "Orientering fra Miljøstyrelsen" no. 14, 1995 (description in English in appendix 4.). The technical content of the proposal shall include a description of the significance and the background of the problem, statements about how the Program Priority Criteria will be covered, a project description following the Logical Framework Approach including clear outputs and monitoring indicators, and a presentation of project participants and their qualifications.

6. A project proposal offeror should in advance make sure that the goals and the absolute main part of any proposed activities are within a sector priority area. Outside the sector priority area proposals will routinely be considered for funding only if the project can be viewed as a necessary activity to complete ongoing funded activities.

7. The activities shall be based on co-operation between a partner in the Czech Republic (a factory, a technical institute, a private firm etc.), and a Danish partner. The object is to transfer knowledge and technology in the field of the environmental protection or natural resource management.

8. High priority is given to investment projects resulting in substantial emission reductions. Projects being co-financed will have a higher priority than projects financed exclusively by Danish grants. Projects that will be followed by national activities, e.g. regulation, in order to provide the basis for a general implementation and/or dispersal of results will have higher priority than single isolated projects. Project proposals will also be evaluated with reference to their relationship to supplementary national or international activities in the area, and the integration of the project into an environmentally and economically sustainable development.

9. Project proposals will be subject to independent review by Ministry of Environment of the Czech Republic (MOE) and DEPA. Decisions on funding are based on negotiations between the two ministries and subsequent approval by the DEPA management.

Project Pipeline Activities

10. Within the sector priority areas MOE and DEPA will initiate project identification and project preparation activities as part of a project cycle management. Danish and Czech consultants, institutions and organisations will be invited to participate through contracting and implementation.

11. Project Pipeline activities will basically follow the DANCED Project Management Manual (DEPA Project Preparation Manual 1995). Specific missions already planned for 1996 are listed for each Sector Priority Area below.

12. It is anticipated that within the Sector Priority Areas special attention will be paid to projects:

1. that produce results which will allow the MOE better to prioritize and implement initiatives that benefit the environment and nature protection,
2. that involve investments leading to significant pollution reductions and solid local institutional and/or financial involvement, and
3. that are preparatory for decisions on national and international financing of environmental activities, including loan operations.

Sector Priority Areas

Reduction of Air Pollution

13. Reduction of air pollution will be one of DEPA’s major activities in the Czech Republic. Examples will be through introducing Cleaner Technology, renewable energy, through installing filters, chance of fuel, etc.

14. The Environmental Support Fund have funded several projects regarding the above mentioned problems in the Czech Republic, e.g. air pollution reduction in Decin including delivery of equipment for the first natural gas fired CHP-plant, pollution reduction for the energy sector at Hradec Kralove, installing of filter system at a furniture factory, establishment of six 500 kW VESTAS windmills in Jesenik and a feasibility study regarding the possibilities of using geothermal energy in the Czech Republic.

15. Some projects are in the pipeline and some are proposed by MOE. It is expected that DEPA in 1996 will be involved in 3-5 projects in this area.

Waste Water Treatment

16. The Danish Environmental Support Fund has only funded two projects in the Czech Republic. One project regarding establish-ment of a Waste Water Treatment Plant in Horice (17.000 PE) and one project regarding Organisation of Waste Water at smaller Municipalities.

17. There are no projects in the pipeline.

Surface Waters and Water Resources

18. A few projects have been funded in the above mentioned areas, e.g. rehabilitation of river Vinor Potec in Prag, River Ploucnice at Straz Block where the river is polluted by uranium. At Straz Block, DEPA also has funded a project regarding remidiation of polluted Ground Water by uranium and in Ziar nad Sazavou, protection of ground water.

19. There are no projects in the pipeline. It is expected that DEPA in 1996 will be involved in 1-2 projects in this area.

Institutional Strengthening

20. Institutional strengthening and capacity building are important on all levels in the Czech Republic in the field of environmental protection, resource management and nature conservation. A significant part of the ongoing projects already implemented serve to strengthen local and regional authorities and institutions. An example is "Consulting Assistance for Protection and Restoration of water Quality in Drinking Water Reservoirs in Zdár nad Sázavou Region in the Czech Republic".

21. The Environmental Support Fund has supported 3 projects regarding Strengthening the Framework and Administration of the Czech Republic’s new acts on water and wastewater, act on Environmental Protection and building up the Regional Environmental Administration.

22. Further two projects have been supported regarding Implementation of Economical Instruments in MOE.

23. A project, "Municipal Water Systems, Technical, Financial and Organisational Options for small towns" has been supported.

24. Finally DEPA has supported Phase 1 of a project regarding establishment of a Czech EPA.

25. It is expected that DEPA in 1996-97 will be involved in 1-2 projects in this area.

Cleaner Technology

26. Cleaner Technology is the designation used with reference to waste minimisation, cleaner production or pollution prevention. The context is rather broad and is not limited to strictly technical issues. Managerial and organisational issues are incorporated as well.

27. Cleaner Technology activities highlight private sector involvement and participation in waste minimisation and pollution prevention at the source level. Efficient implementation of Cleaner Technology requires a close and good-working relation-ship between private companies and authorities responsible for the environmental protection.

28. The main focus is on "source reduction" and other practices that reduce or eliminate the creation of pollutants trough increased efficiency in the use of raw materials, energy, water or other resources. "Source reduction" is any practice which reduces the amount of any hazardous substance, pollutant, or contaminant entering any waste stream or otherwise released into the environment prior to treatment, disposal, or recycling.

29. The activities include: equipment or technology modifications, process or procedure modification, reformulation or redesign of products, and substitution of raw materials. Improvements in housekeeping, maintenance, training or inventory control that result in pollution prevention are included as well as energy recovery. Activities not included are recycling, treatment and disposal. Some practices commonly described as "in-process" recycling may qualify as cleaner technology because it can reduce the need for treatment or disposal, and conserve energy and resources.

30. The Environmental Support Fund has initiated a few Cleaner Technology projects in the Czech Republic. It is intended during 1996 to develop a more coherent Cleaner Technology Program in the Czech Republic.

31. A Czech-Danish Work Programme will be developed by DEPA to be presented to MOE in the summer 1996. This program will include a descriptions of goals, tasks and expected inputs. The program will include new activities as well as continuation and consolidation of ongoing activities.

Hazardous Waste

32. Hazardous industrial waste and medical waste require special treatment or disposal to prevent aquifer or air contamination. As a consequence of unforeseeable accidents, past neglect, or lack of knowledge of sound environmental practices, certain locations within the Czech Republic have become contaminated with hazardous and toxic substances or agents. These contaminants have permeated and adsorbed into soils, diffused to interstitials in the saturated zones, dissolved into ground waters and migrated to subsurface aquifers.

33. Hazardous Waste Treatment Facilities have been considered to be a priority for investment in the environment sector. The Danish Support Fund have supported several projects, some feasibility studies and some investment projects.

34. Experience has shown that it is a problem to establish and run a incineration plant or a secure landfill, due to the fact that the cost depositing the waste is too expensive. The existing act regulations are too weak to forbid companies to deposit the waste in an unsecure manner.

35. In may 1996 a new act on hazardous waste will be presented to the parliament for approval.

36. DEPA has supported waste feasibility studies in Tisice and Most. In Most an incineration plant will be established if the new law demands the companies to deposite their waste in a secure documented manner.

37. The Environmental Support Fund has funded a secure deposit at Opava.

38. There are no waste projects in the pipeline.

Nature Protection.

39. The Environmental Support Fund has funded a feasibility study regarding remidiation of heavy metal pollution at the ponds at Vinor Potec, Prag. The result of the project will be a action plan for cleaning up the ponds so they at a later stage again can be used for fishing and swimming.

40. There are no Nature Protection projects in the pipeline. DEPA intents to support 1-3 projects during 1996-97.

4.4 Estonia

Danish assistance

Danish assistance to Estonia is shown in Table 4, divided into number of projects in each individual sector and type and total support granted from 1991 to 1996. The category "other" covers the institutional area.

Primary sectors

Generally speaking, Danish assistance has primarily been concentrated in the water and waste sectors, accounting for 85 per cent of total grants allocated. Within the water sector, investments have primarily been focused on water supply projects. Denmark has co-operated with EBRD on the programme "Small Municipalities Environmental Programme" targeted at water supply and waste water in 13 cities. The programme is carried out in conjunction with Estonia, EBRD, NEFCO, PHARE, Finland, Sweden, Norway and Switzerland. Denmark has supported projects in 3 of the cities.

Within the waste sector, Denmark co-operates with Estonia and PHARE to set up a national system for handling of hazardous waste. The first phase of the project costs DKK 36 million and is financed by a one third contribution by each partner. The other IN project within the waste sector is targeted at implementing a waste action plan in the Järva County, including establishment of a controlled landfill and waste collection schemes.

Total environmental investments

Danish assistance through co-financing with Estonia, other donors, the European Union and/ or the international banks has contributed to total investments of DKK 106 million during 1991 to 1996. Today, Denmark is the second largest donor of environmental projects in Estonia, estimated by Estonian authorities at 18 per cent of total foreign assistance (1996). Finland is the largest donor, accounting for 46 per cent (1996).

EU Appoximation

Furthermore, Denmark assists Estonia in approximating to EU environmental legislation. Thus, support has been granted to two EU approximation projects in 1997.

4.4.1 Country programme for Estonia

Introduction

1. The Danish Environmental Support Fund for Central and Eastern Europe provides support to activities limiting pollution through air, water and waste, supports the strengthening of the institutions that are responsible for or involved in the effort to reduce pollution, and supports efforts for the preservation of natural amenities.

2. The implementation strategy of the Environmental Support Fund is based on two main principles:

1. activities are concentrated geographically and focus is established in the areas where the greatest benefits to nature and the environment can be achieved, and where the efforts can be achieved in a transparent and quick manner, and
2. activities are concentrated primarily in sectors where the Danish knowledge on the environment and technology to protect the environment and nature is especially competent to provide qualified assistance.

3. The objectives of the part of the programme to protect the environment and natural resources in Estonia will focus on four sector priority areas: Water, Waste, Cleaner Technology, and Nature Protection.

Activities will be undertaken in the energy, housing and agricultural sectors in close collaboration with the Danish Environmental Sector Programmes on Energy, Housing and Agriculture within the Danish Energy Agency, the Ministry of Housing and the Ministry of Agriculture and Fisheries.

4. Development of the co-operative mechanisms between the Estonian Ministry of Environment (EME) and the Danish Environmental Protection Agency (DEPA) will be further developed by the introduction of two annual project review rounds as agreed in February 1996 between DEPA and EME. It has further been proposed to employ a Programme Co-ordinator to work in the EME funded by DEPA.

5. The DEPA Programme Co-ordinator (DPC) will represent DEPA on all matters related to the Danish Support Fund Activities in Estonia. The DPC will review and report on the progress of implemented activities, co-ordinate ongoing activities and assist in the preparation of new activities.

Project Proposal Procedures

6. Project proposals for funding of environmental activities in Estonia may be submitted to DEPA at any time, however new proposals will only be subject to evaluation as per the closing dates March 31 and September 30.

7. Proposals have to be developed as outlined in DEPA Publication "Orientering fra Miljøstyrelsen" No. 14, 1995, (description in English in Appendix 2). The technical content of the proposal shall include a description of the significance and the background of the problem, statements about how the Program Priority Criteria will be covered, a project description following the Logical Framework Approach including clear outputs and monitoring indicators, and a presentation of project participants and their qualifications.

8. A project proposal bidder should make sure in advance that the goals and the absolute main part of any proposed activities are within a sector priority area. Outside the sector priority area proposals will be considered for funding only if the project can be viewed as a necessary activity to complete ongoing funded activities.

9. The activities shall be based on co-operation between a partner in Estonia (a factory, a technical institute, a private firm etc.), and a Danish partner. The objective is to transfer knowledge and technology in the field of the environmental protection or natural resource management.

10. High priority is given to investment projects resulting in substantial emission reductions. Projects being co-financed will have a higher priority than projects financed exclusively by Danish grants. Projects that will be followed by national activities, e.g. regulation, in order to provide the basis for a general implementation and/or dispersal of results will have higher priority than single, isolated projects. Project proposals will also be evaluated with reference to their relationship to supplementary national or international activities in the area, and the integration of the project into an environmentally and economically sustainable development.

11. Project proposals will be subject to independent review by EME and DEPA. Decisions on funding are based on negotiations between the two ministries and subsequent approval by the DEPA management.

Project Pipeline Activities

12. Within the sector priority areas EME and DEPA will initiate project identification and project preparation activities as part of a project cycle management. Danish and Estonian consultants, institutions and organisations will be invited to participate through contracting and implementation.

13. Project Pipeline activities will basically follow the DANCED Project Management Manual (DEPA Project Preparation Manual 1995). Specific missions already planned for 1996 are listed for each Sector Priority Area below.

14. It is anticipated that within the Sector Priority Areas special attention will be paid to projects:

1. that produce results which will allow EME better to prioritize and implement initiatives that benefit the environment and nature protection,
2. that involve investments leading to significant pollution reductions and solid local institutional and/or financial involvement, and
3. that are preparatory for decisions on national and international financing of environmental activities, including loan operations.

Sector Priority Areas

Water

Water Management in Small and Medium Sized Settlements and Rural Areas

15. The European Bank for Reconstruction and Development (EBRD)is in the process of implementing a water supply and wastewater handling upgrading programme in Estonia in co-operation with A/S Eesti Veevärk (EWC) called "Small Municipalities Environmental Project" (SMEP). SMEP involves 13 municipalities.

16. EBRD will provide conditional loans in the range of 30-40% of the total investment. These loans will be channelled through EWC. To this end a Project Implementation Unit (PIU) has been established within EWC. PIU is in the process of being strengthened through a twinning arrangement with Oslo Water and Sewage Works financed through Norwegian grants.

17. Further to this the Nordic Environmental Finance Corporation (NEFCO) will provide equity capital and conditional loan to EWC. The remaining part of the financing of the identified projects is envisaged provided as a combination of national grants, local taxes, local user charges and foreign grants.

18. On this background DEPA has decided to provide grants for three projects within the SMEP: two water supply upgrading projects covering the towns Kuressaare and Narva, comprising consultancy services and delivery of pumps and related equipment to Narva and Kuressaare and a Feasibility study for Sillamäe.

19. At a Programme Meeting in February 1996 EME and DEPA have discussed the possibilities for continuing similar activities in some of the municipalities not included in the SMEP, in particular water supply in Tapa and a feasibility study on water supply and waste water treatment in Keila and water supply in Aruküla. Project formulation missions are foreseen during 1996.

20. The World Bank (IBRD) has asked donors for financial support (up to US $700,000) for the "Point Source Pollution Control on the Matsalu Bay Catchment Activity". This is an element of the Environmental Management Component of the recently approved Haapsalu and Matsalu Bays Environment Project which is being supported by IBRD.

21. The requested financial contribution would be used to support: a) the services of a joint team of international and foreign experts to prepare a feasibility study, final designs, tender documents, perform construction supervision and provide training for local operators (US $160,000 estimated); and b) the construction of facilities at eight pre-identified locations which provide opportunities to use a diversity of treatment technologies (US $540,000 estimated). Draft Terms of Reference for the technical services required for the proposed activities are under preparation.

22. DEPA has indicated to EME and IBRD an interest in supporting the project and the work with prequalification of consultants is to start. It is expected that a tender can be carried out in June 1996.

Drinking Water Resources

23. At the Programme Meeting in February 1996 EME indicated a need for an inventory on raw water resource management. The problem for EME is that the competence is by law distributed to the municipalities meaning that EME has no general view. If the EME finds it appropriate, a project formulation mission is foreseen during 1996.

Waste

Solid Waste

24. Present activities focus on solid waste management including comprehensive guidelines for preparation of municipal/regional solid waste management plans. In two counties, Järva and Saare, solid waste management plans have been developed.

25. A proposal regarding implementation of the waste management plan for Järva and a similar project in Tartu Town is under negotiation. These projects focus on construction of a new sanitary landfill and rehabilitation and extension of an existing landfill.

26. A mission on solid waste was carried out in February 1996. The objective was to prepare a work strategy for the Danish activities on waste problems in Estonia. The waste problems in Estonia include a large number of uncontrolled dump sites, outworned collection equipment or lacking collection of municipal waste, inappropriate management of i. a. hospital waste and industrial waste. Furthermore the use of oil shale as energy resource contributes with very large amounts of waste.

27. For the time being new projects concerning municipal waste, industrial waste and hospital waste are under consideration. One Project Formulation Mission is foreseen during 1996. It should evaluate the need for Danish support to implementation activities in the southern and eastern part of Estonia similar to the projects in Järva and Tartu. Furthermore a mission is going to identify and formulate possible projects on industrial waste and hospital/clinical waste in Estonia. The initiatives on industrial waste must be planned and carried out in close connection with the cleaner technology strategy.

Hazardous Waste

28. Within the framework of EU-PHAREŽs Crossborder Programme EME and DEPA have elaborated a project on Hazardous Waste Management in Estonia. A system for collection, handling, treatment and storage will be elaborated through establishing a Project Management Unit and a Partnership Company responsible for the implementation of 4 transfer stations and secure landfill and treatment facilities.

Cleaner technology

29. Cleaner Technology is the designation used with reference to waste minimisation, cleaner production or pollution prevention. The context is rather broad and is not limited to strictly technical issues. Managerial and organisational issues are incorporated as well.

30. Cleaner Technology activities highlight private sector involvement and participation in waste minimisation and pollution prevention at the source level. Efficient implementation of Cleaner Technology requires a close and good-working relationship between private companies and authorities responsible for the environmental protection.

31. The main focus is on "source reduction" and other practices that reduce or eliminate the creation of pollutants through increased efficiency in the use of raw materials, energy, water or other resources. "Source reduction" is any practice which reduces the amount of any hazardous substance, pollutant, or contaminant entering any waste stream or otherwise released into the environment prior to treatment, disposal, or recycling.

32. The activities include: equipment or technology modifications, process or procedure modification, reformulation or redesign of products, and substitution of raw materials. Improvements in housekeeping, maintenance, training or inventory control that result in pollution prevention are included as well as energy recovery. Activities not included are recycling, treatment and disposal. Some practices commonly described as "in-process" recycling may qualify as cleaner technology because it can reduce the need for treatment or disposal, and conserve energy and resources.

33. The Environmental Support Fund has initiated two Cleaner Technology projects in Estonia, one in the fishing industry and another on material flow analysis and prevention strategy on cadmium and mercury. It is intended during 1996 or 1997 to develop a more coherent Cleaner Technology Program in Estonia. This will involve negotiations between the Estonian Ministries of Environment and Industry, as well as with local industrial associations.

Nature protection

34. The Environmental Support Fund has funded a-three-year conservation programme for Estonian wetlands.

35. An ongoing project identification mission on Sustainable Forestry and Natural Resource Management in Estonia (as well as in Lithuania, Kaliningrad, Latvia, and Poland) will result in a limited number of identified concrete areas of future co-operation and project ideas to be further developed into project documents during 1996.

Other topics related to on-going activities

EU-approximation

36. There is a common understanding that the DEPA shall support the EME in the approximation process in the field of environmental legislation. A mission will be send to the EME to identify and prepare a preaccession strategy in this field, widely based on the Estonian priorities.

Oil Spill Combating

37. A Project Document for preparation and implementation of a National Oil Spill Contingency Plan for Estonia has been developed. This activity includes an oil spill risk assessment, a review of existing oil spill combating facilities and an assessment of the necessary institutional set-up. Review of this Project Document is in process for implementation. Similar plans have been developed for Lithuania and Latvia. EME has agreed to seek co-operation between the Baltic Countries with respect to oil spill combatment.

38. A project preparation mission was launched during the fall of 1995 regarding the establishment of oil reception facilities in the main harbours in the Baltic countries. The results of this mission may be bankable projects, e.g., in Tallinn Harbour.

4.5 Hungary

Danish assistance

Since 1991, Danish assistance to Hungary has primarily been concentrated on implementing water and waste projects. The most urgent environmental problems in Hungary are within the water, waste and air sectors.

State of the environment

An example of a major environmental problem is the former Russian military bases which have been given high priority by the Hungarian authorities, as oil pollution originating from some of these bases threatens ground water resources. Regarding air related issues, Danish support in this field has so far been limited, but will be given higher priority in the future.

Co-financing

Danish assistance through co-financing with other sources, primarily Hungarian, has contributed to environmental investments exceeding DKK 60 million.

Primary sectors

The waste and water sectors each account for approx. 30 per cent of the total support granted to Hungary. In the waste sector, support has been divided between household waste and hazardous waste in a 2 to 1 ratio. However, hazardous waste has now been given priority instead of household waste.

The air sector projects include projects targeted at exploiting environmentally friendly energy. The category "other" primarily covers institutional strengthening and a grant for the regional Environmental Centre in Szentendre.

Since the beginning, Danish investment projects (IN) have accounted for a large percentage of the Danish support granted, in fact more than 60 percent of the Danish assistance to Hungary.

4.5.1 Country programme for Hungary

Introduction

1. The Danish Environmental Support Fund for Central and Eastern Europe provides support to activities limiting pollution through air, water and waste, supports the strengthening of the institutions responsible for or involved in the effort to reduce pollution, and supports efforts for the preservation of natural amenities.

2. The implementation strategy of the Danish Environmental Support Fund is based on two main principles:

• Activities are concentrated geographically and focus is established in the areas where the greatest benefits to nature and the environment can be achieved, and where the efforts can be achieved in a transparent and quick manner, and
• Activities are concentrated primarily in sectors where the Danish knowledge on the environment and technology to protect the environment and nature is especially competent to provide qualified assistance.

3. The objectives of the part of the programme to protect the environment and natural resources in Hungary will focus on four sector priority areas not mentioned in order of priority: Water Pollution, Hazardous Waste, Air Pollution and Nature Conservation.

4. The development of the cooperative mechanisms between the Hungarian Ministry for Environment and Regional Policy, herinafter called the HMERP, and the Danish Environmental Protection Agency (DEPA) will be further developed by the introduction of at least one annual project review rounds.

Project Proposal Procedures

5. Proposals have to be developed as outlined in DEPA Publication "Orientering fra Miljøstyrelsen" no. 14, 1995. The technical content of the proposal shall include a description of the significance and the background of the problem, statements about how the Program Priority Criteria will be covered, a project description following the Logical Framework Approach including clear outputs and monitoring indicators, and a presentation of project participants and their qualifications.

6. A Project proposal offeror should in advance make sure that the goals and the absolute main part of any proposed activity are within a sector priority area. Outside the sector priority area proposals will routinely be considered for funding only if the project can be viewed as a necessary activity to complete ongoing funded activities.

7. The activities shall be based on cooperation between a partner in Hungary (a factory, a technical institute, a private firm etc.) and a Danish partner. The objective is to transfer knowledge and technology in field of the environmental protection or natural resource management.

8. High priority is given to investment projects resulting in substantial emission reductions. Consequently, projects being co-financed will have a higher priority than projects financed exclusively by Danish grants. Projects, followed by national activities, e.g. regulation in order to provide the basis for a general implementation and/or dispersal of results, will have higher priority than single isolated projects. Project proposals will also be evaluated with reference to their relationship to supplementary national or international activities in the area, and the integration of the project into an environmentally and economically sustainable development.

9. Project proposals will be subject to independent review by the HMERP and the DEPA. Decisions on funding are based on negotiations between the two ministries and subsequent approval by the DEPA management.

Project Pipeline Activities

10. Within the sector priority areas the HMERP and the DEPA will initiate project identification and project preparation activities as part of a project cycle management. Danish and local consultants, institutions and organisations will be invited to participate through contracting and implementation.

11. Project Pipeline activities will basically follow the DANCED Project Management Manual (DEPA Project Preparation Manual 1995). Specific missions proposed for 1997 are listed for each Sector Priority Area below.

12. It is anticipated that within the four Sector Priority Areas special attention will be paid to projects:

• that produce results which will allow the HMERP to better prioritize and implement initiatives that benefit the environment and nature protection,
• that involve investments leading to significant pollution reductions and solid local institutional and/or financial involvement, and
• that are preparatory for decisions on national and international financing of environmental activities, including loan operations.

Sector Priority Areas

Air Pollution

13. In Central and Eastern Europe the DEPA has provided support to air pollution projects with focus on abatement intervention with regard to sulphur and nitrogen combustion, particles, ozone depleting substances, organic solvents, and substances from waste combustion. The DEPA wants further to enhance the efficiency with regard to supporting air quality improvements.

14. A project has therefore been initiated aiming at identifying a number of concrete interventions in six case countries. Hungary has been selected as a case country due to its significant air pollution problems. A project identification mission will be carried out to identify a range of priority projects, and specific Terms of References will be developed for three to five specific projects.

Renewable Energy

15. Two projects have been carried out in relation to renewable energy: Demonstration programme for Danish Straw- and Woodfired Plants in Hungary, and the Lászlo Németh Central-European Folk Academy in Sopron has received funding for a solar collector plant.

16. The main objective of the demonstration programme was to implement a wood-chip firing plant in Tata. The plant has now been running more than one year and has during this period shown good results.

17. In 1996 the World Bank (WB) approached the DEPA for possible Danish financing of the feasibility project entitled, "Potential Use of Biomass in Hungary" which is a component of the overall project entitled, "Renewable Energy and Regional Development in Hungary". The final decision will be made when the WB has provided the DEPA with further information.

18. Further renewable energy projects could also be identified by the identification mission.

Water Pollution

Tököl Airbase

19. Since 1991 the DEPA has assisted the HMERP in carrying out investigations and remedial actions in relation to the contamination on the Tököl Airbase near Budapest. The main objective has been to control and minimize further dispersion of contamination and to maximize recovery of free-phase jetfuel.

20. The activities of the first phase included investigations and preventive water abstraction, pumping tests, procurement, delivery and installation of pumps as well as sampling and analyses of water samples. The activities of the second phase have been divided into five project groups: The Risk Group, the Recovery Group, the Monitoring Group, the Model Group and the Bio Group.

21. The objective of the Bio Group was to demonstrate the possibilities of and create a basis for subsequent execution of biological in-situ remedial actions. In 1995 the DEPA received a proposal of full-scale bioremediation. As the Hungarian responsibility for the airbases has moved between state authorities, the evaluation of this proposal was on the Hungarian side strongly delayed.

22. In view of the drinking water resources nearby, the State Privatization and Holding Co. Ltd. by Shareholders, ÀPVRt. responsible for airbases applied for the permission of the Hungarian Public Health and Medical Officer’s Service to include biological degradation into the tender documents. Based on the "principle of precaution", biological degradation was not permitted.

23. The tendering procedure is still in progress. ÁPVRt. hopes to sign the contract on the remediation works by the end of 1997. Danish cooperation was one of the conditions in the invitation for tenders. Expert meetings between Danish experts and the Hungarian winner are envisaged to identify the distribution of tasks between the experts.

Lake Balaton

24. The World Bank has initiated the project entitled, "Lake Balaton Environment Project". The objective of this project is to support the long-term environmentally sustainable development of the Lake Balaton and its catchment area.

25. The World Bank has approached the DEPA for possible Danish financing of components within this project. Recently a short briefing meeting was held in Szentendre in connection to the PPC/EAP Task Force meeting where the DEPA, unfortunately, was unable to participate.

26. At a meeting between the DEPA and the Office of the Government Commissioner for the Lake Balation it became obvious that it was to early to identify specific tasks for cooperation but the subject could be relevant at a later moment.

Hazardous waste management

27. By choosing a waste strategy prioritizing minimization, toxicity and health damages special attention will be paid to hazardous waste.

28. The DEPA has provided support for the establishment of a hospital waste incination plant in Debrecen. The plant has now been working for almost one year.

29. In 1996, the Danish Environmental Support Fund for Central and Eastern Europe (DenSF) sent a Fact Finding Mission to Nitrokémia, one of the largest and most important chemical factories in Hungary. Nitrokémia had approached the Danish Embassy in Budapest asking for support from the DenSF for financing of a new waste incinerator.

30. The purpose of the Fact Finding Mission was to assess the possibilities of assisting Nitrokémia with solutions to the companyŽs and the region’s waste problems. A Draft Fact Finding Report has been submitted providing a thorough review of the companyŽs activities and an environmental assessment hereof.

31. For the moment the DEPA evaluates the results of this mission.

Nature Conservation

32. In 1995 the DEPA supported a project in the Hortobágy National Park. This project has been implemented successfully, and a proposal for a second phase will be drafted in 1998.

4.6 Latvia

State of the environment

The environmental problems in Latvia lie mainly within the fields of water, waste and contaminated sites, caused by the sins of the past. For years, waste water both from households and industry has been discharged without treatment of any kind. There are only few waste water treatment plants of western standard and they have only been established in connection with donor financed projects.

As regards the waste field, unnecessary large amounts of waste are produced by the industry and regulation of refuse is insufficient. All types of waste from towns and villages are disposed of at landfills where no specific pollution prevention measures are taken. Subsequently, pollution of soil, surface water and ground water is increasing.

Contaminated areas

The large number of contaminated areas is to a wide extent caused by uncontrolled pollution from different kinds of former military bases, including airports, ship yards, barracks and workshops. Add to this worn-down drinking water pipes and sewage systems, sporadic environmental regulation of agriculture, lack of general environmental legislation and an understaffed and poorly organized environmental administration.

Danish support - primary sectors

In the beginning, Danish support to Latvia was concentrated on various projects targeted at defining the extent of the environmental problems within different sectors. As mentioned in Table 6 below, the water sector was predominant accounting for 59 per cent of the Danish support of which approx. 50 per cent has been allocated to technical assistance and the remaining approx. 50 per cent to investments. In addition, the waste sector accounts for 15 per cent of Danish support.

The category "other" accounting for 9.7 per cent covers projects related to physical planning and institutional strengthening of the environmental administration. Earlier, Denmark was the largest donor in Latvia, but now Sweden has taken over as the largest donor: within the last year, Sweden has initiated some large-scale projects targeted at waste water treatment plants and water supply.

EU approximation

During 1997, three projects supporting approximation to EU legislation will be initiated.

4.6.1 Country programme for Latvia

Introduction

1. The Danish Environmental Support Fund for Central and Eastern Europe provides support to activities limiting pollution through air, soil, water and waste; supports the strengthening of the institutions responsible for or involved in physical planning and the efforts to reduce pollution; and supports efforts for the preservation of natural amenities.

2. The implementation strategy of the Environmental Support Fund is based on two main principles:

1. activities are concentrated geographically and focus on the areas where the greatest benefits to nature and environment can be achieved, and where the efforts can be achieved in a transparent and quick manner, and
2. activities are concentrated primarily in sectors where the Danish knowledge on the environment and technology to protect the environment and nature is especially competent to provide qualified assistance.

3. The objectives of the part of the programme to protect the environment and natural resources in Latvia have focused on a range of sector priority areas: Cleaner Technology, Institutional Strengthening, Hazardous and Solid Waste, Air Pollution, Water and Waste Water, Soil and Water Protection and Nature Protection. In addition, some follow-up activities to projects already implemented will also be initiated.

4. The co-operative mechanisms between the Latvian Ministry of Environmental Protection and Regional Development (LMOE) and The Danish Environmental Protection Agency (DEPA) have been further developed by the introduction of two annual project review rounds and by the employment of a Local Project Manager in the LMOE, funded by DEPA.

Project Proposal Procedures

5. Project proposals for funding of environmental activities in Latvia may be submitted to DEPA at any time, however new proposals not included in the attached pipeline may only expect to be subject to evaluation as per the closing dates March 31 and September 30.

6. Proposals should be prepared as outlined in the DEPA Publication "Orientering fra Miljøstyrelsen" No. 14, 1995. The technical content of the proposal shall include a description of the significance and the background of the problem, statements about how the Program Priority Criteria will be covered, a project description following the Logical Framework Approach including clear outputs and monitoring indicators, and a presentation of project participants and their qualifications.

7. Project proposal offeror should in advance make sure that the goals and the absolute main part of any proposed activities are within a sector priority area. Outside the sector priority area proposals will according to routine be considered for funding only if the project can be viewed as a necessary activity to complete ongoing funded activities or elsewise contributes significantly to the improvement of the environment.

8. The activities shall be based on co-operation between a partner in Latvia (a factory, a technical institute, a private firm, an administrative body etc.), and a Danish partner. The object is to transfer knowledge and technology in the field of the environmental protection or natural resource management.

9. High priority is given to investment projects resulting in substantial emission reductions. Consequently, projects being co-financed will have a higher priority than projects financed exclusively by Danish grants. Projects that will be followed by national activities, e.g. regulation, in order to provide the basis for a general implementation and/or dispersal of results will have higher priority than single isolated projects. Project proposals will also be evaluated with reference to their relationship to supplementary national or international activities in the area, and the integration of the project into an environmentally and economically sustainable development.

10. Project proposals will be subject to independent review by LMOE and DEPA. Decisions on funding are based on negotiations between the two ministries and subsequent approval by the DEPA management.

Project Pipeline Activities

11. Within the sector priority areas LMOE and DEPA have initiated project identification and project preparation activities as part of a project cycle management. Danish and local consultants, institutions and organisations will be invited to participate through contracting and implementation.

12. It is anticipated that within the Sector Priority Areas special attention will be paid to projects:

1. that produce results which will allow the Latvian Government better to prioritise and implement initiatives that benefit the environment and nature protection,
2. that involve investments leading to significant pollution reductions and solid local institutional and/or financial involvement, and
3. that are preparatory for decisions on national and international financing of environmental activities, including loan operations.

Sector Priority Areas

Cleaner Technology

13. Cleaner Technology is the designation used with reference to waste minimisation, cleaner production or pollution prevention. The context is rather broad and is not limited to strictly technical issues. Managerial and organisational issues are incorporated as well.

14. Cleaner Technology activities highlight private sector involvement and participation in waste minimisation and pollution prevention at the source level. Efficient implementation of Cleaner Technology requires a close and good-working relationship between private companies and authorities responsible for the environmental protection.

15. The main focus is on "source reduction" and other practices that reduce or eliminate the creation of pollutants through increased efficiency in the use of raw materials, energy, water or other resources. "Source reduction" is any practice which reduces the amount of any hazardous substance, pollutant, or contaminant entering any waste stream or otherwise released into the environment prior to treatment, disposal, or recycling.

16. The activities include: equipment or technology modifications, process or procedure modification, reformulation or redesign of products, and substitution of raw materials. Improvements in housekeeping, maintenance, training or inventory control that result in pollution prevention are included as well as energy recovery. Activities not included are recycling, treatment and disposal. Some practices commonly described as "in-process" recycling may qualify as cleaner technology because it can reduce the need for treatment or disposal, and conserve energy and resources.

17. The Environmental Support Fund has initiated two Cleaner Technology projects in Latvia in the metal-plating industry and in the fish-processing industry. This includes investment projects. In 1996, a more coherent Cleaner Technology Project in Latvia has been initiated. This involves negotiations between the Latvian Ministries of Environmental Protection and Industry, as well as with local industrial associations. The decision of initiating the project has been based on negotiations of a former application for funding of a comprehensive cleaner technology project including the machine building, breweries and fishery industries as well as a general approach to institutional strengthening of the LMOE and other relevant Latvian bodies in cleaner technology.

18. The ongoing cleaner technology project at a Latvian fish-processing industry will be investigated for the possibility of further dissemination of the technological improvements to the remaining 14 fish-processing industries in Latvia.

Institutional Strengthening

19. Institutional strengthening and capacity building are important on all levels in Latvia in the field of environmental protection, resource management and nature conservation. A significant part of the ongoing projects already implemented serve to strengthen national and local authorities and institutions, e.g. the projects concerning the Black Stork; ground water monitoring and protection; oil spill contingency; hazardous waste management; bioremediation of oil-contaminated soil; conservation of biodiversity in connection with sustainable development of agriculture; and the preparation of a national environmental health action plan.

20. The need for modernisation of the environmental regulations and laws of Latvia is outspoken, and several international initiatives have been started to improve this situation with the emphasis on the legislative framework. Still there is a serious need to renew the regulations with direct impact on the setting of environmental standards for the individual environmental sectors and industries.

21. The possibilities of furthering a project with the objective of improving this situation is currently being investigated by the LMOE and the DEPA.

22. The implications of preapproximation to EU-regulation of the Latvian system of environmental regulation have been investigated further and projects within the line of industrial pollution, water quality standards etc. have been identified and are under implementation in line with the overall DEPA approach to preapproximation in Eastern Europe.

Under Danish funding the Latvian Ministry for Environmental Protection and Regional Development has employed a local project co-ordinator to co-ordinate the co-operation between the Danish and Latvian ministries of environment. The appointment of such a co-ordinator has proven successful and constitutes a valuable contribution to the co-operation.

Hazardous and Solid Waste

23. Hazardous industrial waste and medical waste require special treatment or disposal to prevent aquifer or air contamination. As a consequence of unforeseeable accidents, past neglect, or lack of knowledge of sound environmental practices, certain locations in Latvia have become contaminated with hazardous and toxic substances or agents. These contaminants have permeated and adsorbed to soils, diffused to interstitial saturated zones, dissolved in ground waters and migrated to subsurface aquifers.

24. Hazardous Waste Treatment Facilities have been considered to be a priority for investment in the environment sector. However, the lack of a realistic, widely accepted programme has until recently hampered real progress. A Danish Support Fund supported feasibility study in 1992 recommended a Central Treatment Facility, but the cost of implementation stopped the process.

25. This situation was turned around as a result of two parallel projects funded by the Danish Support Fund and the EU-PHARE Cross Border Programme. The projects have elaborated a national strategy on hazardous waste management, including the disposal of existing pesticide amounts, and part of the implementation is currently taking place.

26. In a close co-operation between the LMOE, the Cross Border Programme and the Danish Support Fund the planning of the implementation and financing of the remaining investments is now under way with the intention of presenting a complete plan for the financing and implementation of a full-scale hazardous waste management system in Latvia.

27. The system will include the necessary regulations, an intermediate storage facility, trucks for waste collection, establishment of a privately operated company for the operation of the system, negotiated fees for delivery of waste and for the combustion hereof, renovation of a cement oven with the purpose of hazardous waste combustion, measures for the cleaning of exhaust gases from the oven to EU-standards as well as an environmental impact assessment of the whole hazardous waste management system.

28. The implementation is envisaged to be co-financed between the Latvian State Budget, the Cross Border Programme and the Danish Support Fund. Fees for delivery of waste to the system should pay for an increasing part of the total costs involved reaching full cost recovery after 6-7 years.

29. The Latvian Public Investment Programme includes considerable investments in the implementation of a national solid waste strategy and the LMOE has suggested the preparation of such a strategy as a subject to financial support from the Danish Support Fund. A project developing such a strategy has recently been finished.

30. The activities in solid waste will be co-ordinated with the World Bank with the purpose of directing the relevant parts of the study directly towards investment projects for reloading stations and land fills.

31. It has been the experience from previous years that the availability of well-prepared investment projects is decisive to the distribution of international grants between the Latvian ministries. The involvement of the Cross Border Programme in the financing of the hazardous waste management plan is an example. It is therefore the wish of the LMOE to create a number of well prepared investment projects within the solid waste sector in the form of feasibility studies producing draft, relevant tender documents for implementation when funding is available. Danish participation in the implementation phase of this project will be considered when the project has reached a further phase.

Nature Protection.

32. The Environmental Support Fund has funded the development and implementation of a management plan for Lake Pape and Jurkalne on the Latvian east coast and a project on sustainable forestry and forest planning; a project on Black Stork Sanctuaries; and biodiversity in connection with sustainable development of agriculture.

33. A project identification mission on Sustainable Forestry and Natural Resource Management in Latvia (as well as in Estonia, Kaliningrad, Lithuania, and Poland) has resulted in a significant number of identified concrete areas of future co-operation and project ideas to be further implemented into project documents during 1997.

Water and Waste Water:

34. Waste water has been the object of two projects supported by the Danish Support Fund. One (the "Small Town" project) including a low technology plant designed for 200 PE and a mechanical-biological plant designed for 2000 PE. In the Cesis Waste Water Project equipment for the waste water treatment plant and two pumping stations are supplied as a supplement to the grant from the Finnish Ministry of the Environment and the Latvian financing of the project.

35. Financial support has also been given to the upgrading of the Daugavapils Waste Water Treatment plant in connection with the World Bank operated Municipal Services Development Project.

36. In the town of Madonna a water supply and waste water project is currently being prepared by NEFCO for international co-financing between NEFCO, the DEPA and the EU Programme with a limited participation of the DEPA.

37. The LMOE is currently preparing a national strategy on waste water treatment with support from the Swedish SIDA under the working title 800+, referring to the number of treatment plants to be erected in Latvia. It has been suggested by the LMOE to start a "12 city" project on waste water treatment plants in small and medium size towns. Financial support is sought from the DEPA, the SIDA and the Finnish Ministry of the Environment with the intention of receiving support from each agency to 4-5 cities under a common project umbrella. The financing for the individual plant is planned to be divided between a budget line from a World Bank loan, the Latvian State Budget and one of the Nordic environmental support funds (DEPA, SIDA or the Finnish Min. of the Env.) with one third from each. The advantage of this model is the possibility of implementing a number of waste water plants in parallel but with different financing without the heavy administration between the supporting agencies seen in other co-financed projects.

38. The Danish Support Fund has considered the model and has financed feasibility studies for 4 - 5 small and medium sized towns (10.000 - 20.000 inh.). DEPA has furthermore decided to participate in the erection of two of the plants (Aizkraukle and Gulbene). During 1998, DEPA will consider to finance 5 more feasibility studies in smal towns in Latvia.

39. It has been the experience from previous years that the availability of well-prepared investment projects is decisive to the distribution of international grants (i.e. from the PHARE-programme) between the Latvian ministries. The involvement of the Cross Border Programme in the financing of the hazardous waste management plan is an example. It is therefore the wish of the LMOE to create a number of well prepared investment projects within the waste water sector in the form of feasibility studies producing draft, relevant tender documents for implementation when funding is available.

Air Pollution

40. The port of Ventsplis is the basis of export of Russian crude-oil in the magnitude of 15-20 million tons per year. In addition heavier oil is unloaded from rail tanks to oilterminals in the harbour area. The unloading, storage and loading of such an amount of oil creates significant air pollution with local and regional effects in the sense of direct toxic effects and the possible creation of smog. It also creates heavy soil pollution of the harbour area. Add to these pollution problems a complex of other pollution problems connected to ship transportation: oily ballast water, sludge, solid waste, vapour emission when tanks are filled etc.

41. The prospects of implementing measures against a significant part of this pollution are supported by a relatively short pay-back period for the investments needed.

42. Latvian harbour related environmental problems and solutions will further be included in DEPA-activities described in a separate programme for the sea transport sector during 1997 and 1998 by DEPA.

43. A promising project is being carried out with relation to environmental and energy facilities in small towns.

44. DEPA intends further to develop the activities in this area in co-operation with the LMOE and the Danish Energy Agency in order to help Latvia to promote energy production from wood chips. The benefits from such a project could include environmental sound energy production, regional development as well as better forest management.

Protection of Soil and Water

45. The DEPA has supported several projects in the area of protecting the soil against pollution. These projects include activities to establish protected zones for ground water, the establishment of a soil remediation treatment plant, assistance to create a legal framework for soil remediation, and remediation of oil polluted soil at the former Soviet airbase, Rumbula.

46. The protection of soil and water (especially ground water and surface water intended for drinking water) against pollution with oil products is only in its very beginning in Latvia. A number of existing pollutions are waiting to be dealt with, including former Soviet bases, railway areas and sites along the oil pipeline transversing Latvia.

47. The lack of environmentally safe installations, operation and maintenance of the operating facilities in the oil sector ranging from pipelines to petrol stations, and the absence of an efficient administrative system of regulations and control measures calls for improvement of the environmental performance of the sector as a whole.

48. One subject in the protection of soil against oil pollution is the crude-oil pipeline transporting oil to Ventspils. The pipeline starts from a terminal in Belarus and crosses the border between Latvia and Lithuania several times. The operation of the pipeline is connected with significantly environmental problems relating to inadequate maintenance, operation and theft leaving open holes in the pipeline. The management of the operating companies (one in each of the three countries) has been fined for illegal pollution several times and the pollution of soil and water from leakages is a problem that must be solved. The situation is similar to the product pipeline that follows the crude-oil pipeline some of the way.

49. On the other hand, there are indications that an improvement of the environmental performance of the pipeline will also include economic advantages for the pipeline in the sense of prolonged lifetime and lower repair costs in a long term perspective. It is the intention of the LMOE and the DEPA to further a feasibility study investigating the possibilities of a simultaneous improvement of the economic and the environmental performance of the pipeline through better maintenance, necessary repairs and the establishment of a leak detection system etc.

Other topics related to on-going activities

Oil Spill Abatement

50. A Project Document for preparation and implementation of a National Oil Spill Contingency Plan for Latvia has been developed. This activity includes an oil spill risk assessment, a review of existing oil spill combating facilities and an assessment of the necessary institutional set-up. Review of this Project Document is in process for implementation. Similar plans have been developed for Estonia and Lithuania. LMOE has agreed to seek co-operation with the Baltic Countries with respect to oil spill combatement.

51. A project preparation mission was launched during the fall of 1995 regarding the establishment of oil reception facilities in the main harbours in the Baltic countries. The results of this mission are expected to be proposals for projects in this field in Ventspils, Liepaja and Riga. A proposal for a project in Riga harbour has been sent to DEPA and the evaluation is still ongoing.

4.7 Lithuania

State of the environment

The most significant environmental problems in Lithuania, after the independence in 1991, are related to hazardous and household waste, contaminated sites such as landfills, old industrial sites and former military areas.

Decreased air pollution

Falling activity within the industry, transport and energy sectors has resulted in decreased air pollution. Moreover, termination of large polluting undertakings is expected to result in permanent environmental gains. Today, the most important sources of air pollution are transport (58 per cent), industry (25 per cent) and combined heat and power plants (12 per cent). Generally, air pollution is not considered a problem, but locally high concentrations may affect the environment.

Furthermore, the Lithuanian authorities have experienced great difficulties in protecting areas worth preserving and in establishing an effective environmental administration.

Danish efforts

In the beginning, Danish efforts were targeted at defining the nature and extent of the environmental problems in Lithuania in order to set the priorities of both Danish and Lithuanian efforts. In the beginning it was quite difficult to carry out investment projects, but after the first couple of years’ efforts, the IN projects now account for an increased percentage of the assistance granted. Table 7 shows the number of environmental projects in Lithuania supported by Denmark and amount granted.

Primary sectors

The primary sectors water, air and waste have accounted for more than 70 per cent of the Danish support. As appears from the table below, waste water cleaning has been the predominant sector. Danish investments have through co-financing with recipient country sources and/ or other donors or international financial institutions contributed to environmental investments of DKK 285 million during 1991-1996. In this connection, soft loans from the Danish State Export Credit Agency have financed interest-free 10 year loans for 12 waste water treatment plants, of which the Vilnius Waste Water Treatment Plant is the largest. Today, Denmark is the biggest donor of environment projects in Lithuania, and Lithuanian authorities have estimated the Danish share to 43 per cent of all foreign environmental assistance.

The category "other" primarily covers projects related to institutional strengthening and the Ignalina power plant.

EU approximation

Lithuania was the first Central and Eastern European country to receive Danish support for EU approximation. In 1996, support has been granted for two EU approximation projects.

4.7.1 Country programme for Lithuania

1. The Danish Environmental Support Fund for Central and Eastern Europe provides support to activities limiting pollution through air, water and waste, supports the strengthening of the institutions responsible for or involved in the efforts to reduce pollution, and supports efforts for the preservation of natural amenities.

2. The implementation strategy of the Environmental Support Fund is based on two main principles:

1. activities are concentrated geographically and focus on the areas where the greatest benefits to nature and the environment can be achieved, and where the efforts can be achieved in a transparent and quick manner, and
2. activities are concentrated primarily in sectors where Danish knowledge on the environment and technology to protect the environment and n7ature is especially competent to provide qualified assistance.

3. The objectives of the programme (to protect the environment and natural resources in Lithuania) will focus on the following priority areas:

1. Cleaner Technology,
2. Institutional Strengthening, including the EU-approximation,
3. Hazardous Waste,
4. Nature Protection,
5. Following-up Activities on Projects Running or already Implemented.

Minor activities will be undertaken in the energy sector (renewable energy) in close collaboration with the Danish Sectorial Programmes on Energy in the Ministry of Housing and the Danish Energy Agency. In Lithuania these activities will be undertaken in close collaboration with the Ministry of Economy.

Furthermore, minor activities will be undertaken in the fields of Surface Waters and Water Resources, Solid Waste, Oil Spill Abatement and Transportation.

4. Development of the co-operative mechanisms between the Environmental Protection Ministry of the Republic of Lithuania (EPML) and the Danish Environmental Protection Agency (DEPA) has been further developed by the introduction of two annual project review rounds and the employment of a Local programme Co-ordinator (LPC) in Lithuania, funded by the DEPA.

5.The responsibilities of the LPC are defined in the "Position Description", October 1996. The LPC represents the DEPA on all matters related to the Danish Support Fund’s Activities in Lithuania. The LPC will review and report on the progress of implemented activities, co-ordinate ongoing activities and assist in the preparation of new activities.

Project proposal procedure

6. Project proposals for funding of environmental activities in Lithuania may be submitted to the DEPA at any time, however new proposals will only be subject to evaluation as per the closing dates March 31 and September 30.

7. Proposals shall be prepared as outlined in the DEPA publication "Orientering fra Miljøstyrelsen", No. 14, 1995. The technical content of the proposal shall include a description of the significance and background of the problem, statements about how the Programme Priority Criteria will be covered, a project description according to the Logical Framework Approach including clear outputs and monitoring indicators, and a presentation of project participants and their qualifications.

8. Project proposal offerors shall in advance make sure that the goals and the absolute main part of any proposed activities are within a sector priority area. Outside the sector priority area, proposals will routinely be considered for funding only if the project can be viewed as a necessary activity to complete ongoing activities, or if the projects can at present facilitate an implementation of environmental sub-programmes.

9. The activities shall be based on co-operation between a partner in Lithuania (a factory, a technical institute, a private firm etc.) and a Danish partner. The object is to transfer knowledge and technology in the field of the environmental protection or natural resource management.

10. Project proposals will be subject to independent review by the EPML and the DEPA. Decisions on funding are based on negotiations between the two ministries and subsequent approval by the DEPA management.

11. The priority of the projects would mainly be:

• Investment projects resulting in substantial emission reductions,
• Projects being co-financed will have a higher priority than projects financed exclusively by Danish grants,
• Projects followed by national activities, e.g. regulation, in order to provide the basis for a general implementation and/or dispersal of results will have higher priority than single, isolated projects. Project proposals will also be evaluated with reference to their relationship to supplementary national or international activities in the area, and the integration of the project into an environmentally and economically sustainable development.

Tendering procedure

12. Up to now, the tendering procedure has only been applied a few times in Lithuania. Together with an increased application of project identification procedure, the tendering procedure will probably be used more regularly in the future. Identification of the projects should be formulated in a way which make them appropriate for tendering in a broader forum (terms of reference or project documents). This includes an estimation of the budget. The TORs or project documents shall be prepared as outlined in DANCED’ Guidelines for Projects Preparation, 1996.

13. The TORs or project documents will be subject to review by the EPML and the DEPA. Decisions on tendering of the projects are based on negotiations between the two ministries and subsequent approved by the DEPA Management.

Project pipeline activities

14. Within the sector priority areas the EPML and the DEPA will initiate project identification and project preparation activities as part of a project cycle management. Danish and local consultants, institutions and organisations will be invited to participate through contracting and implementation.

15. Project Pipeline activities will basically follow the DANCED Project Management Manual, 1995. Specific missions already planned for 1997 are listed for each priority area below.

16. It is anticipated that in the sector priority areas special importance will be attached to projects:

• that produce results which will allow the Lithuanian Government better to prioritize and implement initiatives that benefit the environment and nature protection,
• that involve investments leading to significant pollution reductions and solid local institutional and/or financial involvement, and
• that are preparatory for decisions on national and international financing of environmental activities, including loan operations.

Sector priority areas

Cleaner Technology

17. Cleaner Technology is the designation used with reference to waste minimisation, cleaner production or pollution prevention. The context is rather broad, and is not limited to strictly technical issues. Managerial and organisational issues are incorporated as well.

18. Cleaner Technology activities highlight private sector involvement and participation in waste minimisation and pollution prevention at the source level. Efficient implementation of cleaner technology requires a close and a good-working relationship between private companies and authorities responsible for the environmental protection.

19. The main focus is on "source reduction" and other practices that reduce or eliminate the creation of pollutants through increased efficiency in the use of raw materials, energy, water or other resources. "Source reduction" is any practice which reduces the amount of any hazardous substance, pollutant or contaminant entering any waste stream or otherwise released into the environment prior to treatment, disposal or recycling.

20. The activities include:

• equipment or technology modifications,
• process or procedure modifications,
• reformulation or redesign of products, and
• substitution of raw materials

Improvements in housekeeping, maintenance, training or inventory control that result in pollution prevention are included as well as energy recovery. Activities not included are recycling, treatment and disposal. Some practices commonly described as "in-process" recycling may qualify as cleaner technology because it can reduce the need for treatment or disposal, and conserve energy and resources.

21. The Environmental Support Fund has initiated five cleaner technology projects in Lithuania specifically in the metal plating industry and the meat-processing industry.

22. A project identification mission is scheduled to take place in the spring of 1997. The objectives of the mission is to assist the Lithuanian Environmental Protection Ministry to prepare a cleaner technology programme and formulate documents. The cleaner technology programme and draft project documents will be negotiated by the EPML and the DEPA.

23. All project proposals will, after the approval of the cleaner technology programme by the EPML and the DEPA, be evaluated within the field of the programme.

Institutional Strengthening

24. Institutional strengthening and capacity building are important at all levels in Lithuania in the field of environmental protection, resource management and nature conservation. A significant part of the ongoing projects already implemented serve to strengthen local authorities and institutions, e.g. the following projects: Environmental Action Plan for the Lithuanian Railways, Waste Management Plan in Kaunas and Vilnius, and Integration of Environmental Values in Lithuanian Forestry.

25. In 1996, the Environmental Support Fund has supported an identification mission on Strengthening the Framework and Administration of Lithuania’s laws on Waste Management and the Environmental Management in Industry. The objectives were to facilitate the creation of a coherent waste/public administration in Lithuania, to promote the development of a flexible, result-oriented approach towards permitting and managing of industrial pollution in Lithuania, and to provide the basis for approximating Lithuania’s laws on waste management and industrial pollution to EU requirements.

26. The mission mentioned in section 25 has pointed at the following areas of interest for capacity building:

• landfill management,
• solid waste management in selected municipalities,
• hazardous waste management,
• training programmes for municipal waste engineers
• development of environmental permitting and controlling of industrial facilities, and
• support to environmental management in enterprises.

27. Lithuania has applied for admission in the EU. The objective of the Danish assistance within the field of EU-approximation is to promote the possibilities of the associated countries, including Lithuania, to approach the national environmental legislation to that of the EU and to strengthen the administrative and institutional capacity and thereby being able to implement and to comply with the requirements of the EU in practice.

28. The DEPA foresees two types of projects. One type should be referred to as horizontal projects, e.g. projects designed to support the receiving country in elaboration of an overall approximation strategy and/or different methods and organizational structures to support the approximation. The other type of projects should be referred to as vertical projects, e.g. programmes for specific sectors starting with the transposition of the environmental demands of the EU and continuing with technical programmes with the objective to develop the administrative capacity and other tools for implementation and enforcement of the law.

29. The projects in the field of EU-approximation will mainly be identified in co-operation between the DEPA and the EPML. The projects will probably be implemented by tendering.

30. A mid-term report on the establishment of the DEPA-funded LPC in the EPML concludes that the institutional strengthening has been improved since the employment of the LPC. Representatives of municipalities, consulting companies and industries indicated that the LPC has improved its access to information and enhanced the chances to play an active role in the Danish-Lithuanian Co-operation.

31. In 1996, the Danish Environmental Support Fund has initiated 2 projects in the field of institutional strengthening. In 1996, the focus has been on the EU-approximation with special importance attached to the strengthening of the Environmental Protection Ministry’s capacity and implementation of EU waste requirements, and the IPPC directives/EMAS regulations within the industrial sector.

32. In 1997, the main focus will continue to be on the EU-approximation process. Further, there is a need for strengthening the Environmental Information Technology within and between the administrative levels of the Ministry, including hardware and software support. Finally, minor activities will be undertaken in the field of supporting the EPML to implement the Country Programme for Phasing Out Ozone Depleting Substances.

Hazardous Waste

33. Hazardous industrial waste and medical risk waste require special treatment or disposal to prevent aquifer or air contamination. As a consequence of unforeseeable accidents, past neglect, or lack of knowledge of sound environmental practices, certain locations in Lithuania have been contaminated with hazardous and toxic substances or agents. These contaminants have permeated and absorbed to soils, diffused to interstitial saturated zones, dissolved in ground waters and migrated to subsurface aquifers.

34. Hazardous Waste Treatment Facilities have been considered a priority for investment in the environment sector. However, lack of a realistic, widely accepted programme has hampered real progress. A Danish Support Fund-supported feasibility study in 1992 recommended a Central Treatment Facility which was adopted by the Lithuanian Government. The cost of the implementation and the failure to establish a National Waste Management Company stopped the process. It is the general opinion that the needs are best met by a low cost, practical system that removes immediate risks by creating basic low-technology treatment facilities, safe storage sites and a secure landfill.

35. In 1996, the Danish Environmental Support Fund has co-financed one project initiated by the Japanese Special Fund on technical and managerial training and institutional capacity building of hazardous waste management.

36. In 1997, the strategy for funding will continue to follow the outline from 1996. Based on the results from the Hazardous Waste Management Study funded by PHARE, special importance will be attached to create low-technology treatment facilities and to remediate and clean up activities of areas considered as a risk to human health.

Nature Protection

37. The most urgent problems in the field of sustainable nature management can be divided into four categories:

• Management, use and protection of landscape and biodiversity
• Sustainable forest management
• Development of ecotourism and
• Environmental education and awareness-raising

38. At present, the specific objective for the Danish assistance to Lithuania in the field of nature protection (regional parks) is to strengthen the institutional management of protected areas at central and regional level, and to promote sustainable forest management and protect the forest biodiversity.

Renewable Energy

39. A limited number of projects have been carried out with relation to energy saving and Renewable Energy, i.e. Klaipeda Geothermal Demonstration Project and Biogas Demonstration Plants in Rokai. Other energy related activities have been undertaken in Kaunas (district heating).

40. Regarding safe production of energy, projects to improve the safety of the Ignalina Nuclear Power Plant have been initiated.

41. In 1997, focus in the energy sector (renewable energy) will mainly be on activities promoting energy production from sources other than nuclear energy.

Other

Waste Water Treatment

42. The Danish Environmental Support Fund has been significantly active in the waste water sector in Lithuania. Projects have been initiated at the four HELCOM Hot Spots in the country, and a wide variety of purification techniques, sludge handling techniques, and plant design have been demonstrated ranging from rather small low-technology plants (25-100 P.E.) to the large Vilnius Waste Water Treatment Plant (800.000 P.E.). In 1996, it has been agreed that the future activities in the Lithuanian Waste Water Sector should mainly be the responsibility of the Lithuanian Government.

Surface Waters and Water Resources

43. Present activities on surface waters and water resources have been undertaken in projects aiming at Surface Water Monitoring and Planning, Water Supply in Vilnius, and Clean-up at the Siauliai Air Base. A project is under review regarding Ground Water Monitoring and Planning. Other significant activities are not foreseen in this area besides specific contaminated soil clean-up activities. Measures to demonstrate and implement water saving will be undertaken in the Cleaner Technology Activities.

Solid Waste

44. Present activities have been focusing on solid waste managing, including improved systems for solid waste handling and disposal in conventional landfills (Kaunas area). Future activities on solid waste management may be continued in the light of the results of the approximation project regarding the Framework and Administration of Lithuania’s Laws on Waste Management.

Oil Spill Abatement

45. The Danish Support Fund has initiated preparation and implementation of a National Oil Spill Contingency Plan for Lithuania as well as for Estonia and Latvia. This activity includes oil spill risk assessment, a review of existing oil spill combating facilities and an assessment of the necessary institutional set-up. Other significant activities are not foreseen in this area.

46. Present activities have been focusing on solid waste management including improved systems for solid waste handling and disposal in conventional landfills (Kaunas area). Future activities on solid waste management will be tied up to this activities.

Transport

47. Transport pollution contributes about 70% of all emissions into the atmosphere. At present, the Ministry of Transport is preparing a study "Transport and Environmental Protection" which is expected to be finished in mid 1997. The implementation of the study will require significant local and international commitments. The Environmental Protection Ministry will hold considerable responsibility in the implementation process. Therefore, possible co-operation could be initiated with regard to management of traffic in cities, introduction and encouragement of cleaner or alternative fuel and implementation of EU-requirements in the transport sector.

4.8 Poland

Danish assistance

Due to the size of Poland, geographical location close to Denmark and relatively fast political and economic restructuring, Poland has received support for a large number of projects. The following target areas have been given priority: waste water treatment, water supply, air pollution, nature protection and cleaner technology.

During 1991 to 1996, 136 projects have been carried out at a cost of DKK 341.7 million, see Table 8. Investment projects accounted for 70 per cent of the Danish support granted. The Danish support has altogether generated DKK 1.8 billion in the form of co-financing through funds, banks, international financial institutions and own financing.

Primary sectors

Water and air sector projects account for 80 per cent of the Danish support. Approx. 15 per cent of the support has been divided equally between projects in the waste and nature protection sectors.

Water

More than 50 per cent of all projects focus on the water sector, primarily waste water treatment. Even though Poland acts as drainage area for the Baltic, efforts have primarily been concentrated on selected regional river basins. Danish environmental support to waste water treatment plants has, inter alia, contributed to a reduction of approx. 2 million person equivalents. However, Poland will still require assistance in establishing and improving waste water treatment facilities to comply with the EU Urban Waste Water Directive.

Air pollution

Air pollution control is another important target area. Within the power plant sector, Danish support has contributed to a 135,000 tons/year reduction of sulphur dioxide which corresponds to more than 80 per cent of total Danish emissions in 1994. Continued significant environmental improvements can be obtained by investing in air pollution reduction measures.

4.8.1 Country programme for Poland

Introduction

1. The Danish Environmental Support Fund for Central and Eastern Europe provides support to activities limiting pollution through air, water and waste, supports the strengthening of the institutions that are responsible for or involved in the effort to reduce pollution, and supports efforts for the preservation of natural amenities.

2. The implementation strategy of the Environmental Support Fund is based on two main principles:

1. activities are concentrated geographically, and focus is established on the areas where the greatest benefits to nature and the environment can be achieved, and where the efforts can be achieved in a transparent and quick manner, and
2. activities are concentrated primarily in sectors where the Danish knowledge on the environment and technology to protect the environment and nature is competent to provide qualified assistance.

3. The objectives of the part of the programme to protect the environment and natural resources in Poland have focused on four sector priority areas: Water and Waste Water, Air Pollution and Energy, Cleaner Technology, and Nature Protection. Minor activities will be undertaken in other sectors, and some follow-up activities on projects already implemented will also be initiated.

4. The co-operative mechanisms between the Ministry of Environmental Protection, Natural Resources and Forestry of Poland (MEP) and the Danish Environmental Protection Agency (DEPA) have been further developed by the establishment of a Working Group supervised by a Steering Committee.

5. The Steering Committee formulates the general policy for the Polish-Danish co-operation. Any changes in the strategy must be confirmed by the Steering Committee, and the Committee will also be responsible for the implementation of necessary adjustments in the priority areas.

6. The Working Group shall be responsible for the implementation of the strategy decided by the Steering Committee. The decisions made by the Working Group should be confirmed by the head of the Steering Committee from each country. The Working Group will review and report on the progress of implemented activities, co-ordinate ongoing activities and assist in the preparation of new activities.

Project Proposal Procedures

7. Project proposals for funding of environmental activities in Poland may be submitted to DEPA at any time. However, new proposals will only be subject to evaluation in connection with meetings in the Working Group to be held on an ad hoc basis approximately four times per year.

8. Proposals should be prepared as outlined in DEPA Publication "Orientering fra Miljøstyrelsen" no. 14, 1995. The technical content of the proposal shall include a description of the significance and the background of the problem, statements about how the Program Priority Criteria will be covered, a project description following the Logical Framework Approach, including clear outputs and monitoring indicators, and a presentation of project participants and their qualifications.

9. The Project proposal offeror should in advance make sure that the goals and the absolute main part of any proposed activity are within a sector priority area. Outside the sector priority area proposals will be considered according to routine for funding only if the project can be viewed as a necessary activity to complete ongoing funded activities.

10. The activities shall be based on co-operation between a partner in Poland (a factory, a technical institute, a private firm etc.), and a Danish partner. The objective is to transfer knowledge and technology in the field of environmental protection or natural resource management.

11. High priority is given to investment projects resulting in substantial emission reductions. Projects being co-financed will have a higher priority than projects financed exclusively by Danish grants. Projects that will be followed by national activities, e.g. regulation, in order to provide the basis for a general implementation and/or dispersal of results will have higher priority than single isolated projects. Project proposals will also be evaluated with reference to their relationship to supplementary national or international activities in the area, and the integration of the project into an environmentally and economically sustainable development.

12. Project proposals will be subject to independent review by MEP and DEPA. Decisions on funding are based on negotiations in the Working Group and subsequent approval by the relevant bodies, i.e. the DEPA management.

Project Pipeline Activities

13. Within the sector priority areas MEP and DEPA will initiate project identification and project preparation activities as part of a project cycle management. Polish and Danish consultants, institutions and organisations will be invited to participate through contracting and implementation.

14. Project Pipeline activities will basically follow the DANCED Project Management Manual (DEPA Project Preparation Manual 1995).

15. It is anticipated that within the Sector Priority Areas special attention will be paid to projects:

1. that produce results which will allow the Polish Government better to prioritise and implement initiatives that benefit the environment and nature protection,
2. that involve investments leading to significant pollution reductions and solid local institutional and/or financial involvement, and
3. that are preparatory for decisions on national and international financing of environmental activities, including loan operations.

Sector Priority Areas

Water and Waste Water

16. Water: A major part of the completed and ongoing projects regarding water has dealt and deals with receiving water, river modelling, coastal areas etc. Only very few projects have concerned water saving or protection of drinking water reservoirs. Applications concerning the latter two types of projects will be given a higher priority.

17. Projects regarding impact assessments of water catchments will still be interesting, but should in future include a major Polish involvement, as most of the computer models necessary are already transferred to Poland, and the training needed to run the models is already given to quite a few Polish engineers. A single interesting project could be monitoring of the River Bug in co-operation with Belarus and Ukraine.

18. Contaminated soil clean-up activities in connection with protection of ground water resources have been very limited in Poland. A project concerning Bagisz Airbase near Kolobrzeg was initiated in the spring of 1996. A mission with the purpose of identifying more projects could be launched in 1996 or 1997.

19. Waste water: The Danish Environmental Support Fund has been significantly active in the Waste Water Sector in Poland. However, very few projects have been initiated in the HELCOM Hot Spots in the country. A wide variety of purification techniques, sludge handling techniques, and plant designs has been demonstrated, ranging from rather small low-technology plants (25-100 P.E.) to the large Zielona Gora waste water treatment plant (200,000 P.E.).

20. The waste water treatment plants implemented are widely spread; both geographically and in size. The Working Group will elaborate a strategic plan for the waste water sector, in which it will be stated if a certain area is to be given higher priority than others, if a certain size is preferable, if certain technologies should be furthered etc. In specific cases, initiatives will be taken to develop closer co-operation with international financial institutions in order to utilise part of the grant money in connection with larger plants (e.g. HELCOM Hot Spots) co-financed by e.g. the World Bank or EBRD. Projects concerning low cost upgrading of existing waste water treatment plants should be furthered as well.

21. Future activities in the Waste Water Sector should be within the frame of the strategic plan and will be initiated by the Working Group.

Air Pollution and Energy

22. Air Pollution: In connection with the energy production sector in Poland, a number of projects have been executed in order to reduce air pollution, e.g. desulphurization plants and Low NO_x burners at power plants.

23. Based upon Polish priority lists e.g. regarding most polluting power plants interesting projects could be identified by the Working Group and put into tender. A project identification mission could be launched in 1996 or 1997.

24. Energy: A limited number of projects have been carried out with relation to energy saving and renewable energy, e.g. wind power and biogas plants. Other energy related activities, such as district heating, have been undertaken.

25. DEPA intends to develop further the activities in this area in close co-operation with the Danish Energy Agency in order to help Poland promote energy production from sources other than coal. Special attention will be given to projects regarding geothermal energy and district heating. In the field of the climate convention, a plan could as well be elaborated for further discussion.

26. During 1996 the setting up of an education and information programme concerning incineration plants will be initiated. The target group will be the Polish population, Polish NGOs and politicians who worry about the risks of locating new plants near towns.

Cleaner Technology

27. Cleaner Technology is the designation used with reference to waste minimisation, cleaner production or pollution prevention. The context is rather broad and is not limited to strictly technical issues. Managerial and organisational issues are incorporated as well.

28. Cleaner Technology activities highlight private sector involvement and participation in waste minimisation and pollution prevention at the source level. Efficient implementation of Cleaner Technology requires a close and good-working relationship between private companies and authorities responsible for the environmental protection.

29. The main focus is on "source reduction" and other practices that reduce or eliminate the creation of pollutants through increased efficiency in the use of raw materials, energy, water or other resources. "Source reduction" is any practice which reduces the amount of any hazardous substance, pollutant, or contaminant entering any waste stream or otherwise released into the environment prior to treatment, disposal, or recycling.

30. The activities include: equipment or technology modifications, process or procedure modification, reformulation or redesign of products, and substitution of raw materials. Improvements in housekeeping, maintenance, training or inventory control that result in pollution prevention are included as well as energy recovery. Activities not included are recycling, treatment and disposal. Some practices commonly described as "in-process" recycling may qualify as cleaner technology because it can reduce the need for treatment or disposal, and conserve energy and resources.

31. The Environmental Support Fund has initiated a number of Cleaner Technology projects in Poland specifically in the textile industry and the food processing industry. This includes investment projects. Until a Cleaner Technology Strategy has been developed, the Working Group will make its decisions on each individual project.

Nature Protection

32. The Environmental Support Fund has funded projects concerning the Vistula Lagoon and some of the Polish National Parks. It is a strong wish from Polish and Danish side to strengthen the involvement in Nature Protection.

33. An ongoing project identification mission on Sustainable Forestry and Natural Resource Management in Poland (as well as in Estonia, Kaliningrad, Latvia, and Lithuania) will result in a limited number of identified concrete areas of future co-operation and project ideas to be further developed into project documents during 1996.

Other Topics Primarily Related to On-Going Activities

Solid Waste

34. Present activities focus mainly on management of solid waste from households, including improved systems for handling and disposal in conventional landfills. Future solid waste management activities will be tied to the completion of part of the above mentioned activities.

Training and Education

35. Training activities have been carried out in the waste water sector and in the sector concerning water management. However, the major part of the training activities has taken place in connection with the implementation projects in all sectors. Future training or education activities will only be initiated in connection with other projects.

Poland's Approximation to EU-Regulations

36. It is a strong wish from both Polish and Danish side to formulate a project that aims at advising and assisting Poland in the necessary reformulating of laws and regulations in the environmental sector in order to adjust these to EU-standards. The Working Group has initiated this work in the spring of 1996.

4.9 Romania

Danish assistance

Late 1993, co-operation with Romania was initiated through a TA project targeted at phasing out ozone depleting substances. The purpose of the project was to draw up a Romanian strategy for phasing out ozone depleting substances and thereby make Romania eligible for support from the multilateral fund under the Montreal Protocol. Subsequently, Romania has received a USD 2.3 million grant from this fund.

In April 1995, the second project, preparation of a Romanian national environmental action plan (NEAP), commenced. In this connection, Danish assistance was part of international assistance to Eastern Europe, each donor country undertaking the responsibility to draw up such a national environmental action plan.

In 1996, Danish support increased significantly with the allocation of DKK 18 million to 7 new projects. Altogether 11 projects have been initiated in Romania at a cost of DKK 30.5 million. Only few projects have yet been completed in Romania.

4.9.1 Country programme for Romania

Introduction

1. The Danish Environmental Support Fund for Central and Eastern Europe provides support to activities limiting pollution of air and water, waste, strengthening of the institutions responsible for or involved the effort to reduce pollution, and supports efforts for the preservation of nature.

2. The strategy of the Environmental Support Fund is based in the implementation on two main principles :

• activities to be concentrated geographically and to cover the areas where the greatest benefits to nature and environment can be achieved, and where the efforts can lead to visible and quick results
• activities to be concentrated primarily in sectors where the Danish knowledge on the environment and technology to protect the environment is competent to provide qualified assistance.

3. On the 10-^th of January 1994 an agreement between the Ministry of Waters, Forests and Environmental Protection of Romania and the Ministry of Environment of Denmark on co-operation in the field of environmental protection was signed. Both Ministries decided to develop and to encourage the collaboration in the field of environmental protection.

4. The Country Programme must be continuously developed and updated.

Way of Co-operation

5. The Ministry of Waters, Forests and Environmental Protection (MWFEP) and the Danish Environmental Protection Agency (DEPA) must collaborate directly.

6. The DEPA Co-ordinator for Romania (DCC) will represent the DEPA on all matters related to the Danish Support Fund activities in Romania. The DCC will review and report on the progress of implementing activities, co-ordinate ongoing activities and assist in the preparation of some new activities. The DCC can nominate persons to be responsible, in specific projects, on his/her behalf.

7. Both MWFEP or responsible Ministries from Romania and DEPA will nominate, project by project, persons to be responsible for the daily activity.

Project Proposal Procedures

8. Project proposals for funding by DEPA of environmental activities in Romania may be submitted to DEPA at any time. New proposals which are not included in common interest areas will be subject of analysis at meetings between MWFEP and DEPA.

9. Project proposals must be prepared as outlined in the DEPA Publication "Orientering fra Miliostyrelsen" No. 14, 1995. The content of the proposal must include a technical description presenting the problem which will be solved, to specify the way it integrates itself with the problem mentioned in article 1, to include a project description following the Logical Framework Approach including clear outputs and monitoring indicators, and a presentation of project participants and their qualifications.

10. The objectives and main activities proposed in the project must be within the sector priority area. Proposals outside the priority areas mentioned in article 1 and outside the Priority Projects will be considered for funding only if the project represents a necessary activity to complete ongoing funded activities, if there is a relatively high degree of co-financing and if the funds are still available.

11. The activities will be based on co-operation between a partner in Romania (a factory, a technical institute, a private firm, an administrative body, etc.) and a Danish partner named by DEPA. The objective is to transfer knowledge and technology in the field of environmental protection or natural resource management.

12. Priority is given to projects resulting in substantial emission reductions. Projects being co-financed by the Romanian part will have priority compared to projects financed exclusively by the Danish part. Projects that will be followed by regulations at national level in order to provide the basis for a general implementation and/or dispersal of results, will have higher priority than single isolated projects. Project proposals will be evaluated also with reference to their relationship to other national or international activities in the area, and the integration of the project into an economically sustainable development.

13. Project proposals will be subject to detailed analysis by MWFEP and DEPA.

14. All the proposals of the projects have to be evaluated and approved by the responsible Ministries and by DEPA. The MWFEP will approve the environmental problems included in the project proposal, afterwards the project will be co-ordinated by the responsible Ministry.

Priority Projects

15. National Environmental Action Plan (NEAP)

In 1995, the Ministry of Waters, Forests and Environmental Protection of Romania, with the support from DEPA, elaborated the "National Environmental Action Plan" where more than 100 short-term environmental priority projects are mentioned. The National Environmental Action Plan (NEAP), with Danish support, will be updated in 1997 . In this sense:

• It is recommendable to prepare an Investment Project Portfolio with the starting point in the updated NEAP, by elaborating the necessary documentation. It will thus be much easier for donors, banking organizations, etc. to finance environmental priority projects.
• It is desirable that some of the projects from the NEAP to be introduced in the Country Programme, according to the priorities mentioned above. In this sense, it will be given attention to the cement industry from Romania, in order to reduce air pollution.

16. Local Environmental Action Plan (LEAP)

The need for Local Environmental Action Plan is obvious. The programmes will be elaborated at county level in co-operation with the local environmental protection agencies, local public administration authorities, the management of the involved companies, NGOs, etc. and in will be identified environmental priority projects at county level. In this sense :

• It will be taken into consideration the possibility of elaborating some LEAPs
• Some of the priority projects identified in the LEAPs will be implemented in the Country Programme, according to the priorities mentioned above.
• The first selected county as a local priority area in this co-operation is Neamt county. The Danish part proposed this local area in the summer of 1996 because here existed already ongoing projects and there is a good co-operation with the local authorities and non-governmental organizations.

4.10 Russian Federation

Due to the political situation in Russia, co-operation with Russia was not initiated until 1992, and in January 1993 an agreement between Denmark and Russia on environmental co-operation was signed.

Danish assistance

Efforts have been concentrated around the Russian Baltic Sea catchment area and Moscow. During 1992 to 1996, 46 projects received DKK 155.5 million from the DESF, see Table 10. Total co-financing by the recipient and other sources accounted for approx. DKK 430 million.

Water

Approximately 50 per cent of the Danish support was allocated to projects within the water sector in the Russian Baltic Sea catchment area. Furthermore, water projects account for the largest share of the investment projects (IN), more than 70 per cent of Danish support to IN projects in Russia.

In the wastewater sector, the DESF facility thus supported renovation and improvement of several of the large waste water treatment plants, for instance in the cities of Pskov, Novgorod and Kaliningrad. In the two largest cities, St. Petersburg and Moscow, the DESF supported a large water investment programme under EBRD and the renovation of the Kuryanovo waste water treatment plant which is the world’s biggest plant with a capacity of more than 3 million m³ a day.

Air pollution

Another important target area is air pollution control, accounting for approx. 17 per cent of the total Danish support. From now, efforts in this area will be intensified especially in the St. Petersburg region where a project identification mission was carried out recently.

Other sectors

Other target areas have been given priority, too, such as disposal of domestic as well as hazardous waste, nature protection, environmental problems in agriculture and institutional strengthening.

4.10.1 Country programme for the Russian Federation

Introduction

1. The Danish Environmental Support Fund for Central and Eastern Europe provides support to activities limiting pollution through air, water and waste, support the strengthening of the institutions that are responsible or involved with the effort to reduce pollution, and support efforts for the preservation of natural amenities.

2. The implementation strategy of the Danish Environmental Support Fund is based on two main principles:

• Activities are concentrated geographically and focus is established in the areas where the greatest benefits to nature and the environment can be achieved, and where the efforts can be achieved in a transparent and quick manner, and
• Activities are concentrated primarily in sectors where the Danish knowledge on the environment and technology to protect the environment and nature is especially competent to provide qualified assistance.

3. This program focuses on the part of the Environmental Support Fund directed towards the Russian Federation in general. In addition, similar programs have been made for the priority areas, St. Petersburg City and Leningrad Region and Kaliningrad. All three programs are based on the principles laid down in the bilateral agreement between the Russian Federation and Denmark from 1993. In principle, the bilateral arrangements with St. Petersburg/the Leningrad Region and Kaliningrad forms part of this agreement.

4. The objectives of this programme will geographically focus on the parts of the Russian Federation outside the above-mentioned priority areas, where bilateral programs will be established. Sectorally the programme is focused on the following priority areas: Water Pollution and Treatment, Waste and Waste Management, Cleaner Technology, Air Pollution, Institutional Strengthening and Nature. In addition, some follow-up activities to projects already implemented will also be initiated.

5. The development of the co-operative mechanisms between the Russian Federation and the Danish Environmental Protection Agency (DEPA), and the approval of concrete initiatives, will take place during two annual meetings between the Ministry Environmental Protection and Natural Resources of the Russian Federation (MEPNR) and DEPA. In between of those meetings projects can be approved by written procedure.

6. All matters related to exemption from payment of duties to the Russian Federation (taxes, VAT etc.) must be handled by the Commission for International Humanitarian Aid and Technical Assistance of the Government of the Russian Federation.

Project Proposal Procedures

7. Project proposals for funding of environmental activities in the Russian Federation may be submitted to DEPA at any time. New proposals will be subject to evaluation at the co-ordinating meetings between the two ministries, or, upon a joint agreement by the two ministries, by written procedure in between the meetings.

8. Proposals have to be developed as outlined in DEPA Publication "Orientering fra Miljøstyrelsen" no. 14, 1995. The technical content of the proposal shall include a description of the significance and the background of the problem, statements about how the Program Priority Criteria will be covered, a project description following the Logical Framework Approach including clear outputs and monitoring indicators, and a presentation of project participants and their qualifications.

9. A project proposal offeror should in advance make sure that the goals and the absolute main part of any proposed activities are within a sector priority area. Outside the sector priority area proposals will routinely be considered for funding only if the project can be viewed as a necessary activity to complete ongoing funded activities.

10. Activities based on co-operation between a Russian and a Danish partner will be prioritized. The object is to transfer knowledge and technology in the field of the environmental protection or natural resource management.

11. High priority is given to investment projects resulting in substantial emission reductions. Consequently, projects being co-financed will have a higher priority than projects financed exclusively by Danish grants. Projects that will be followed by national activities, e.g. regulation or similar institutional strengthening activities, education and training, in order to provide the basis for a general implementation and/or dispersal of results, will have higher priority than single isolated projects. Project proposals will also be evaluated with reference to their relationship to supplementary national or international activities in the area, and the integration of the project into an environmentally and economically sustainable development.

12. Project proposals will be subject to independent review by the MEPNR and DEPA. Decisions on funding are based on negotiations between the two ministries and subsequent approval by the DEPA management.

Project Pipeline Activities

13. Within the sector priority areas the MEPNR and DEPA will initiate project identification and project preparation activities as part of a project cycle management. Danish and local consultants, institutions and organisations will be invited to participate through contracting and implementation.

14. Project Pipeline activities will basically follow the DANCED Project Management Manual (DEPA Project Preparation Manual 1995). Specific missions proposed for 1996 are listed for each Sector Priority Area below.

15. It is anticipated that within the Sector Priority Areas special attention will be paid to projects:

• that produce results which will allow the MEPNR better to prioritize and implement initiatives that benefit the environment and nature protection,
• that involve investments leading to significant pollution reductions and solid local institutional and/or financial involvement, and
• that are preparatory for decisions on national and international financing of environmental activities, including loan operations.

Sector Priority Areas

Water Pollution

16. From 1992, the DEPA has been active in the waste water sector in Moscow. The Kuryanovo WWTP is located in the south of the capitol, and is with its daily capacity of 3 mill. m³ possibly the largest WWTP in the world. The DEPA has been involved in two projects at Kuryanovo, the first pointing out possible improvements at the plant concerning nitrogen and phosphorous removal and analyzing the problem with harmful substances in sludge. The second project is the implementation of a pilot project concerning nitrogen and phosphorous removal.

17. The DEPA has been involved in two projects at the Novgorod WWTP, containing a review of existing extension plans and the actual condition of the plant, and rehabilitation of the first and second lines of the WWTP. The DEPA has also been involved in two projects at the Pskov WWTP.

18. The DEPA is interested in investigating the possibilities of spreading the obtained results of the above-mentioned projects, to the benefit of other parts of the Russian Federation.

19. The project on oil spill combating/recovery equipment has been discussed, and a decision has to be taken on the design of the project. The DEPA has experience from ongoing projects in the field in the Baltic countries, which could be useful in a project in the Russian Federation.

Air Pollution

20. Ozone depleting substances are a very serious threat to the stratospheric ozone layer, which protects the earth from harmful radiation from the sun. The substances are regulated by the Montreal Protocol, which has also been signed by the Russian Federation. The DEPA has been involved in two projects related to ODS-reduction, the first being technical and financial assistance for making a country programme, which is the precondition for GEF-financing of concrete investment projects, and the second being assistance to the MEPNR to implement the programme.

21. In 1994, a project concerning cleaning - catalytic removal - of flue gases from AO MosenergoŽs Severnaya Power Station was approved.

22. There is only one DEPA-financed project within this sector, namely the wind turbine demonstration project on the Commandor Islands. No projects are in pipeline.

23. Protection of the ozone layer is given high priority in Denmark, and also in the assistance to Central and Eastern Europe. Therefore, further assistance in the field - concrete demonstration projects, institutional set-up etc. - could be of relevance for Danish assistance.

Waste

24. Originally, DEPA-activities in the sector were geographically concentrated in the Moscow-region. Three projects were started in 1992, the first of them being a general review project assessing the composition and quantity of household waste in the region, and proposing improvals of waste management. The Moscow sanitary landfill project comprised the initial work of establishing a modern waste disposal site for the many future sites in the Russian federation. The third project was a feasibility study at waste incineration plant no. 3 in Moscow.

25. As a follow-up of the above-mentioned projects in Moscow, a detailed assessment of the priority investment programme in the waste management sector was started in 1993.

26. Furthermore, a waste management seminar was held in Smolensk in 1992, with the double objective of presenting Danish experience in the area, and establishing contacts between Denmark and the Russian Federation. As a follow-up, a demonstration project is about to start, aiming at establishment of a registration system for hazardous waste, training of the Russian participants in cleaner technology and designing of treatment proposals for hazardous waste in the Smolensk region.

27. The project "Moscow Waste Management Programme" is currently in review. The project background is the four above-mentioned projects in the region. The DEPA has received a revised version of the application, and final decision will soon be taken.

28. Another proposal in review is a project concerning recycling and reuse of fly ashes and cinders from the power plant Mosenergos south of Moscow. The concept has been formally accepted from the Russian side. Following a meeting between the DEPA and the applier in November 1995, some supplementary information is still needed from the applier, and some further preconditions should be fulfilled before final approval of the project.

Cleaner Technology

29. Cleaner technology is the designation used with reference to waste minimisation, cleaner production or pollution prevention. The context is rather broad and is not limited to strictly technical issues. Managerial and organisational issues are incorporated as well.

30. Cleaner technology activities highlight private sector involvement and participation in waste minimisation and pollution prevention at the source level. Efficient implementation of cleaner technology requires a close and good-working relationship between private companies and authorities responsible for the environmental protection.

31. The main focus is on "source reduction" and other practices that reduce or eliminate the creation of pollutants through increased efficiency in the use of raw materials, energy, water or other resources. "Source reduction" is any practice which reduces the amount of any hazardous substance, pollutant, or contaminant entering any waste stream or otherwise released into the environment prior to treatment, disposal, or recycling.

32. The activities include: equipment or technology modifications, process or procedure modification, reformulation or redesign of products, and substitution of raw materials. Improvements in housekeeping, maintenance, training or inventory control that result in pollution prevention are included as well as energy recovery.

33. In many cases it can be discussed whether a project is a cleaner technology project or not. Nevertheless, from the DEPA point of view, so far no cleaner technology projects have been supported. The idea of a handbook/catalogue about modern environmental equipment and methods could be further developed under this sector. Furthermore, in the future co-operation more attention in general should be paid to the cleaner technology concept.

The project Industrial and Hazardous Waste Management in Smolensk contains an important element of cleaner technology. The project aims at introducing cleaner technology in order to minimize the amounts of hazardous waste, and establishing an environmentally sound waste management. The project is a demonstration project, and an important objective is to disseminate the results to other parts of Russia, if the project is successful.

Institutional Strengthening

34. Aspects of institutional strengthening are and should be contained in many projects in the other sectors, like assistance in the fields of regulation, financing, organisational development, training and education.

35. The ongoing project on strengthening of environmental funds in the Russian Federation is an institutional strengthening project, trying to improve the functioning and capacity of the widespread network of environmental funds in the country.

Nature

36. Also in this sector only one DEPA-financed project has been implemented, concerning support for conservation of biodiversity in the European part of the Russian Federation. No other projects are in pipeline.

Others

37. Under this category falls but one project: Slurry Utilization in the Pskov Region. The project is ongoing, and an application for a second phase has been received. No other projects are in pipeline.

4.10.2 Regional programme for the Kaliningrad region

Introduction

1. The Danish Environmental Support Fund for Central and Eastern Europe provides support to activities limiting pollution through air, water and waste, supports the strengthening of the institutions responsible for or involved in the effort to reduce pollution, and supports efforts for the preservation of natural amenities.

2. The implementation strategy of the Danish Environmental Support Fund is based on two main principles:

• Activities are concentrated geographically and focus is established in the areas where greatest benefits to nature and the environment can be achieved, and where the efforts can be achieved in a transparent and quick manner, and
• Activities are concentrated primarily in sectors where the Danish knowledge on the environment and technology to protect the environment and nature is especially competent to provide qualified assistance.

3. The objectives of the part of the programme to protect the environment and resources in the Kaliningrad Region will focus on five sector priority areas: Water Pollution, including waste water and drinking water, Waste, Cleaner Technology and Nature.

4. The development of the co-operative mechanism between the Regional Committee for the Protection of Environment and Natural Resources of Kaliningrad, hereinafter called the Committee, and the Danish Environmental Protection Agency (DEPA) will be further developed by the introduction of one or two annual project review round as required.

Project Proposal Procedures

5. Proposals should be developed as outlined in DEPA Publication "Orientering fra Miljøstyrelsen" no. 14, 1995. The technical content of the proposal shall include a description of the significance and the background of the problem, statements about how the Program Priority Criteria will be covered, a project description following the Logical Framework Approach including clear outputs and monitoring indicators, and a presentation of project participants and their qualifications.

6. A project proposal offeror should in advance make sure that the goals and the absolute main part of any proposed activity are within a sector priority area. Outside the sector priority area proposals will according to routine be considered for funding only if the project can be viewed as a necessary activity to complete ongoing funded activities.

7. The activities shall be based on co-operation between a partner in the Kaliningrad Region (a factory, a technical institute, a private firm etc.) and a Danish partner. The objective is to transfer knowledge and technology in field of environmental protection or natural resource management by active involvement of the local experts.

8. High priority is given to investment projects resulting in substantial emission reductions. Consequently, projects being co-financed will have a higher priority than projects financed exclusively by Danish grants. Projects, followed by national activities, e.g. regulation in order to provide the basis for a general implementation and/or dispersal of results, will have higher priority than single isolated projects. Project proposals will also be evaluated with reference to their relationship to supplementary national or international activities in the area, and the integration of the project into an environmentally and economically sustainable development.

9. Project proposals will be subject to independent review by the Committee and DEPA. Decisions on funding are based on negotiations between the two ministries and subsequent approval by the DEPA management.

Project Pipeline Activities

10. Within the sector priority areas the Committee and DEPA will initiate project identification and project preparation activities as part of a project cycle management. After preparation of the project documents these will be put out to tender. Danish and local consultants, institutions and organisations will be invited to participate through contracting and implementation.

11. Project Pipeline activities will basically follow the DANCED Project Management Manual, Project Preparation 1995.

12. It is anticipated that within the Sector Priority Areas special attention will be paid to projects:

• that produce results which will allow the Committee to better prioritize and implement initiatives that benefit the environment and nature protection,
• that involve investments leading to significant pollution reductions and solid local institutional and/or financial involvement, and
• that are preparatory for decisions on national and international financing of environmental activities, including loan operations.

Sector Priority Areas

Water Pollution

13. Kaliningrad City figures as one of the Hot Spots in the Baltic Sea Joint Comprehensive Environmental Action Programme (JCP) caused by the domestic and industrial wastewater discharges occurring in and adjacent to the City and which flow via the River Pregel and the Gulf of Kaliningrad into the Baltic Sea.

14. The completion of the waste water treatment plant in the City has a high priority in the Russian-Danish environmental co-operation. The DEPA has already initiated two projects related to this waste water treatment plant: A Pre-Feasibility Study for Waste Water Treatment in Kaliningrad City and a Design Study for Improvement of the Plant.

15. As the expenses involved for the finalization of the plant are considerable and of a long-term nature, one very important task will be to work on a plan for financing of the investment phase.

16. The DEPA has been significantly active in the Water Sector in Kaliningrad Region. Almost 80% of the funds allocated to the region have been related to this sector.

17. In 1993 the Danish Environmental Support Fund supported a project concerning a Low Price Design Wastewater Treatment Plant in Gvardeisk. In January 1996 the DEPA received Progress Report no. 4, where the detailed design and the budget based on the tendering are presented. The tendering for equipment showed considerable increase in prices since the original application was sent to the DEPA in December 1992. The project is temporarily stopped until supplementary funding has been found.

18. Improvement of the drinking water quality in the City is another important task. In 1995 the Danish Environmental Support Fund has financed a project about Rehabilitation of the Water Supply in the City. Further funding to the water supply in the City will be evaluated in connection with an overall plan for financing of the water sector in Kaliningrad.

19. The Danish Energy Agency (DEA) has approached the DEPA for co-operation in the town of Gusev. The DEA and Danish Power Consult A/S has from TACIS received a grant to the study Rehabilitation of Combined Heat and Power Station and Improvement of District Heating System in Gusev. In connection with the commencement of this project an emergency problem has arisen, as the system has been closed down, due to directions from the Public Epidemic Authority. The main problem is that the district heating system, after intake of uncleaned water from the river, is also used for hot water supply for the inhabitants in Gusev.

20. The DEPA approved the project in September 1996 in order to get this acute problem solved before the heating season started in the autumn.

Waste

21. Two projects related to handling of domestic solid waste have been supported: Waste Treatment in Kaliningrad and Kaliningrad Solid Waste Study. The latter is still ongoing. The draft report on the sanitary landfill has been approved by the City Administration of Kaliningrad and will (after its approval by the DEPA) be the base for further detailed design.

22. The tasks of the Danish consultants in the further work will be the preparation of detailed design for environmental protection measures and operation manual for the site, tendering and selection of contractor and finally superior supervision during construction. The City of Kaliningrad will finance all local costs of the construction work of the sanitary landfill.

23. Hazardous waste is not a part of the ongoing activities but might be subject for co-operation in the near future in the form of landfill facilities.

Cleaner Technology

24. Cleaner technology is the designation used with reference to waste minimization, cleaner production or pollution prevention. The context is rather broad and is not limited to strictly technical issues. Managerial and organisational issues are incorporated as well.

25. Cleaner technology activities highlight private sector involvement and participation in waste minimization and pollution prevention at the source level. Efficient implementation of cleaner technology requires a close and good-working relationship between private companies and authorities responsible for the environmental protection.

26. The main focus is on "source reduction" and other practices that reduce or eliminate the creation of pollutants through increased efficiency in the use of raw materials, energy, water or other resources. "Source reduction" is any practice which reduces the amount of any hazardous substance, pollutant, or contaminant entering any waste stream or otherwise released into the environment prior to treatment, disposal, or recycling.

27. The activities include: equipment or technology modifications, process or procedure modification, reformulation or redesign of products, and substitution of raw materials. Improvements in housekeeping, maintenance, training or inventory control that result in pollution prevention are included as well as energy recovery.

Fish Processing Industry

28. The Danish Environmental Support Fund has supported a fact-finding mission to Kaliningrad Fish Processing Industry which is the most important civil trade in the Region.

The main objective of this mission was to assess the prospects of introducing cleaner production in this sector and to propose a programme for its implementation.

29. The report of this mission, which includes a programme proposal, will after a desk appraisal be submitted for tendering.

Metal Plating Industry

30. The environmental problems caused by the galvanic industries in the region is of high priority to the environmental authorities. Therefore, ECAT-Kaliningrad invited two galvanic experts - one of whom was Danish - on a fact-finding mission to Kaliningrad in the spring of 1996. The aim was to identify concrete possibilities for demonstration projects for implementation of the principles of cleaner production.

31. The report of this mission concludes that in all the industries visited an audit could define in detail relevant solutions for the individual industry. This audit could be followed by demonstration projects and training programmes. Further there is an urgent need for a regional system for collection, treatment and disposal of galvanic waste.

32. An application, based on a co-operation between ECAT-Kaliningrad and Danish consultants, is under preparation.

Nature Protection

33. ECAT-Kaliningrad has submitted the project proposal Development of Ecotourism and Nature Protection at the Curonian and the Vistula Spit to the EU Programme Life for funding. The aim of the project is to assist the authorities in the elaboration of possible solutions needed for the sustainable use of the nature resources in this area as well as for an economic development, including the development and/or implementation of technical and tourist infrastructure.

34. In the Danish Sub-Programme on Sustainable Nature Management in Estonia, Latvia, Lithuania, Kaliningrad and Poland the Curonian Spit has a very high priority. Therefore, the DEPA has towards ECAT- Kaliningrad expressed its willingness to co-operate in these nature reserves.

35. A condition for Life funding is the participation of Western partners. In the Life application, participation of a Danish Local Authority and a Danish County is proposed. An application from these authorities is under preparation.

36. After the evaluation of the project ideas identified during the mission conducted by the Danish National Forest and Nature Agency in early 1996, the Committee and the DEPA has prioritized three further nature projects: Polessky Experimental Forestry, Vishtinets Lake and Forest and Co-operation with Kaliningrad Regional Centre for Bio-Ecological Education.

Others

37. The Danish Environmental Support Fund has financed a project for Elimination of Sr 90 Radiation and Contamination Risks from Lighthouses in Estonia and Latvia. A similar project is under development in the Kaliningrad Region.

4.10.3 Regional programme for the St. Petersburg City and Leningrad region

Introduction

1. The Danish Environmental Support Fund for Central and Eastern Europe provides support to activities limiting pollution through air, water and waste, support the strengthening of the institutions that are responsible or involved with the effort to reduce pollution, and support efforts for the preservation of natural amenities.

2. The implementation strategy of the Danish Environmental Support Fund is based on two main principles:

• Activities are concentrated geographically and focus is established in the areas where the greatest benefits to nature and the environment can be achieved, and where the efforts can be achieved in a transparent and quick manner, and
• Activities are concentrated primarily in sectors where the Danish knowledge on the environment and technology to protect the environment and nature is especially competent to provide qualified assistance.

3. The objectives of the part of the programme to protect the environment and natural resources in the St Petersburg area will focus on five sector priority areas: Water Pollution, Hazardous Waste, Cleaner Technology, Air Pollution and Agriculture and Nature. Activities in the agricultural sector will be undertaken in close collaboration with the Danish Sectorial Programme on Agriculture within the Ministry of Agriculture and Fisheries. In addition, some follow-up activities to projects already implemented will also be initiated.

4. The development of the co-operative mechanisms between the Committee on Ecology and Natural Resources of St Petersburg, hereinafter called the Committee, and the Danish Environmental Protection Agency (DEPA) will be further developed by the introduction of two annual project review rounds.

Project Proposal Procedures

5. Project proposals for funding of environmental activities in the St Petersburg area may be submitted to DEPA at any time, however new proposals will only be subject to evaluation as per the closing dates March 31 and September 30.

6. Proposals have to be developed as outlined in DEPA Publication "Orientering fra Miljøstyrelsen" no. 14, 1995 (description in English). The technical content of the proposal shall include a description of the significance and the background of the problem, statements about how the Program Priority Criteria will be covered, a project description following the Logical Framework Approach including clear outputs and monitoring indicators, and a presentation of project participants and their qualifications.

7. A Project proposal offeror should in advance make sure that the goals and the absolute main part of any proposed activity are within a sector priority area. Outside the sector priority area proposals will routinely be considered for funding only if the project can be viewed as a necessary activity to complete ongoing funded activities.

8. The activities shall be based on co-operation between a partner in the St Petersburg area (a factory, a technical institute, a private firm etc.) and a Danish partner. The objective is to transfer knowledge and technology in field of the environmental protection or natural resource management.

9. High priority is given to investment projects resulting in substantial emission reductions. Consequently, projects being co-financed will have a higher priority than projects financed exclusively by Danish grants. Projects, followed by national activities, e.g. regulation in order to provide the basis for a general implementation and/or dispersal of results, will have higher priority than single isolated projects. Project proposals will also be evaluated with reference to their relationship to supplementary national or international activities in the area, and the integration of the project into an environmentally and economically sustainable development.

10. Project proposals will be subject to independent review by the Committee and DEPA. Decisions on funding are based on negotiations between the two ministries and subsequent approval by the DEPA management.

Project Pipeline Activities

11. Within the sector priority areas the Committee and DEPA will initiate project identification and project preparation activities as part of a project cycle management. Danish and local consultants, institutions and organisations will be invited to participate through contracting and implementation.

12. Project Pipeline activities will basically follow the DANCED Project Management Manual (DEPA Project Preparation Manual 1995). Specific missions proposed for 1996 are listed for each Sector Priority Area below.

13. It is anticipated that within the Sector Priority Areas special attention will be paid to projects:

• that produce results which will allow the Committee to better prioritize and implement initiatives that benefit the environment and nature protection,
• that involve investments leading to significant pollution reductions and solid local institutional and/or financial involvement, and
• that are preparatory for decisions on national and international financing of environmental activities, including loan operations.

Sector Priority Areas

Water Pollution

14. St Petersburg is the biggest point-source of pollution in the Gulf of Finland, which is one of the most polluted areas in the Baltic Sea. St Petersburg waste water collection system serves a population of approximately 5 million inhabitants. A large proportion of the waste water is discharged untreated, and a further significant proportion is discharged with only primary treatment.

15. The DEPA has been significantly active in the Waste Water Sector in St Petersburg and Leningrad Region. Almost 70% of the funds allocated to the region have been related to this sector.

16. In 1992 the EBRD was requested by the City of St Petersburg and Vodokanal St Petersburg to assist the City in preparing a prioritized investment programme for the water sector. The pre-feasibility study proposed a two-phased programme for improving the water supply and waste water system in St Petersburg: A Short-term and a Long-term Water Sector Development Programme.

17. The feasibility study of the Short-term Programme was completed in December 1995. The implementation phase is expected to start by Mid-1996 and will last for four years. The Danish Environmental Support Fund has expressed its willingness to EBRD to participate in the financing of this phase, and most probably the funds will be allocated to activities related to the Water Demand Management part.

18. The Terms of Reference for the feasibility study of the Long-term Programme has been approved in March 1996 and is expected to start by June 1996. The feasibility-study consists of nine components and the DEPA will finance the preparation of the Water Treatment Development Plan.

19. Co-financed with Vodokanal St Petersburg and the Finnish Ministry of Environment the DEPA initiated in 1994 a project concerning rehabilitation of sewage pipes at Nevsky Prospekt. About 3,5 km out of 6 km of Nevsky Prospekt will be renovated within this project. At present a continuation of the project about renovation of the last 2,5 km of the Prospekt is under consideration.

20. Proposals are under consideration regarding the Elaboration of an Action Plan to facilitate the Completion of Improvements to the City of Pushkin’s Wastewater Collection and Treatment Facilities and the Waste Water Treatment at a District Heating Plant.

21. A proposal regarding Monitoring and Maintenance of the Pumping Stations of the Sewage System in St Petersburg is under consideration and will be decided when the results of the feasibility study of the EBRD Long-term Programme are available.

Air Pollution

22. Three projects have been carried out related to energy production and air pollution: A Monitoring and Diagnostic System to Sosnovy Bor NPP, an Environmental Audit Pilot Project at selected Fossil Fueled Combined Heat and Power Plants and District Heating Plants in St Petersburg and Off-gas Cleaning Equipment to a Paint and Lacquer Plant.

23. Only one project related to air pollution is under consideration: A Municipal System for Operative Detection of Air Pollutants in St Petersburg. The project will be decided, when the results of similar ongoing projects in Lithuania and Belarus are available.

24. The Danish Environmental Support Fund has financed a project for Elimination of Sr 90 Radiation and Contamination Risks from Lighthouses in Estonia and Latvia. A similar project is under development in the St Petersburg area.

25. Further activities in this area can be developed in the framework of the ongoing Research Collaboration Project between Danish scientists and scientists from the St Petersburg area.

Hazardous Waste

26. Hazardous industrial waste and medical waste require special treatment or disposal to prevent aquifer or air contamination. The official dumping site for hazardous waste in this region is Krasny Bor. At present Finland is working on a study for construction of a plant for managing of the hazardous waste at Krasny Bor.

27. The Danish contribution to the hazardous waste sector has so far been related to handling of waste oil. A feasibility study for a System for Safe Handling of Waste Oil is completed. A possible continuation of this project has not yet been discussed. Further a project for Port Reception Facilities for Waste Oil was recently commenced as a part of a major project for reception facilities in the main harbours in the Baltic countries.

28. The Department of Environmental Protection of St Petersburg’s Mayoralty has obtained financial support from the EU-LIFE Programme to a Feasibility Study for a Demonstration Plant for the Treatment of Hazardous Medical Waste. The project has participation of the twin cities of St Petersburg. A proposal for participation of the Municipality of Århus and a Danish consultant in this project is under elaboration.

Cleaner Technology

29. Cleaner technology is the designation used with reference to waste minimization, cleaner production or pollution prevention. The context is rather broad and is not limited to strictly technical issues. Managerial and organisational issues are incorporated as well.

30. Cleaner technology activities highlight private sector involvement and participation in waste minimization and pollution prevention at the source level. Efficient implementation of cleaner technology requires a close and good-working relationship between private companies and authorities responsible for the environmental protection.

31. The main focus is on "source reduction" and other practices that reduce or eliminate the creation of pollutants through increased efficiency in the use of raw materials, energy, water or other resources. "Source reduction" is any practice which reduces the amount of any hazardous substance, pollutant, or contaminant entering any waste stream or otherwise released into the environment prior to treatment, disposal, or recycling.

32. The activities include: equipment or technology modifications, process or procedure modification, reformulation or redesign of products, and substitution of raw materials. Improvements in housekeeping, maintenance, training or inventory control that result in pollution prevention are included as well as energy recovery.

33. The Environmental Support Fund has not initiated any projects within this sector to date in St Petersburg and Leningrad Region. However, in the Project Pipeline is a proposal for cleaner technology at a surface plating industry under consideration. The project will after some modifications be given priority in the near future.

34. Under the responsibility of the Committee a City Programme for Reconstruction of the Surface Plating Industry, including data from each industry, has been performed by a local institute. The Informal Nordic Group on Cooperation with Central and Eastern Europe has discussed the possibility for a joint Nordic Project within this sector, and the idea will be further developed in the nearest future.

Agriculture and Nature

35. Large livestock farms were identified as a priority hot spot within the JCP. The large pig breeding complexes are known to cause enormous environmental problems primarily because of the use of hydraulic methods for manure removal and the great amounts of sludge to be disposed in these complexes. Several studies have been performed, most recently a Finnish feasibility study of Pollution Control of large Pig Breeding Complexes (1995).

36. The DEPA intends to develop the activities in this area in collaboration with the Danish Ministry of Agriculture and Fisheries and a project identification mission will be initiated during 1996 to identify concrete project ideas to be further developed into project documents during 1996.

37. Another important livestock production in this region is the poultry farming. In the Project Pipeline is a Demonstration Project for solving Environmental Problems in the Egg and Poultry Production under consideration. The farm selected to participate in the project is responsible for 1/5 of the total egg production of the Region.

38. The focus on nature protection in the Russian-Danish co-operation has to date been minimal, which is not an expression of absence of nature in the region, on the contrary. The region hosts several large lakes, rivers and enormous forest areas.

39. Establishment of nature parks, preparation of a catalogue of protected areas, development of an environmental monitoring system and rehabilitation of barrages (Tikhvin) has so far been mentioned as possible co-operation projects. It is anticipated that a project identification mission will be initiated during 1996 to identify concrete project ideas to be further developed into project documents during 1996.

4.11 Slovakia

Division of Czechoslovakia

As mentioned in the description of the Czech Republic, the federal state of Czechoslovakia was divided into the Czech Republic and Slovakia on 1 January 1993.

Only 10 per cent of the projects supported by the DESF facility from 1991-93 were situated in what became Slovakia. Immediately after the division of Czechoslovakia, only a very limited number of projects were initiated in Slovakia. However, this has changed in recent years where focus on Slovakia has increased.

Primary sectors

Co-operation with Slovakia is concentrated on air, water, waste, cleaner technology and the institutional area. In terms of funds allocated, IN projects account for approx. 75 per cent of the environmental projects.

In the future co-operation, Slovakia has given special priority to:

• reduction of air pollution,
• water quality improvement, including establishment of purifying plants,
• reduction of waste and hazardous waste volumes, and
• institutional strengthening

Co-financing

Slovakian co-financing is at a lower level than in the Czech Republic. Thus, Danish assistance accounts for 15 to 50 per cent of the total project costs related to the individual projects.

4.11.1 Country programme for Slovakia

Introduction

1. The Danish Environmental Support Fund for Central and Eastern Europe provides support to activities limiting pollution through air, soil, water and waste, supports the strengthening of the institutions that are responsible for or involved in the effort to reduce pollution, and supports efforts for the preservation of natural amenities.

2. The implementation strategy of the Environmental Support Fund is based on two main principles:

1. activities are concentrated geographically and focus on the areas where the greatest benefits to nature and the environment can be achieved, and where the efforts can be achieved in a transparent and quick manner, and
2. activities are concentrated primarily in sectors where the Danish knowledge on the environment and technology to protect the environment and nature is especially competent to provide qualified assistance.

3. The objectives of the part of the programme to protect the environment and natural resources in the Slovak Republic have focused on a range of sector priority areas: Reduction of Air Pollution, Water Protection/Remediation of Polluted Groundwater, Waste Water, Institutional Strengthening and Cleaner Technology. In addition, some follow-up activities to projects already implemented will also be initiated.

4. The co-operative mechanisms between the Slovak Republic’s Ministry of the Environment (MOE) and the Danish Environmental Protection Agency (DEPA) have to be further developed by the introduction of two annual project review rounds and might be supplemented by the employment of a local project manager in the MOE, funded by DEPA.

Project Proposal Procedures

5. Project proposals for funding of environmental activities in the Slovak Republic may be submitted to DEPA at any time. However, new proposals will only be subject to evaluation as per the closing dates March 31 and September 30.

6. Proposals shall be prepared as outlined in the DEPA Publication "Orientering fra Miljøstyrelsen" No. 14, 1995. The technical content of the proposal shall include a description of the significance and the background of the problem, statements about how the Program Priority Criteria will be covered, a project description following the Logical Framework Approach including clear outputs and monitoring indicators, and a presentation of project participants and their qualifications.

7. The project proposal offeror shall in advance make sure that the goals and the absolute main part of any proposed activities are within a sector priority area. Outside the sector priority area proposals will be considered according to routine for funding only if the project can be viewed as a necessary activity to complete ongoing funded activities or otherwise contributes significantly to the improvement of the environment.

8. The activities shall be based on co-operation between a partner in the Slovak Republic (a factory, a technical institute, a private firm etc.), and a Danish partner. The objective is to transfer knowledge and technology in the field of the environmental protection or natural resource management.

9. High priority is given to investment projects resulting in substantial emission reductions. Projects being co-financed will have a higher priority than projects financed exclusively by Danish grants. Projects that will be followed by national activities, e.g. regulation, in order to provide the basis for a general implementation and/or dispersal of results will have higher priority than single isolated projects. Project proposals will also be evaluated with reference to their relationship to supplementary national or international activities in the area, and the integration of the project into an environmentally and economically sustainable development.

10. Project proposals will be subject to independent review by the Ministry of Environment of the Slovak Republic (MOE) and DEPA. Decisions on funding are based on negotiations between the two ministries and subsequent approval by the DEPA management.

Project Pipeline Activities

11. Within the sector priority areas the MOE and DEPA will initiate project identification and project preparation activities as part of a project cycle management. Danish and Slovak consultants, institutions and organisations will be invited to participate through contracting and implementation.

12. Project Pipeline activities will basically follow the DANCED Project Management Manual (DEPA Project Preparation Manual 1995. Specific missions already planned for 1996 are listed for each Sector Priority Area below.

13. It is anticipated that within the Sector Priority Areas special attention will be paid to projects:

1. that produce results which will allow the MOE better to prioritize and implement initiatives that benefit the environment and nature protection,
2. that involve investments leading to significant pollution reductions and solid local institutional and/or financial involvement, and
3. that are preparatory for decisions on national and international financing of environmental activities, including loan operations.

Sector Priority Areas

Reduction of Air Pollution

14. Reduction of air pollution will be one of DEPA’s major activities in the Slovak Republic. Examples might be made through the introduction of cleaner technology, renewable energy, through installation of filters, change of fuel, etc.

15. The Environmental Support Fund has funded several projects regarding the above mentioned problems in the Slovak Republic, e.g. through the establishment of a biomass plant i Poprad, the installation of Vapoyr recovery units for gasoline at two locations, installation of filter system in five furniture factories, establishment of two 250 kW windmills in Ziar nad Hronum and a feasibility study regarding the possibilities of using geothermal energy in the Slovak Republic.

16. A number of projects are in the pipeline. It is expected that in 1966 DEPA will be involved in 1-3 projects in this area.

Waste Water Treatment

17. The Danish Environmental Support Fund has only funded two projects in the Slovak Republic in this area. One project regarding the establishment of a Waste Water Treatment Plant in Ziar nad Hronum (58,000 PE) and one project regarding the establishment of a WWTP at the University of Bratislava.

18. There are no projects in the pipeline.

Surface Waters and Water Resources

19. Only one project has been funded in the above mentioned areas until now, the project "Implementation and Use of Environmental Information System in the Slovak Republic."

20. There are three projects in the pipeline. It is expected that in 1996 the DEPA will be involved in 1-2 projects in this area.

Institutional Strengthening

21. Institutional strengthening and capacity building are important at all levels in the Slovak Republic in the field of environmental protection, resource management and nature conservation.

22. The Environmental Support Fund has supported 2 projects in this area. The projects concern strengthening of the Hydrometric Institute and the introduction of sound laboratory practice at Slovak laboratories.

23. It is expected that in 1966-97 DEPA will be involved in 1-2 projects in this area.

Cleaner Technology

24. Cleaner Technology is the designation used with reference to waste minimization, cleaner production or pollution prevention. The context is rather broad and is not limited to strictly technical issues. Managerial and organisational issues are incorporated as well.

25. The Environmental Support Fund has initiated one Cleaner Technology project in the Slovak Republic regarding the introduction of Cleaner Technology at Slovakian slaughterhouses.

It is intended during 1996-97 to implement Cleaner Technology at one selected slaughterhouse.

26. It is intended to support further 1-2 projects in this area during 1996-97.

Hazardous and Solid Waste

27. Hazardous industrial waste and medical waste require special treatment or disposal to prevent aquifer or air contamination. As a consequence of unforeseeable accidents, past neglect, or lack of knowledge of sound environmental practices, certain locations within the Slovak Republic have become contaminated with hazardous and toxic substances or agents. These contaminants have permeated and adsorbed into soils, diffused to interstitials in the saturated zones, dissolved into ground waters and migrated to subsurface aquifers.

28. Waste Treatment Facilities have been considered to be a priority for investment in the environmental sector. The Danish Support Fund has supported one project regarding a feasibility study in Kosice.

29. There are no waste projects in the pipeline, but in 1996 DEPA intends to support one project in this area.

Nature Protection

30. The Environmental Support Fund has funded no projects in this area.

4.12 Ukraine

Negotiations with Ukraine on environmental co-operation were initiated in 1992. In 1993, the first environment project was started and in June 1994, co-operation between Ukraine and Denmark was formally established by the signing of an agreement on environmental co-operation.

Target area of Danish support

The main target area of the Danish Environmental Support Fund is the Baltic area. As most of Ukraine is situated outside the Baltic Sea catchment area (except the area around the city Lviv in the north-western part of Ukraine) efforts in the first couple of years have, according to the criteria for support applied at that time, been targeted at limiting air pollution, potentially drifting towards Denmark, securing nuclear power plants as well as supporting the waste water treatment plant of Lviv which lies within the Baltic Sea catchment area.

Enlargement of DESF target area

As the target area of Danish environmental support has been enlarged to include protection of the Black Sea and local and regional polluted areas, the project portfolio has been extended with projects related to water pollution (the Black Sea), hazardous waste and cleaner technology.

Chernobyl

Danish support to overcome the aftermath of the Chernobyl disaster and to ensure the decommissioning of the remaining reactors at the Chernobyl Nuclear Power Plant is given multilaterally through support to the Nuclear Safety Account, the Chernobyl Shelter Fund (under EBRD) and the EU support schemes.

Potential for environment projects

The technical potential for significant environment projects in Ukraine is considered to be high as the entire public environmental sector, i.e. water supply, waste water and waste management, has been severely neglected. Furthermore, Ukrainian industry has been planned and is conducting its affairs with almost no regard for resource conservation, i.e. raw materials and energy, leading to wasteful utilization of resources.

Obstacles

Due to the poor economy of both the Ukrainian State and enterprises as well as inadequate legislation and organisation, it is very difficult to carry out even obviously needed projects (for instance water supply in areas with cholera and hepatitis). This is the reason why 4 projects worth DKK 22 million have not been initiated or are only being carried out to a very limited extent, or are awaiting necessary amendment to Ukrainian legislation.

Due to the potentially big environmental improvements connected with these projects, the Danish EPA has reserved funds for these projects for a considerable amount of time.

4.12.1 Country programme for Ukraine

The country programme for Ukraine is subject to final approval.

Introduction

1. The Danish Environmental Support Fund for Central and Eastern Europe provides support to activities limiting pollution through air, water and waste, supports the strengthening of the institutions that are responsible or involved with the effort to reduce pollution, and supports efforts for the preservation of natural amenities.

2. The implementation strategy of the Environmental Support Fund is based on three main principles:

1. activities are concentrated in the areas where the greatest benefits to nature and the environment can be achieved, and where the efforts can be achieved in a transparent and quick manner, and
2. activities are concentrated primarily in sectors where the Danish knowledge on the environment and technology to protect the environment and nature is especially competent to provide qualified assistance.
3. If possible the effort is concentrated on environmental problems that influences the environment of Denmark or the global environment.

3. The scope of the Agreement between DEPA and MEPNS also covers fields of the environmental protection not under the jurisdiction of the MEPNS. In these cases the MEPNS will take all necessary actions to facilitate the projects and the co-operation with the authority in question. Examples of such other ministries or other state authorities are the State Committee for Housing and Municipal Economy of Ukraine, The Ministry of Industry and the Ministry of Defense.

4. The objectives of the part of the programme to protect the environment and natural resources in Ukraine has included: Desulfurization of exhaust gases on Chemical Cokes Factories; Soil Remediation on military Sites; Feasibility Studies to prepare World Bank loans on the Water and Waste Water Sector of Lviv, of the Autonomous Republic of Crimea and of the City State of Sevastopol; emergency deliverance of Pumps to the WWTP in Kharkiv; pre-feasibility study for geothermal energy; elaboration of country program for phase out of ozon depleting substances; supply of equipment for repair and maintenance of water mains and sewers in Crimea (Yalta and Sevastopol); preparatory study for cleaner technology project in machine building industry; and project mission on hazardous waste management.

Project Proposal Procedures

5. Projects for funding or co-funding by DEPA can be identified in two ways: The first way is when a Danish company or institute identifies an environmental project and a Ukrainian partner and submits a project proposal together with a request for DEPA funding or co-funding of the project cost.

6. The other way of identifying projects to receive funding or co-funding from DEPA is when a project idea is developed by the MEPNS and/or by DEPA and agreed upon between the two parties as a project area to be further investigated for possible projects. In this case a mission will be send from DEPA to Ukraine with the participation of MEPNS and DEPA to perform a review of the project possibilities and propose concrete projects to be elaborated into a project document. After an appraisal and on the basis of the project document and other tender materials a tender will be held in Denmark for the part of the project that receives funding from DEPA.

7. Project proposals for funding of environmental activities in Ukraine under section 5 above may be submitted to DEPA at any time.

8. These proposals have to be developed as outlined in DEPA Publication "Orientering fra Miljøstyrelsen" no. 14, 1995. The technical content of the proposal shall include a description of the significance and the background of the problem, statements about how the Program Priority Criteria will be covered, a project description following the Logical Framework Approach including clear outputs and monitoring indicators, and a presentation of project participants and their qualifications.

9. A Project proposal offeror should in advance make sure that the goals and the absolute main part of any proposed activities are within a sector priority area (see below on page 4). Outside the sector priority area proposals will routinely be considered for funding only if the project can be viewed as having extraordinary environmental benefits.

10. The activities shall be based on co-operation between a partner in Ukraine (a factory, a technical institute, a private firm, a governmental body etc.), and a Danish partner. The object is to transfer Danish knowledge and technology in the field of environmental protection or natural resource management.

11. High priority is given to investment projects resulting in substantial emission reductions. Consequently, projects being co-financed will have a higher priority than projects financed exclusively by Danish grants. Projects that will be followed by national activities, e.g. regulation, in order to provide the basis for a general implementation and/or dissemination of results will have higher priority than single isolated projects as well as project which directly includes activities of dissemination of results. Project proposals will also be evaluated with reference to their relationship to supplementary national or international activities in the area, and the integration of the project into an environmentally and economically sustainable development.

12. Project proposals that simultaneously includes other benefits for the Ukrainian society such as improved economic performance, improved national economy or easing of the transition process and who fit in with the overall Ukrainian national planning will be prioritized prior to project proposals without such external benefits.

13. Project proposals will be subject to independent review by MEPNS and DEPA. Decisions on funding are based on negotiations between the two ministries (and other Ukrainian government bodies if appropriate) and subsequent approval by the DEPA management.

Project Pipeline Activities

14. Within the sector priority areas MEPNS and DEPA will initiate project identification and project preparation activities as part of a project cycle management. Danish and Ukrainian consultants, institutions and organizations will be invited to participate through contracting and implementation.

15. Project Pipeline activities will basically follow the DANCED Project Management Manual (DEPA Project Preparation Manual 1995).

16. It is anticipated that within the Sector Priority Areas special attention will be paid to projects:

1. that produce results which will allow the Ukrainian Government better to prioritize and implement initiatives that benefit the environment and nature protection,
2. that involve investments leading to significant pollution reductions and solid local institutional and/or financial involvement, and
3. that are preparatory for decisions on national and international financing of environmental activities, including loan operations.

Sector Priority Areas

Water

17. The Danish Environmental Support Fund has supported activities in the Ukrainian Water and Waste Water Sector in Lviv, Kharkiv and in Crimea of which Lviv is an appointed HELCOM Hot Spot (the only Helcom hot spot in Ukraine) while the remaining cities lies within the catchment area of the Black Sea. The cities covered by these activities have between 350.000 to 1.6 million inhabitants.

18. The project in Lviv is now coming closer to the implementation phase and thus solid commitment is asked for in terms of building a sound foundation for the obtaining of international loans to cover parts of the investments. While the first steps in these projects have been financed with bilateral donors and others covering foreign costs, the implementation of the projects will not be possible without substantial Ukrainian contribution both in terms of self financing and in terms of taking a loan.

19. Since the lack of adequate services from the vodokanals is likely to constitute a barrier for improved public health as well as for the desired economic development of the Ukrainian cities a solution to these problems must be found. The overall common problem of the vodokanals is lack of sufficient investment funds and the lacking possibility of meeting repay requirements connected to loans form international financing institutes. An other barrier to improved service is the absence of the basic instruments for employing modern management tools. These and other problems are described in several studies and it is clear that a lasting and widely applicable solution demands central government initiative since several of the identified barriers for development are legal and administrative.

20. Further Danish support to studies preparing international loans will depend on the progress obtained during the negotiations of a loan to the Lviv Vodokanal. This project will be viewed as an indicator of the perspectives for the DEPA of supporting feasibility studies meant to prepare a IFI loan.

21. Only a limited number of bigger Ukrainian cities in need of improved water and waste water service are presently covered by studies with the perspective of obtaining an IFI loan. A large number of big cities are not covered by efforts to discover investment needs and the possibilities of improving service if fees are increased within the limits of the populations affordability and willingness to pay for the improved service.

22. It will thus be investigated if the co-operation between DEPA and the MEPNS should include activities for the dissemination of the results concerning technical findings, investment needs, management ability, affordability, willingness to pay, billing, planning and accounting from the cities covered by studies of these subjects to cities without such studies. It is the intention that such studies will not have prejudice for whether the cities will wish to prepare a bank loan or whether it wishes to rely on its own funding possibilities.

23. Water Resource Management is included in the ongoing water and waste water project in Crimea and the study is expected to include proposals for reduced water consumption in all the water consuming sectors. Protection of water resources is the object of the ongoing project in the Lusk Airbase where oilcontamination of groundwater supply of a nearby town is being investigated and cleaning procedures are commenced in situ. This project includes training of Ukrainian officials from the Ministry of Defense to conduct such efforts on the basis of a planning performed during the project and covering a number of airbases with similar problems of water contamination by oil. Water savings in industry is expected to be a significant part of the results of the activities under the cleaner technology programme.

Cleaner Technology

24. Cleaner Technology is the designation used with reference to waste minimization, cleaner production or pollution prevention. The context is rather broad and is not limited to strictly technical issues. Managerial and organizational issues are incorporated as well.

25. Cleaner Technology activities highlight private/industrial sector involvement and participation in waste minimization and pollution prevention at the source level. Efficient implementation of Cleaner Technology requires a close and good-working relationship between private/industrial companies and authorities responsible for the environmental protection.

26. The main focus is on "source reduction" and other practices that reduce or eliminate the creation of pollutants trough increased efficiency in the use of raw materials, energy, water or other resources. "Source reduction" is any practice which reduces the amount of any hazardous substance, pollutant, or contaminant entering any waste stream or otherwise released into the environment prior to treatment, disposal, or recycling.

27. The activities include: equipment or technology modifications, process or procedure modification, reformulation or redesign of products, and substitution of raw materials. Improvements in housekeeping, maintenance, training or inventory control that result in pollution prevention are included as well as energy recovery. Activities not included are recycling, treatment and disposal. Some practices commonly described as "in-process" recycling may qualify as cleaner technology because it can reduce the need for treatment or disposal, and conserve energy and resources.

28. The Danish Environmental Support Fund for Eastern Europe has initiated a Cleaner Technology Project in Ukraine specifically in the machine building industry in co-operation with the MEPNS and with the ministry Minmashprom. This includes a project identification mission who submits its final report in early 1997. It is intended during 1997 to develop a more coherent Cleaner Technology Program in Ukraine.

29. This will involve negotiations between the MEPNS and the Ukrainian Ministry Minmashprom.

Waste

30. Hazardous industrial waste requires special treatment or disposal to prevent aquifer or air contamination and connected health threats. As a consequence of unforeseeable accidents, past neglect, or lack of knowledge of sound environmental practices, certain locations within Ukraine have become contaminated with hazardous and toxic substances or agents. These contaminants have permeated and adsorbed onto soils, diffused to interstitial saturated zones, dissolved into ground waters and migrated to subsurface aquifers.

31. A DEPA funded Initial Mission to investigate the possibilities for co-operation in the field of hazardous waste has recently been visiting Ukraine. The mission has given its draft report and a draft proposal for a second mission to narrow the field of project proposals. It is the intention that the second mission shall provide a project document to be reviewed by DEPA and MEPNS with the aim of selecting a few high performing projects to receive DEPA funding.

32. The World Bank has presented a project proposal for a municipal solid waste project in Yalta for DEPA with a request for funding. The proposal is for a preparatory study for a World Bank loan.

Air

33. Significant reduction of sulphurdioxide are expected from a series of projects on three chemical cokes factories in the Donetsk area. These projects have been negotiated directly between a Danish supplier and the government of Ukraine and includes a self financing of more than 90 % of project cost.

34. DEPA has further supported the elaboration of a national plan for the phasing out of the production of ozone depleting substances as a precondition for an agreement between Ukraine and the Global Environment Facilities of a grant of approx. 20 MUSD to cover incremental costs in connection with this phasing out of ODS.

35. In the frame work of a regional effort to phase out lead as a substance in gasoline Ukraine has been selected together with a number of other Eastern and Central European Countries to be included in a project with the aim of establishing the legal basis for such phasing out of lead in gasoline.

36. Ukraine is a highly industrialized country and air pollution from industry is on of the major environmental problems. Thus a the co-operation between DEPA and MEPNS will continue to give high priority to projects within this area.

Nature Protection

37. The Environmental Support Fund has not supported nature projects in Ukraine up till now. Initial negotiations has been started to investigate possible Danish support of activities to secure and improve biodiversity in southern Ukraine in the coastal zone of the Black Sea within a project under the Global Environment Facility covering a broad range of nature components in the Ukrainian Black Sea coastal zone.

Energy aspects

38. The Danish Environmental Support Fund has supported a pre feasibility study on the utilization of geothermal energy in Ukraine. The study has concluded that the potential for the utilization of geothermal energy in Ukraine is significant. The study also points at a possible demonstration project for the utilization of geothermal energy in an existing district heating plant.

39. DEPA intents further to develop the activities in this area in close co-operation with the Danish Energy Agency in order to help Ukraine to promote energy saving and energy production from sources other than nuclear energy.

Institutional Strengthening

40. Institutional strengthening and capacity building are important on all levels in Ukraine in the field of environmental protection, resource management and nature conservation. Part of the ongoing projects already implemented serve to strengthen local authorities and institutions, e.g. the development of the Vodokanals of L’viv, Crimea and Sevastopol as self sustaining, independent utilities as a part of the studies performed in connection with proposed World Bank loans for investments in better service from these vodokanals.

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