Title, Danish Environmental Protection Agency

Environmental Assistance to Eastern Europe
Annual Report '98

4. Assessment
Denmark’s environmental assistance to Eastern Europe

5. Stock-taking of the MKŲ-scheme at the turn of the year

6. Stock-taking of sector-integrated environmental assistance

Annex 1: Advisory Committee

Annex 2: The Aarhus Declaration
Declaration On the Phase-out of Added Lead in Petrol

Annex 3: Financing Report from Aarhus ECE/CEP/50
1. Environmental Financing in CEEC/NIS
2. Trends in Environmental Expenditure
3. Demand for Environmental Financing
4. Specific Issues in Environmental Financing
5. Environmental Financing Mechanisms
6. Recommendations

Appendix 1: Selected data on domestic and external environmental finance in CEEC/NIS

Appendix 2: Key References

1. Introduction

By the Danish Minister for Environment and Energy, Svend Auken

Perspectives for Danish environmental assistance in Eastern Europe

Danish environmental assistance should be seen in an international perspective. Only if the environmental assistance we provide is offered in close co-operation with the individual countries and only if we are open to the development in the potential of these countries and are aware of the strengths and weaknesses of other donor countries and of the international financial institutions, will our environmental assistance succeed. Fortunately, an external assessment of Danish environmental assistance in Eastern Europe shows that we are on the right track.^[1]

The Eastern and Central European applicant countries’ EU accession has come to dominate the European agenda more and more and thus also Danish environmental assistance. The applicant countries have undertaken to accept the EU’s political objectives and to implement EU environmental legislation. This explains why Danish environmental assistance to these countries is increasingly being focused on enabling the applicant countries to live up to EU environmental standards. Even today, close to half of the Danish environmental assistance to Eastern Europe is aimed at EU approximation, and in the years to come, the experience of Danish environmental management at national, regional and local levels will increasingly be passed on to the Eastern countries with a view to strengthening their own institutions.

Future EU membership is an important driving force behind the steps taken by these countries, and on our part, we shall contribute to furthering the process as much as possible by assisting the EU applicant countries in identifying good environmental projects and ensuring an optimal utilization of the substantial EU resources set aside for the approximation process.

At the same time, the difference in environmental efforts between especially the applicant countries and those countries that are not applying for membership is becoming more and more conspicuous. There is a real risk that a new environmental iron curtain is about to be lowered between the enlarged EU and the rest of Europe.

Therefore, the next very great challenge facing us will be to ensure environmental integration of Russia, Ukraine and the other former Soviet republics. The environmental assistance we can offer can contribute greatly to improving the co-operation between the Central European countries and the states further east that will also have to fulfil their environmental obligations. Many of the countries in Eastern Europe have signed the same international agreements as Denmark, and by means of the environmental assistance, we can help them live up to the agreements. This is the way the pan-European environmental process is developing, and Danish assistance will steer the same course.

But Denmark has to co-operate not only with the individual recipient countries. We have to continue to participate in international environmental co-operation as well, for only in that way can we have any influence on the environmental development process in the East as well as in the West to the benefit of the environment in Europe. We participate actively in the international environmental co-operation on Eastern Europe by cooperating with the EU, the OECD, the UN and international financial institutions. Furthermore, we participate in the Baltic co-operation and in the Nordic environmental co-operation. Through this co-operation, we will continue to play an active role in putting the environment on the agenda in Eastern Europe. Danish environmental assistance should be seen in this perspective.

Environmental assistance under scrutiny

By the Danish Minister for Environment and Energy, Svend Auken ^[2]

An external assessment of Danish environmental assistance to Eastern Europe shows that the money seems to be well spent.

With the fall of the Berlin Wall in 1989, and as the other Communist countries fell apart over the following years, the new era was bid welcome. A dark chapter in the history of Europe had been brought to an end, a period when the Europeans had been kept separated from each other and when basic human rights had been suppressed in one half of Europe.

The joy and expectations surrounding the new possibilities that were suddenly opening up were enormous, but at the same time, it was recognised that the task would be extremely difficult in many ways. The new countries would have to be helped on in a number of areas if they were to get back on their feet again.

One of the areas where the Danish Folketing decided to make an effort in connection with the assistance to CEEC, the former Communist countries in Eastern and Central Europe, was in the area of environmental assistance. Part of this assistance has now been assessed, viz. the so-called DESF facility (Danish Environmental Support Fund for Eastern Europe) administered by DEPA, the Danish Environmental Protection Agency.

In July 1977, DEPA initiated an external assessment of the DESF facility, covering the period from its launch in 1991 until the end of 1996. The assessment was carried out by Associate Professor Mikael Skou Andersen from Aarhus University in co-operation with PLS Consult and KPMG C. Jespersen. The assessment team interviewed all Danish project contractors. Besides, 47 selected projects have been analysed in detail, and the team has visited eight out of the twelve co-operation countries in Eastern Europe and interviewed authorities, stakeholders and independent experts. In the assessment of the 47 projects, 35 of the projects are characterised as satisfactory or very satisfactory, eight as less satisfactory and four as unsatisfactory. After some teething troubles during the first few years of the support facility, we are pleased to note that so many of the projects are assessed in very positive terms and that the assessment team concludes that Danish environmental assistance has now found a satisfactory form.

In a number of areas, the assessment comes up with some interesting recommendations for our work in the coming years. I do not intend to go into detail with the results of the assessment here, but would like to mention just one of the recommendations, viz. that we have to improve our ability to measure the actual environmental impacts of the projects. Of course, the recommendations made in the assessment will be taken into account in the continuous adjustment of the Ministry’s efforts and measures in this area.

But the report gives rise to a number of immediate comments on the future perspectives for Danish environmental assistance to Eastern Europe.

Things are developing very rapidly and require that we continuously adjust our environmental assistance. We should therefore keep in mind that the assessment comprises only the period up to and including 1996 and that it is based on bilateral assistance to the individual recipient countries.

Denmark co-operates not only with the individual recipient countries. We are active participants in international environmental co-operation on Eastern Europe, co-operating with the EU, the OECD, the UN and with the international financial institutions; we participate in the Baltic co-operation, in the Nordic environmental co-operation, etc. Being the largest bilateral donor – absolutely and in relation to the number of inhabitants – Denmark has played an active role through this co-operation in putting the environment on the agenda in Eastern Europe.

One sign of this is that Danish environmental projects in Eastern Europe have acted as catalysts for the granting of loans by international financial institutions of up to DKK 6 Bn for environmental purposes in these countries and that the countries of their own accord have chosen to co-finance an impressive part of the project costs. The projects have also led to a substantial export of Danish environmental technology.

We intend to continue this international environmental co-operation, for only in this way can we influence the environmental development process in the East as well as the West to the benefit of the environment in Europe. In that connection, the fourth Pan-European Conference of Environment Ministers in Aarhus in June was an important milestone, and the environmental support scheme should be seen in this context.

Among the most important results achieved in Aarhus was the signing of the Publicity Convention, also called the Aarhus Convention, on citizens’ environmental rights. The Convention is going to mean a significant extension of ordinary citizens’ and grass-root movements’ access to influencing environmental policy decisions; to most countries it represents a great challenge, and Danish environmental assistance ought to contribute to implementing this Convention in Eastern Europe.

Also the two new air pollution protocols (one on heavy metals and the other on persistent organic pollutants) and the adoption of a strategy for the phasing out of leaded petrol in all of Europe were important measures taken at the Conference to ensure adoption of a decision to phase out leaded petrol in the vast majority of the countries much faster than originally laid down in the Heavy Metal Protocol. Denmark has supported the preparation of national phase-out plans for leaded petrol in a number of Eastern European countries and will continue to assist the countries in finding a solution to this serious environmental problem as quickly as possible.

A parallel example is the Danish assistance to Eastern European countries to help them comply with the Montreal protocol on the phasing out of ozone-depleting substances. A Danish grant of only DKK 10 million for the preparation of national action plans has paved the way for a donation of DKK 700 m from the Global Environmental Facility to cover the Eastern European countries’ additional costs of converting their refrigerator factories and other CFC-using industries to CFC-free technology. This assistance has in fact contributed to eliminating 20% of the world’s total consumption of ozone-depleting substances.

But the Aarhus Conference also showed that there is still a long way to go before environmental considerations become an integrated part of sector policies, e.g. within the energy, agriculture and transport sectors. I believe that we ought to strengthen sector-integrated environmental assistance and that protection of the vast natural resources in Eastern Europe is a task to be prioritised more and more highly. In that connection, I should like to single out the Baltic initiative, where countries around the Baltic Sea are working to create a regional Agenda 21 for the Baltic countries with sustainable development for a number of sectors including energy, agriculture, transport and forestry. It is becoming more and more important to see Danish environmental assistance in an international perspective and in conjunction with the individual countries’ own possibilities and with the strengths and weaknesses of the other donor countries and of the international financial institutions. We must preserve the flexibility of the Danish scheme – for one reason because the differentiation between the countries has become greater, ie between the applicant countries and the countries not applying for membership of the EU, between first-and second-phase applicant countries, between countries in the North and in the South, between “old” countries and new countries, including the Central Asian republics and the former Yugoslavia, between democracies and countries where democracy continues under extremely difficult conditions.

Over the coming years, the Eastern European applicant countries’ admission to the EU will greatly influence the European agenda. These Eastern countries have committed themselves to accepting the EU’s political objectives and to implementing EU environmental legislation. Consequently, it is important that Danish assistance in these countries is targeted at the EU’s environmental requirements and that we pass on the Danish experience of environmental administration at a national, regional and local level to the greatest possible extent with a view to strengthening the Eastern countries’ own institutions.

In our day-to-day co-operation with the Eastern countries, we experience that their future membership of the EU is an important driving force for their environmental initiatives. We must expect considerable environmental gains once the countries are able to comply effectively with the EU’s environmental requirements, and Denmark can contribute to furthering this process as much as possible. And we have to take advantage of our flexibility to assist the EU approximation countries in identifying good environmental projects and ensure optimal utilization of the substantial EU resources earmarked for the approximation process.

Countries in Central Europe are being hitched to the environmental policy wagon, and so far, Western Europe has concentrated mainly on those countries. The next challenge will be the environmental integration of Russia, Ukraine and the other former Soviet republics. We must strive for closer co-operation between the countries of Central Europe and the states further east, which must also be enabled to fulfil their environmental obligations. This is the way the pan-European environmental process is developing and that is the course we should steer.

In September of this year, the Advisory Committee to the Danish Environmental Support Fund for Eastern Europe visited Russia. On this occasion, the members got a first-hand impression of the serious environmental and economic problems facing the country. Here, as well as in the other Russian-speaking countries, environmental problems directly affect public health. Just six months ago, we believed that despite great difficulties, economic stabilization had come to stay in Russia, but the IMF now expects a fall in the country’s gross domestic product of 6% for 1998, and we have probably seen only the top of the iceberg.

As a result of the economic crisis in Russia, it will become even more difficult to procure the necessary national co-financing of environmental projects, and the crisis also affects the other Eastern European countries. But we have an obligation to continue to help Russia and the other former Soviet republics – for the sake of people’s health, for the sake of the environment locally and globally and last – but not least – for the sake of bringing about the security we all desire.

2. Comments

By Erik Hoffmeyer, former Governor of the Danish National Bank,
Chairman of the Advisory Committee to the Danish Environmental
Support Fund for Eastern Europe

It is natural that the extensive assessment of the efficiency of the projects that over the years have been supported through DEPA’s activities in the countries of Eastern Europe has been an important element of the discussions of the Advisory Committee.

The effects of the assistance depend not only on whether the individual projects are implemented according to plan but, perhaps even more, on the local participants’ commitment to the projects.

In this connection, it is noteworthy that visits to the individual projects have left the impression that what has been established under the projects has generally served as a source of considerable inspiration.

Economic development in the Eastern European countries has been influenced by the stagnant economy of the European Union and by the shock of the Russian financial collapse in the late summer of 1998.

Both factors have contributed to curbing economic progress, but it seems as if the coming economic growth expected in the European Union will have favourable influence, not least on the countries in Central and Eastern Europe.

Also the favourable development in the Russian economy, which we hope will continue, contributes to stabilizing the economic conditions.

In the light of this, there should be a good basis for the co-operation on environmental investments in the Eastern countries to develop in a positive direction.

3. The Aarhus Conference

The Aarhus Conference 23 – 25 June 1998

Largest environmental conference in Denmark

The largest environmental conference ever held in Denmark – the Fourth Pan-European Conference of Environment Ministers – “Environment for Europe” with about 1,300 participants and more than 40 environment ministers took place in Aarhus 23 – 25 June 1998.

Part of the “Environment for Europe” process

The Aarhus Conference was the Fourth Pan-European Conference of Environment Ministers held under the title of “Environment for Europe”. The first conference was held on Czech initiative in Dobris in the former Czechoslovakia in 1991, and since then, conferences have been held in Lucerne, Switzerland, in 1993 and in Sofia, Bulgaria, in 1995.

With certain exceptions, the fall of the iron curtain in 1989 revealed a serious neglect of the environment in the former Communist countries. The main purpose of the “Environment for Europe” conferences is to create a co-operation forum for restoration of the environment in Eastern Europe and in the countries of the former Soviet Union pari passu with the economic reform process. Another purpose is to ensure common dynamics in the environmental policies of Eastern and Western Europe. The conferences are referred to as the “Environment for Europe” process, and the overall purpose may be described as creating environmental integration in all of Europe.

Most European countries, including Denmark, see the primary purpose of the process as being that of strengthening the assistance provided in Eastern Europe to protect the environment and nature. A few countries – such as the countries in Southern Europe – emphasise the distinct pan-European parts of the process. For geographical reasons, these countries are traditionally less interested in Eastern European issues.

Results of former conferences – in a historical perspective

Despite the poor basis of the Eastern European countries – economically and environmentally – the first three “Environment for Europe” conferences led to a number of important advances for European environmental policy:

	Environmental Action Programme for Central and Eastern Europe (EAP). The Eastern European countries are assisted in the elaboration of national environmental action plans attempting to identify the most important environmental problems, prioritising the steps to be taken and suggesting the most cost-effective ways of implementing the policies chosen. The programme is managed by a Task Force with representatives from the countries involved and the OECD-secretariat in Paris. The EAP was presented and adopted at the Lucerne Conference in 1993.
	Project Preparation Committee (PPC). The purpose of the Committee is to create increased dynamics in Western environmental assistance in Eastern Europe. The Committee is composed primarily of donor countries and international financial institutions like the World Bank, the European Bank for Reconstruction and Development (EBRD), the Nordic Investment Bank and the European Investment Bank. The Committee strives to “match” the donor countries’ donations and the banks’ funds available for lending. The assistance provided under this scheme is aimed primarily at a number of major environmental infrastructure projects. The PPC was established at the Lucerne Conference in 1993 and has since provided financing of 110 environmental projects to a total value of about DKK 4 Bn.
	Common European Strategy for Biodiversity and Landscapes. This strategy strives to promote the implementation of the international Biodiversity Convention signed at the UN Environmental Conference in Rio de Janeiro in 1992. The strategy ranges from traditional protection of landscapes to preventive action for the conservation of the species of nature. The purpose of the strategy is to ensure that, during their economic restoration, the Eastern European countries do not duplicate the natural destruction witnessed in the Western European countries. The situation is that in Eastern Europe there are far more and far larger unspoilt areas than in Western Europe. This is partly the result of less far-reaching industrialisation of agriculture and forestry and partly because extensive nature conservation areas were established at an early stage. The common European strategy was adopted in Sofia in 1995.

Moreover, the conferences have provided the framework for a number of joint discussions of other environmental issues, which have gradually led to a common understanding among the countries – despite their different situations and stages of development. Participants from Eastern European countries often emphasise that the conferences have contributed to a greater sense of environmental awareness in these countries and thus have strengthened the prioritisation of environmental policy issues. All in all, the conferences have thus developed into the most important forum for environmental co-operation between East and West.

Ten items on the agenda of the Aarhus Conference

As the result of several years of preparation for the Conference, the participants agreed on 10 items for the agenda.

The Publicity Convention

The main event at the Conference was the Publicity Convention, now named the Aarhus Convention. The Convention establishes a number of minimum rights for ordinary citizens regarding access to information about the environment, access to participating in environmental policy decisions through hearings and the like, and access to having the authorities’ environmental decisions tried in court. In many of the signing countries – in the East as well as the West – the Convention will lead to a marked extension of ordinary citizens’ and grass root movements’ access to influencing environmental policy decisions directly.

35 countries signed the Århus Convention – including all EU countries except Germany. There was widespread disappointment that Germany and Russia failed to sign the Convention – especially because during the negotiations, other countries had gone to great lengths in their attempts to secure both German and Russian acceptance. Subsequently, after the change of government, Germany signed the Convention.

Apart from this, the debate revealed great enthusiasm and support for the Convention on the part of the ministers. The NGO’s were considerably more reserved, as they found the Convention much too weak in a number of important areas (living modified organisms not included, very weak section on sanctions for non-compliance, many weak sections, etc.).

NGO’s on the rostrum

As something new, the international environmental grass root movements, the NGO’s, were allowed to arrange a special session in one of the afternoons of the Conference in connection with the debate on the new Publicity Convention. The NGO’s focused on public access to environmental information and the possibilities of participating in environmental policy-making in the European countries. The focus was on good as well as poor publicity practice in the environmental area in the participating countries. As something new, the NGO’s participated directly in negotiations on the Publicity Convention, and they regard the Convention as a very important tool in their future work.

The session resulted in a lively debate between NGO’s and ministers on public access to environmental information and access to participating in environmental policy-making. Subsequently, there seemed to be general approval of letting the NGO’s play a bigger role in the “Environment for Europe” process.

The European Environment Agency had updated a report on the state of the environment in Europe and parts of the former Soviet Union. The report showed that overall there has been progress in the environmental policy, but that this progress has so far led to only modest improvements in the state of the environment.

The report also showed that the nature of environmental problems is very different in Eastern and Western Europe. Western Europe has come a long way in fighting traditional problems like water pollution and waste, whereas diffuse sources of pollution like agriculture and transport cause increasing problems. Eastern Europe faces more or less all the environmental problems also facing Western Europe 20-30 years ago, but in addition, they have increasing problems caused by automobile traffic.

The report was welcomed by everyone as an essential basis of the future environmental agenda in Europe. Several of the EU applicant countries pressed for membership of the European Environment Agency prior to membership of the EU, and this is now being pursued. Besides, in the Declaration by the Environment Ministers, the Agency was requested to prepare a new report based on environmental indicators for the next “Environment in Europe” ministerial conference.

Increased action in the NIS

One of the main items on the agenda of the Conference was a debate on how to put more focus on the environmental situation in the NIS – the former Soviet Republics that have now gained independence (thus the name, Newly Independent States). The CEEC have come further in their efforts to restore the environment than most of the NIS. This is partly because the economic situation in the CEEC is improving again – after a serious economic setback and extensive economic reforms. This has put the countries in an economic position to do something about the environment. And it is partly because ten out of the CEEC are beginning to adapt to EU environmental directives, as this is a prerequisite to EU membership.

Environmental action is much more limited in NIS, and non-existing in many countries. Some of the economies are beginning to stabilise, while the economic recession continues in several of the countries.

It was decided to increase the focus on environmental problems in NIS generally. In concrete terms, it was decided that the two Environment for Europe institutions – the EAP Task Force and PPC – are to concentrate their efforts much more on NIS. It is the intention that the work of the EAP Task Force in the CEEC, to the extent that it continues, shall gradually shift to the Regional Environmental Center in Szentendre, Hungary. In this way, resources will be released for the work in NIS. At the same time, the EU Commission promised that its general support programme for NIS – TACIS – will prioritise environmental projects more highly in future. It presupposes, however, that NIS themselves give higher priority to the environment and improve their ability to identify environmental projects worthy of assistance. Finally, the decision to set up a number of new regional environmental centres in Moldavia, Georgia, Russia and Ukraine was confirmed.

Environmental financing

Restoring the environment in Eastern Europe will require large investments, which the countries will find it difficult to raise in their present economic situation. During the Conference, the EAP Task Force presented a study of total environmental investments in Eastern Europe in recent years and of Western assistance. The report showed stagnant assistance from Western donors as a whole – with the exception of Denmark, which is now the largest Western donor of environmental assistance in Eastern Europe – both absolutely and as a share of GDP per capita. About 90% of the investment funds are mobilised – on average – by the countries themselves, and some Eastern European countries which have applied for membership of the EU spend a larger share of their GDP on environmental investments than most Western countries.

NIS and the non-applicant countries in Eastern Europe are in a much weaker position than the applicant countries, and in their case, donations and loans from international banks play a substantially bigger role in environmental investments.

Even though it is clear that the bulk of financing will have to come from domestic sources, it was pointed out from many quarters that contributions from the West in the form of direct donations and loans are important as catalysts for domestic action. Besides, various domestic financing models were discussed – including national environmental funds accumulated through payments of pollution charges and fines for violation of environmental legislation.

The debate ended with the adoption of the recommendations of the Financing Report (annex 3), encouraging especially non-applicant countries to give higher political priority to the environment and to strengthen their institutional capacity to manage environmental investments. Moreover, all the recipient countries are encouraged to improve the generating of investment funds. In continuation of this, the document “Guidelines for the use of financial instruments of control in countries in transition to market economy” was adopted. These guidelines recommend, among other things, implementation of the “Polluter Pays Principle” and the internalisation of environmental costs in prices as a means of generating investment funds for environmental protection.

Two air pollution protocols

Another culmination of the Conference was the adoption of two new air pollution protocols under the ECE-convention “Convention on Long-Range Transboundary Air Pollution” (CLRTAP). The two new protocols put the signatories under an obligation to limit emissions of heavy metals (lead, cadmium and mercury) and POPs (Persistant Organic Pollutants such as DDT). The emission of heavy metals and POPs has gradually come to be identified as the main cause of a large number of diseases and damage to human beings, animals and plants. Since the protocols were signed in Århus, they were named the Århus Protocols. The protocols have been negotiated since 1990 and will extend the strict restrictions on the emissions of these substances which have already applied for some years in the EU and in North America.

34 countries signed the two protocols and a Declaration on the Phase-Out of Leaded Petrol. Furthermore, the Ministers adopted a “Declaration on Long-Range Transboundary Air Pollution” and a “Declaration on Persistent Organic Pollutants”.

Many ministers advocated an increase in the number of substances comprised by the two new protocols and intensified efforts to ensure that countries that have signed the protocols also comply with them. The debate also concentrated on securing financing of the continued development of the Convention, including the necessary scientific research, which has so far – to a great extent – relied on voluntary contributions. Furthermore, there was broad support for expediting negotiations of a new acidification/sulphur emission protocol. The new protocol will comprise acidification, eutrophication and ozonization at the surface of the earth and all major sources of these environmental effects in contrast to the former NO_x -protocol from 1988 comprising acidification and NO_x only. The new protocol aims at fixing emission levels by region on the basis of a principle of critical load.

Since then, negotiations of a new global agreement have been patterned on the POP-protocol.

Phasing out leaded petrol

In connection with the Protocol on Heavy Metals, a common European strategy for the complete phasing out of leaded petrol in all European countries was elaborated under Danish management. Surveys conducted in connection with the strategy show that technically as well as economically, it is possible to phase out lead in petrol completely by around 2005.

The common European strategy for the phase-out of leaded petrol by 2005 was adopted. In continuation of this, 32 countries signed a special declaration on the phase-out of leaded petrol in connection with the signing of the Protocol on Heavy Metals, cf. above. Another two countries have subsequently committed themselves to phasing out leaded petrol by 2005. The Declaration is not legally binding, but according to the Declaration, the 32 signatories undertake to phase out the use of leaded petrol as early as 2005, ie somewhat earlier than they committed themselves to by their signatures on the Heavy Metal Protocol, which does not require this phase-out to have been finalised until 2012. The parties agreed to evaluate the implementation of the strategy at the next “Environment for Europe” conference.

Recommendations for energy efficiency

A number of studies of and recommendations for energy efficiency had been prepared under Danish management. The background to the initiative was decades of subsidizing energy consumption and failure to carry out technological renewal, which has left Eastern Europe with a very high and inefficient energy consumption. The initiative was intended to support the implementation of the European Energy Charter’s Protocol on Energy Efficiency which entered into force in April 1998. Energy efficiency must be seen as a very important step towards compliance with the Kyoto-agreement under the Climate Convention. It requires limitation of industrial countries’ greenhouse gas emissions, which consist chiefly in carbon dioxide from incineration of fossil fuels.

The Ministers adopted a Policy Statement on Energy Efficiency and presented Guidelines on Energy Conservation in Europe. Some of the recommendations were that all energy price subsidies should be removed by 2005, that environmental externalities ought to be increasingly internalised in energy prices and that the countries should introduce efficiency standards for certain types of energy-consuming equipment. The USA and Canada chose not to endorse the guidelines, one of the reasons being that they had certain reservations about following the recommendations for removal of subsidies for energy consumption.

The Pan-European Biodiversity and Landscape Strategy

Since the adoption at the Sofia Conference of the Pan-European Biodiversity and Landscape Strategy, work has been undertaken nationally as well as internationally to implement the strategy. The strategy is very comprehensive, and there have been problems financing it – especially in Central and Eastern Europe. One of the most important – and most controversial elements of the strategy is the integration of biodiversity considerations into agricultural policies, which was also reflected in the debate at the Conference.

The Ministers adopted a Resolution on Biological and Landscape Diversity emphasising, among other things, the importance of better integration of biodiversity and landscape protection into sectoral policies and announcing initiatives in this respect – especially in relation to the agricultural policies in connection with the EU enlargement. The Resolution also expresses a positive attitude to a ministerial conference on agriculture and environment.

Role of private enterprises

A very large part of the pollution in Eastern Europe stems from industry, which has generally been run down and using obsolete technology. An important and necessary prerequsite to economic restoration in these countries is the modernisation of industry. Private enterprises from Western Europe investing in Eastern Europe can contribute to a substantial improvement of the environment by respecting the same environmental standards in Eastern Europe as in Western Europe. This will entail a considerable extra gain for the environment.

The debate at the Conference took the form of a dialogue between ministers and representatives of industry. There was general agreement that the Eastern European countries stand a good chance of taking advantage of the development towards a cleaner environment which many years of environmental politics have resulted in in Western economies in connection with the renewal of industry. As emphasised by means of a number of examples, this can be effected both by Western enterprises investing directly in Eastern Europe and by promoting the efforts made by Eastern European enterprises to introduce cleaner technology through the environmental policies pursued in these countries. With a view to accelerating this process, an advisory committee with representatives from industry will now be set up under the EAT Task Force.

Importance to Denmark

The Aarhus Conference ought to be seen in conjunction with the Danish support provided for the restoration of the environment in Eastern Europe. After the liberation in 1989, Denmark was one of the first countries to provide support for the restoration of the environment in Eastern Europe and is still one of the countries providing the greatest assistance – in absolute as well as relative terms – measured by the size of the population. The background to providing the assistance has been the wish to improve environmental conditions in Eastern European countries as well as the wish to reduce transboundary pollution from these countries which also affects Denmark.

In concrete terms, the “Environment for Europe”-process has helped target-orient the Danish assistance provided to Eastern Europe. The preparation of national environmental action plans in the Eastern countries has thus made it easier to identify the most environmental projects most worthy of assistance, and it has also become easier to join up with other Western donors and lenders for such projects.

In many ways, the “Environment for Europe”-process, which was originally based on an Eastern European initiative, has led to higher priority being given to environmental action in major parts of Eastern Europe. This has been possible only because of the creation of a common forum with participation of all the most important actors for restoring the Eastern European environment: governments, the EU Commission, international financial institutions, grass root movements, several UN organisations, etc.

This has ensured an exchange of information and mutual influence on attitudes and co-ordination of the steps taken.

The signing of the Aarhus Convention on citizens’ environmental rights has ensured citizens substantially better possibilities of exercising their influence on environmental policy-making in all of the signing countries. This will be the best guarantee of continued development of environmental protection in future.

4. Assessment

Assessment of Denmark’s environmental assistance: Conclusions and recommendations

In July 1997, the Danish Environmental Protection Agency (DEPA) initiated an external assessment of Danish environmental assistance to Eastern Europe since the start of the scheme in 1991 up to and including 1996. The assessment was made by Mikael Skou Andersen, Associate Professor at Aarhus University, in co-operation with PLS Consult and KPMG C. Jespersen, and was completed in the autumn of 1998.

The assessment consists of three parts: 1) A project assessment comprising questionnaires to all project contractors on the 496 projects supported during the period 1991-96 and a detailed assessment of 47 selected projects, 2) a country review dealing with the countries’ national environmental policies and their views on environmental assistance to Eastern Europe and 3) a main report with conclusions and recommendations.

Below is a brief summary of the main conclusions in the three parts of the assessment:

Project assessment

In the period under review, Poland was the main recipient, followed by Lithuania and Russia. The areas of assistance were concentrated on water and air, including energy production and sustainable energy.

At the beginning of the scheme, the main emphasis was on TA-projects, but from 1993, there was a marked shift in favour of investment projects. For the period as a whole, an average of 25% of the support was granted for equipment, but for the years 1993-96, this percentage reached as much as 35%.

342 completed projects showed that co-financing has been most pronounced in Poland, Lithuania, Slovakia and the Czech Republic, whereas it was very limited in countries like Romania and Ukraine. Some of the support was granted for preliminary projects with a view to catalysing loans from international financial institutions (IFI-loans). Twelve projects have thus secured a financing basis of approx. DKK 3.5 billion or well over three times as much as the support framework. At the same time, IFI financing paves the way for the participation of other donors.

The assessment of the environmental effects is based on DEPA’s database and on the responses obtained by means of the questionnaires sent to all project contractors. Generally, the environmental effects realised were more limited than had been estimated in advance. If, however, we include the expected environmental effects of projects still under implementation, the environmental assistance granted to Eastern Europe has meant a substantial reduction of emissions, especially of SO₂, but also to some extent of CO₂ and NO_x. In the area of waste water, the realised and expected environmental effects have been calculated at about 50,000 tonnes of BOD equivalent to treatment of waste water from about 2.3 million person equivalents. In a number of projects there has been a drop in the effect from the beginning till the end of a project.

The 47 selected projects were assessed on the basis of seven parameters:

	Involvement and co-operation
	Target fulfilment
	Co-financing
	Communication of results
	Environmental effect
	Contribution to sustainable development
	Transfer of relevant technology/know-how

This part of the assessment shows that the results of 35 projects out of the total of 47 projects were rated “satisfactory” or “very satisfactory”, while 8 were rated as “less satisfactory” and only 4 as “unsatisfactory”. None of the projects were rated as “very unsatisfactory”.

Country assessment

The country assessment has included 8 out of the 12 countries participating in the co-operation with DESF, viz: Poland, Lithuania, Estonia, Czech Republic, Romania, Russia and Ukraine. The main conclusions are the following:

	International environmental assistance plays a part, especially in the Baltic republics, where 35-50% of environmental investments are procured in this way. In Poland, the share is 5%, and the demand is here for technology and know-how. Measured as a share of the GDP, Poland and the Czech Republic spent the bulk of resources on environmental investments among the countries under review.
	Russia, Ukraine and Romania receive very limited environmental support from Western sources.
	Denmark has been the largest bilateral donor in Poland, Lithuania, Slovakia, Romania and Ukraine.
	The environmental assistance is characterised by a sharp distinction between countries with and without prospects of EU membership.
	The problems in Russia, Ukraine and Romania affect public health.
	The co-operation with the countries under review is generally good: Denmark is commended for supporting proper investments and for displaying great flexibility.
	More equipment and less consulting is requested, however.

Summarising the main report

Based on the project and country assessments, the main report includes summarising conclusions and recommendations and more strategic considerations. These are stated briefly in the following:

Conclusions

	The beginning was difficult, but since 1993, the support scheme has developed positively, with more emphasis on investments and on a closer dialogue with the recipients.
	Co-financing on the projects is 2:1 in proportion to the grants and has resulted in a return percentage of not less than 130%.
	The efforts made to persuade International Financing Institutions to grant loans have resulted in substantial amounts being provided as loans towards the restoration of the environment in Eastern Europe.
	On the basis of reviewing 47 representative projects, project implementation has been found satisfactory.
	Co-operation with the recipient countries’ national authorities has generally functioned well – the results obtained in Lithuania have been especially impressive. Recipients request more equipment, however, and less consulting.
	Environmental effects are good, but somewhat smaller than assumed earlier.
	The new tender procedure is estimated to lead to larger projects, but it is not very flexible and has to be be supplemented with the application model.

Recommendations

	include the health-related aspect, especially water supply;
	announce annual amounts available for projects;
	extend and improve the network of country co-ordinators;
	increase the hardware share to an average of 50%;
	improve the project assessment tools;
	encourage the participation of local project partners;
	introduce more standardised grants;
	be careful about waste incineration projects;
	establish fixed deadlines for consideration of project proposals;
	improve monitoring of major investment projects;
	improve the measuring of environmental effects;
	improve the visibility of Danish-supported projects;
	transfer grants directly to the Polish EcoFund;
	reconsider the need for assistance to the Czech Republic and Hungary;
	set up more reform requirements in Russia in co-operation with other donors;
	place environmental attachés at selected Danish embassies.

The final result of the assessment is quite positive. Generally, the DESF-scheme has yielded a satisfactory return.

DEPA’s follow-up on the assessment

Generally, DEPA supports most of the recommendations of the assessment. The form of the environmental support is adjusted on a regular basis, and in 1999 a new project manual will replace the former “Guidelines No. 14” from DEPA. At the same time, efforts are being made to tighten the internal procedures in a so-called “cookery book” with internal instructions, rules, etc. In a memo of December 8, 1998 to the Advisory Committee to the Danish Environmental Support Fund for Eastern Europe, DEPA explains how it intends to follow up on each recommendation. This memo has been reproduced in the following (with the recommendations quoted verbatim from the assessment):

“To include health-related aspects of environmental protection, particularly regarding water supply, more firmly in the DESF-mandate”.

Water-supply projects ought to be given higher priority than has so far been the case. It is logical to combine waste water projects with drinking water projects and regard it as a whole for the sake of total water investments in e.g. towns. Furthermore, the health-related aspects ought to be included more directly than has been the case, when transboundary and global pollution aspects together with nature conservation have been the most important parameters. In major parts of the overall strategy material, including the Environmental Action Plan for Eastern Europe, EAP, people’s health is given the highest priority, which is also generally the case in environmental action as such. Besides, it is often easier to promote environmental projects in these countries if the health aspect is emphasised in the arguments put forward. Especially in NIS there seem to be good possibilities of putting more emphasis on the health aspect in connection with environmental problems. This ought to be done especially when assessing water projects, but this can also be relevant in the area of waste and in connection with air pollution in towns. DEPA thus agrees that health aspects should be accounted for when assessing the results, although quantitative and qualitative parameters have to be identified first.
“To announce to the recipient countries the approximate amount available for projects in each country to allow the recipients to consider their priorities more carefully”.

Announcing the annual amount available for each country will make it easier for the recipient countries to prioritise among environmental projects for which Danish support is applied for. In 1998, the amounts available have actually been accessible in DEPA in connection with the first pipeline at the beginning of the year. In several cases, these amounts have been announced to the recipient countries, but not in any systematic way. Beginning in 1999 in connection with the first pipeline for the new year, these amounts will be reported by the Danish country co-ordinators at their first meetings with the recipient countries. In this connection, it is important to emphasise that the amounts available are guidelines only and cannot be transferred from one year to the next.
“To strengthen co-operation with the recipient countries by extending the network of country co-ordinators to all the involved countries”.

Since the conclusion of the assessment, local project co-ordinators have been appointed in Poland and Bulgaria. At the present time, there are no co-ordinators in Russia, Ukraine, the Czech Republic or Hungary. For the past two years, DEPA has been discussing the appointment of a co-ordinator in Russia, but unsuccessfully, as the Russian State Committee for Protection of Environment is reluctant. Intensive negotiations are likewise going on with Ukraine. As far as Hungary and the Czech Republic are concerned, DEPA finds that no local co-ordinators ought to be appointed, as it is recommended in the Assessment that support for these countries is being reconsidered, cf. below.
“To increase the use of the tender method and provide an effort to increase the average hardware share of DESF grants to a minimum of 50 per cent”.

At the present time, the distribution for 1998 between the tender and the application model is estimated to be about 50/50, in other words, a small increase on last year. At the end of the year, a final count will be made. The tender model has first priority, but the application model is a good supplement and ensures the full utilisation of the allocated financial framework. Furthermore, the application model ensures that a broader section of the Danish resource base, especially industrial enterprises, are in direct contact with the scheme, and it has turned out that applications rather than tenders increase the possibilities of co-financing. In addition, the recipient countries are widely interested in the application model.

DEPA finds that the recommendation to increase the hardware share of DESF grants to a minimum of 50% is too narrow and isolated. For the period 1993-96, the hardware share was 35% on average, and for the investment projects alone, the share was around 50%. Investment projects have a great share of consulting in connection with project design, project management, implementation of equipment, etc. It is difficult to imagine that this element could be much smaller if, at the same time, we wish to ensure the delivery, installation and optimal use of the equipment and the realisation of the objectives of the project. Moreover, further consulting is required if we wish to improve the ability to measure the environmental effects through ex-ante and ex-post measuring. Another factor is that the recipient countries’ co-financing to a great extent covers the purchase of hardware, which brings the hardware share to as much as 80% on average for investment projects.

Other factors seem to indicate that we ought to strengthen our TA. It is becoming more and more important to see Danish environmental support in an international perspective. In the EU approximation countries it is important that Danish environmental support is targeted at EU environmental requirements and that we, as far as possible, pass on our experience from Danish environmental administration at national, regional and local levels with a view to strengthening the Eastern countries’ own institutions. Furthermore, we have to take advantage of our flexibility to assist the EU approximation countries in identifying a number of investment projects to channel the substantial EU resources earmarked for the approximation process. If this is not done by donors, it is generally assessed that the recipient countries will not be able to design a sufficiently qualified project pipeline and invite tenders for the projects.

The need to help the recipient countries prepare projects for international financing is relevant not only in the EU approximation countries, but also to a great extent in NIS. Moreover, international co-operation will require more and more that we follow up on compliance with international conventions. We have to help the countries in the East meet their obligations in these areas, and we have to make an effort to get more countries to participate. Also this work will pull in the direction of a higher TA share.

And last but not least, in future, an increasing part of the environmental support will have to be spent on financing the TA-component in relation to projects under the MKŲ-scheme (Environmental Soft-Loan Programme for Eastern Europe), as MKŲ is used mainly for equipment. This should be followed closely in the near future, however, as it is a new model.

The conclusion is that DEPA agrees with the recommendation to focus on investment, but emphasises the need to think of alternative sources of financing equipment; otherwise, the resources available under the DESF facility will not be put to the best use.
“To advertise transparently the possibility to submit applications for DESF grants at specified deadlines, with indication of priority activ- ities and countries”.

The assessment team recommends making the application model more visible by advertising the possibility of submitting applications by specified deadlines, with an indication of priority activities and countries.

DEPA is planning to hold a public meeting at the beginning of next year to focus attention on the possibilities under the DESF, present the new project manual and, at the same time, advertise application rounds.
“To revise the project assessment system to include also financial cost-effectiveness methods, providing yardsticks for reasonable costs per unit of emission reduction”.

There is a need to improve the existing project assessment tools by using the cost-effectiveness criterion.

As an immediate follow-up on the assessment, DEPA has roughly estimated the pollution reduction per krone granted to waste water projects. As the result of waste water projects, there has thus been a nitrogen reduction equivalent to the nitrogen pollution from 3.2 million person equivalents. If the result of this treatment is compared to the total amount allocated to waste water treatment, the cost is in the region of DKK 100 per person equivalent. Danish consultants have calculated the corresponding initial costs of expanding Danish treatment plants as a result of the Water Environment Plan to have been in the region of DKK 135-150 per person equivalent. The figures are interesting, and it is certain that a better understanding of this can lead to more focused assistance.

A proposal for cost-effectiveness indicators will be prepared, ie a set of yardsticks for what may be regarded as reasonable costs of a given emission reduction, and this will be integrated into the project assessment.
“To encourage the participation of technical experts and companies from the recipient countries in the projects and to provide credit for such inclusion in the project assessment”.

It has turned out that involving Eastern European technical experts and firms in the implementation of the projects ensures a markedly greater success than if Danes carry out most of the tasks on their own. The project itself becomes much better technically, any problems arising are solved more quickly, the transfer of know-how is increased, and the possibility of spreading the results increases. The criterion is already included in the scoring system and in the assessment parameters for the tender projects, but it is necessary to give this parameter a more central place in connection with the assessment of the project contractor’s qualifications. In principle, the Eastern Europeans ought to pay for these services themselves, but from Danish quarters, there should be a better understanding of the financing of such services. This is already the case to a great extent today.
“To develop more routine project packages than can be replicated with fixed shares of DESF grants, in particular for waste water treatment, coal-to-gas conversions and cleaner technology, and in general to allow replications of projects where reasonable”.

DEPA takes up a sympathetic attitude to the recommendation to introduce more standardised package solutions. Even today, there are a number of examples of projects that are replicated, both within the same country and in other countries, such as the “no-dig” methods of sewer rehabilitation, waste water treatment, removal of stocks of old pesticides, geothermal plants, decentralised power heating, projects in the area of nature, etc. It is true that there have been insufficient replications of projects. This is a problem, especially in the Russian-speaking countries, and the reason is that these countries cannot afford to replicate the projects in other towns or in other factories, whereas replication has been much more frequent in for example Poland. Therefore, it is important to emphasise the possibility of replication whenever it is realistic, and, at the same time, to make greater efforts to ensure this replication and to follow up on the projects. This ensures the greatest environmental effect of the least resources.

1999 will see the development of more of such package solutions in areas with limited possibilities of replication.
“To avoid projects related to waste incineration, except where clear and firm commitments can be provided ex-ante by the relevant authorities”.

So far, DESF has been reluctant to establish waste incineration plants. Several preliminary projects have been established, but until this date, no plants have been opened. In connection with waste incineration plants, it is very important to have clear indications of attitudes on the part of the recipient countries. But the question should be seen in the context of the concrete environmental problem that the incineration of waste could solve.

Whenever possible, DESF follows the Danish prioritisation regarding waste removal – ie 1) cleaner technology; 2) recycling, 3) incineration; 4) depositing – and international rules (agreements, conventions and EU Directives) applying to the provision of grants for waste projects in Eastern Europe. According to Danish experience, for a large number of waste fractions, incineration is a better solution than depositing – also from a purely environmental point of view. But at the same time, from a technical-economic point of view – incineration is a far more complex solution, which it is extremely difficult to implement safely in Eastern Europe.

An analysis of the possibilities and limitations of the incineration solution carried out in the form of a feasibility study – also accounting for the compliance of the plant with EU legislation and international agreements – is a prerequisite to supporting incineration as a solution to a waste problem.

Incineration solutions are necessary in the future waste treatment structure in Eastern Europe for two primary reasons: First, there will be fractions of hazardous waste that cannot be treated any other way, and incineration is the internationally recommended solution to the problems of the vast stocks of old pesticides in Eastern Europe that represent a serious environmental and health threat. Second, incineration ranks higher than depositing in an EU framework, and the EU landfill directive imposes limits on the amount of biodegradable waste to be deposited, which animates the Member States to incineration of refuse and/or increased recycling.
“To provide technical assistance to further the strengthening of environmental funds and establish transparent and accessible information systems in the environmental ministries”.

Strengthening the environmental funds is already a high-priority activity which DESF will continue to work on. Greater transparency and access to information in the Eastern European environmental ministries will be promoted as a follow-up on the Publicity Convention on citizens’ environmental rights, the “Aarhus Convention”.
“To establish fixed and guaranteed deadlines for consideration of project proposals”.

Under the application model, the maximum time for consideration of applications is four months. If the applicant is asked to elaborate on specific questions, the time for consideration may be prolonged, but the time allowed for such questions should not be included in the four months. Several project contractors have expressed the wish to have more precise indications of when to expect a reply.

In future, the practice of handling applications will be tightened in the project manual and in internal guidelines, so that applicants will feel better informed.
“To introduce firm procedures for monitoring and inspection of DESF investment projects, possibly also by third parties”.

Monitoring of projects ought to be improved, in particular in the form of inspection. The practice followed in several projects today and to be incorporated into future guidelines is the following: An inception report is to be handed in after about three months, and subsequently, quarterly progress reports and, at the conclusion of the project, a final report is to be submitted.

In addition, it is the country co-ordinator’s responsibility that the individual projects are visited by DEPA to the extent possible, but for projects of longer duration (2-3 years), the project ought to be visited at least twice; once at the beginning of the project, for example in connection with the inception meeting, and once during the project period, preferably towards the end of the project, where there will be more to see in the case of investment projects. In certain cases, responsibility for the project visits can be assigned to the local project co-ordinator, who also has the responsibility for a closer follow-up on the projects locally.

Experience has shown that institutional projects often have to be followed more closely, for example by the consultant participating in some of the project management meetings. In connection with the preparation and planning of the individual project, the extent of the need for inspection will be decided upon. Standards for inspection are being elaborated as part of the internal guidelines.

DEPA is also considering whether to introduce mid-term assessments in the case of major investments and TA projects running for more than three years or in the case of problem projects. Subsequent project assessments are made and will continue to be made in selected cases. These assessments should be conducted by third parties.
“To introduce firm procedures for ex-ante and ex-post monitoring of emissions, in order to substantiate environmental effects of DESF projects”.

It is necessary to find a way of measuring and verifying the actual environmental effects of the projects. Measuring programmes are expensive, but have to be initiated in the case of major investment projects. In future, it will be required that a “base line” study is carried out during the inception phase, including an ex-ante picture of emissions based on actual measurements. In connection with the finalisation of the project, an ex-post picture of emissions will likewise have to be drawn up – again based on actual measurements. It is possible that these measurements should be made in a follow-up phase if it is not possible to measure the effects immediately after the conclusion of the project.

In addition to obtaining a better substantiation of the actual environmental effects, it will be possible to measure a number of derived effects at the same time. In waste water projects, these derived effects include reductions in the load of heavy metals and substances harmful to the environment, improved sludge processing, working environment conditions and energy optimisation.

In the nature area, other indicators should be introduced.
“To improve the network of country co-ordinators by annual seminars and a more precise assignment of responsibilities”.

There is a need to strengthen co-operation with the local project co-ordinators and in that way reap full benefit of their services in relation to concrete projects. At the beginning of 1999, a seminar will be held to bring together all the local co-ordinators in Copenhagen in order to systematise the co-operation between the local project co-ordinators and the employees at DEPA responsible for the individual countries.
“To extend and improve informational activities on the supported projects, for instance through DESF signposting at major investment projects”.

It is important to improve the visibility of projects under the DESF scheme. Experience so far shows that we get too little publicity on the many good projects. Denmark is the largest bilateral donor in the environmental area in Poland, Lithuania, Slovakia, Romania and Ukraine, which ought to be known in the individual countries. In future, it will be demanded in connection with major investment projects that information about the project is publicised during the establishment of the project, and that a sign is posted after its completion that the project received support from Denmark.

Concerning the spreading of information about DESF, we have got off to a good start in 1998. All the country programmes are described in an English publication, and the Romanian publication was published recently with a review in English as well as Romanian of all Danish-supported environmental projects in the country. The publication is also accessible on the Internet.

A number of other information initiatives, including a new information strategy, are in the pipeline. Among other things, the strategy will contain proposals for joint presentation material, logo, etc. for the DESF Facility, Danced and MIKA North.
“To consider untying the assistance to Poland by placing financial means directly in the Polish EcoFund in return for a seat on the Board, as other countries have done”.

Other countries such as Finland, the USA, France and Switzerland – and most recently Sweden – have transferred money directly to the Polish EcoFund as part of the “debt-for-nature” SWAPs.

An earlier proposal to do the same was rejected by DEPA, the main reason being that it will be more difficult to control the funds than in the case of normal bilateral support. As a starting point, one might say that it is a new type of support and that it is necessary to perform a consequential analysis of what the proposal entails.

In 1999, DEPA will perform an analysis of advantages and disadvantages of transferring funds to EcoFund.
“To reconsider the need for assistance to the Czech Republic and Hungary”.

Earlier, considerable environmental activities were carried out in Hungary and the Czech Republic. The assistance granted to Hungary was quite small in 1996, however, and no projects were implemented in 1997 or 1998. Hungary belongs to the more affluent countries which have come a long way in their transition process from planned economy to market economy, and the country has not been very interested in cooperating under the DESF Facility. In the light of this, it must be just a formality to declare assistance to Hungary discontinued, but to retain the possibility of providing assistance in special cases to individual projects.

With the Czech Republic, on the other hand, co-operation has been quite substantial over the years, and the Czechs regularly apply for assistance. However, activities in the Czech Republic ought to enter a phase now with the focus over the next two years on EU approximation, primarily in the form of legislation, etc and project preparation for major EU funds. After that, activities in the Czech Republic should be reconsidered.

Poland is at a similar level of development as Hungary and the Czech Republic, but Poland is a firmly integrated part of the Danish Baltic Sea Initiative. For this reason, the support for Poland cannot be discontinued.
“In Russia, Ukraine, Belarus and Slovakia to improve donor co-ordination in order to tie the Western assistance more closely to suggestions or requirements for reforms of environmental policy and its institutions”.

The international co-ordination ought to be tightened in relation to Russia, Belarus and Ukraine, whereas Slovakia is already sending other signals after the formation of the new government. The coordination should be made primarily in the established fora, such as the informal Nordic co-operation and the Project Preparation Committee (PPC), where donors and international sources of financing co-operate.
“To strengthen the co-ordination with other Danish ministries and the recipients as well as with the wider economic and political issues at stake in the region, by placing environmental attachés (with environmental insight) at Danish embassies in Warsaw, in Russia and in one of the Baltic states, if possible, at a reasonable level of cost”.

DEPA agrees that appointing environmental attachés at the mentioned embassies would be a strengthening, but such attachés would have to be financed out of administration funds. Experience from Danced shows that one person will cost about DKK 1.8 m a year, which it would be unrealistic to draw from the limited administrative funds of 3.5% of the framework. However, co-operation with the embassies will be strengthened in future through a more systematic exchange of information.

Denmark’s environmental assistance
to Eastern Europe

– feature article on the assessment of environmental support for Eastern Europe by Mikael Skou Andersen, Associate Professor, Aarhus University ^[3]

Increasingly, Denmark’s support for the transition in Eastern Europe consists in environmental assistance. In 1998, the environmental assistance came to approx. DKK 655 million, equivalent to 55% of the total Danish support for countries behind the former iron curtain. Denmark is thus the Western donor country focusing most on providing environmental assistance to Eastern Europe. The assistance is provided both through DEPA’s environmental support scheme and under a number of sectoral programmes in various ministries. In addition, there is the Environmental Investment Facility under the Industrialisation Fund for Eastern Europe and the Environmental Credit Scheme under the Export Credit Scheme.

So what are the results of the environmental assistance? The first complete and independent assessment of the assistance provided by DEPA in Eastern Europe in the years 1991-96 is now available. The assessment has brought the Danish environmental projects into focus and rated the results. At the same time, the co-operation between the Danish authorities and the environmental authorities in the Eastern European countries has been assessed. This article will first give an overview of the development and state of the Danish environmental policy in some of the principal recipient countries and subsequently present an assessment of the results of the Danish environmental assistance.

In the revolution year 1989, the protests against the planned economies’ wearing down of natural resources and the effects thereof on the citizens’ health were one of the most important themes in the showdown with the old regimes. Immediately after the fall of the Wall, new environmental ministries were therefore set up and new laws passed to control pollution all over Eastern Europe. The economic transition process to market economy has meant, however, that the populations in Eastern Europe have got other problems to cope with. The attention paid to the environment has been fading, but this has not made the problems any less serious.

On the contrary: the environmental and energy problems are an integrated part of the transition problems of Eastern Europe. There is still a large waste of energy and materials in industry and a large economic loss resulting from the worn down energy and water supply systems. Insufficient waste and waste water treatment affect public health in a negative way – e.g. when sewage water flows into the water supply systems and spreads diseases and infections. Regional security problems are aggravated because of the large energy consumption and the dependence on imported energy, not least from Russia.

Among the political decision-makers in Eastern Europe today, there is limited understanding of the need to link environmental and economic modernisation. In several of the countries, especially in Russia, environmental politics receives very low priority. But there are also countries where the environmental policy pursued is more active than it used to be, especially in Poland.

Western assistance to solve environmental and energy problems continues to be modest, both in view of the need and compared to the share financed by the Eastern Europeans themselves. Assistance is provided first and foremost by the Nordic countries and by other relatively small European countries like Holland, Austria and Switzerland. Large countries such as the US and England provide consultancy only, but no direct support for investments. The international financial institutions, like the World Bank and the EBRD, work slowly and elaborately and, relatively speaking, have granted limited credits for environmental purposes. EU support programmes have considerable budgets also for environmental purposes, but especially the TACIS programme does not work fully professionally in the environmental area.

The Eastern Europeans therefore have to pay for and finance the bulk of the environmental restoration themselves. In countries like Poland, the Czech Republic and Russia, Western assistance accounts for less than 5-7% of the total environmental investments. In the smaller Baltic countries, the environmental assistance is a more decisive element, however, as it amounts to between 35% and 50% of environmental investments.

Countries like Poland and the Czech Republic must be estimated as having an environmental modernisation capacity which is relatively large for the region. This is the result of important decisions that were taken in the years of revolution and which bind the decision takers today. In Poland, it was decided in 1989 to establish independent ecofunds at national as well as local levels, which by means of environmental charges on pollution and consumption of resources were enabled to raise the necessary capital for environmental protection. The national fund Fundusz is independent of the ministry of the environment and the finance ministry and has been responsible for well over half of the environmental investments made during the 1990s. At the same time, part of Poland’s foreign debt was converted to the independent EcoFund. This has made considerable progress possible, in particular within waste water treatment, which now approaches the level of Southern and Central Europe. At the same time, the Polish Ministry of the Environment is relatively strong with extensive competencies.

In the Czech Republic, the velvet revolution led to the introduction of stringent laws, especially in the field of air pollution, as suggested by the independent and influential Federal Environmental Commission. An environmental fund was also established, but it was weaker and had fewer funds available than the Polish EcoFund. With the “velvet divorce” between the Czech Republic and Slovakia in 1993, the Environmental Commission was dissolved, however, and the environmental ambitions of the two republics soon decreased. The air pollution laws remained in force, however, and by applying the “polluter-pays principle” have led to very substantial investments in industry. The result of this is that, today, the Czech Republic is the country in Europe spending the largest proportion of its GDP on the environment. At 2.3%, it is somewhat higher than Poland’s 1.8% and substantially higher than Denmark’s 1.1%. Also in the waste water area the Czech Republic is well underway. Under Vaclav Klaus, there was a shift towards more traditional growth-oriented policies, with practically no new environmental initiatives.

In Slovakia, Meciar’s regime led to what can best be described as dismantling of environmental politics. The ministry of the environment lost important areas of competence, environmental expenditure on the Budget was reduced to a minimum, and environmental organisations were persecuted. Where pollution declined, this was mainly the result of a decline in production.

After the collapse of the Soviet Union, the three Baltic states were in a special situation. It was not until 1988 that Gorbatjov set up a Committee for the Environment, and it had only weak regional units in the Baltic republics. After the independence, these units were supposed to take over the role of independent ministries. In the small Estonian ministry of the environment, the staff of only 100 has elaborated more than 37 new acts since 1991. The economic situation has been much inferior to that of Poland and the Czech Republic, however, and the Estonian EcoFund disposes of limited resources. Lithuania experienced the most disastrous decline in GDP; from 1991 to 1996, GDP fell by 60% after the links had been cut off to the Soviet planned economy. An independent ministry of the environment was not set up until 1994, and there is no environmental fund. The Baltic republics, however, received very considerable environmental support from especially the Nordic countries. While Finland was the most important donor country for Estonia, Denmark developed co-operation with Lithuania in particular. Considerable progress has been made, especially in the area of waste water treatment, (modern plants are being constructed in most large towns), and funds have likewise been provided to strengthen the administration itself. Even though the Baltic countries share a number of problems, they are in a class different from that of the other former Soviet Republics when it comes to environmental politics.

The prospects for development are dismal in Russia, also in the environmental field. The ministry of the environment established under Gorbatjov was dismantled again in 1996 and replaced by a State Committee devoid of influence and without representation in the government. Competences concerning the use of raw materials and resources were transferred back to the traditional production ministries. The small environmental fund had to spend its scarce funds on paying salaries to the employees of the State Committee. And, at the same time, the problems are enormous. Millions of tonnes of poisonous waste are being deposited in open lagoons. The drinking water supply is not bacteriologically safe for more than half of the population. There are practically no political reforms or initiatives in the Duma aimed at the vast energy and resource wastage in Russian industry and in the energy sector. In Ukraine, the situation is not much better. Cities of more than a million inhabitants like Lviv and Sevastopol and others are supplied with water only three hours in the morning and three hours in the evening, as the water supply pipelines are perforated – and from the leaky sewers, waste water flows into the drinking water pipeline system. The costs of cleaning up after Tjernobyl still take up large sums, and the country continues to be fully dependent on Russian gas and oil.

In Romania, there is a little more light at the end of the tunnel, with political and environmental reforms having been limited until recently. It is true that pollution here is more serious than in the other former buffer states. But even if Romania is not among the first group of countries to become members of the EU, the country attaches great importance to living up to international conventions, especially in the area of nature protection. So far, the country has received only modest attention from international donors, but thanks to Danish initiatives, a national environ- mental action plan has been drawn up, and the Romanian ministry of the interior is fully aware of Danish competences within the area of cleaner technology.

In conclusion, it can therefore be said that despite many problems that remain to be solved, Poland and the Czech Republic have come a long way and have spent internal resources to an impressive degree. In an intermediate group, we find the Baltic countries, which have made some progress, especially thanks to Nordic environmental assistance. Russia, Ukraine, Romania and Slovakia make up the environmental rear guard, as the problems here are still enormous and political reforms are relatively limited.

The Danish environmental initiatives in the region should be assessed against this background.

From 1991 to 1996, DKK 1.2 billion was spent on support for 496 environmental projects in the Eastern European countries. The support has been in the form of bilateral assistance, where applications and projects have been formulated by Danish enterprises and institutions, but subject to approval by the recipient countries.

During the first two years, the economic framework was modest, but the support has gradually been increased. Political priority has been given to the countries in the Baltic region. Well over 30% of the funds have been spent on projects in Poland, which has been the main recipient country, especially during the first years. Well over 26% have been spent on Russia and Lithuania respectively, where initiatives gained momentum from 1994. The principal activity areas have been waste water treatment, sustainable energy projects and air pollution abatement. 37% of the funds have been spent on projects related to waste water. Substantial grants have also been made towards institutional strengthening of environmental management and towards nature protection.

It is no easy task to provide effective environmental assistance, especially not when it has to be provided on bilateral terms. How do we ensure that Danish competences within environment and energy can be matched by the needs and the priorities of the recipient countries? How do we ensure that the assistance reaches the recipients without drowning in bureaucracy and perhaps corruption? How do we adapt Danish technologies to conditions in the recipient countries? Many of the same questions that are raised in relation to traditional development aid may also be raised in relation to environmental assistance.

Assessment of the environmental assistance to Eastern Europe has therefore been quite extensive, and in addition to a main report, there are now two part reports and eight country reports – a total of more than 600 pages to shed light on the problems and results. Danish project contractors have been interviewed and a representative sample of 47 projects have been subject to in-depth assessment and analysis. Authorities, stakeholders and independent experts have been interviewed in eight recipient countries.

The assessment shows that after some uncertain steps during the first two years, environmental assistance has now found a form which, overall, has led to satisfactory results. When assessing the selected projects according to a systematic method both in relation to their own objectives and in relation to the general objectives of the environmental support scheme, it turns out that four projects are rated unsatisfactory, while eight projects are rated less satisfactory and 35 satisfactory or very satisfactory. What characterises the good projects in particular is that the action has been taken to solve serious environmental problems, that the goals have been achieved and that they have a high demonstration value.

The problems experienced during 1991 and 1992 had to do with the fact that at that time, assistance was mainly in the form of consulting and relatively non-committal East-West exchanges of views and experience. The political and administrative chaos immediately after the upheavals made it difficult to identify concrete projects, and during this period, too many resources were spent on mapping out and report writing.

In 1993, however, partly on Eastern European initiative, a more investment-oriented strategy was initiated, where consulting was combined with a transfer of Danish environmental equipment, often as part of larger project packages with other financial sources (environmental funds, municipalities, utilities) contributing as well. Two-thirds of the funds were spent on investment projects, but consulting has continued to be an essential element. Since 1993, the hardware share, ie the share of the funds spent on environmental technology as such, has been well over 35%. The philosophy has been to ensure that the Eastern Europeans got the right equipment through proper project preparation and to supply consulting on the use of the equipment. In 1996, the tender model was introduced for investment projects, eventhough the possibility of submitting applications still exists.

In rounded figures, the more investment-oriented strategy has had the effect that since 1993, support has been granted annually for about 40 major environmental investment projects in Eastern Europe. These projects include modernisation of treatment plants, rehabilitation of water supply, establishment of geothermal plants, windmills, filters for smoke removal, cleaner technology in industry, etc. Danish resources have not been sufficient to cover all the project costs, and the Eastern European countries have therefore co-financed a great part of the activities – as a matter of fact, Danish grants come to only about one-third of the project costs. Co-financing is highest in Poland and lowest in Ukraine and Romania.

The extensive co-financing has led to an additional export of Danish environmental technology. It is difficult to calculate the size of exports precisely, but for the completed projects it amounts to DKK 400 m, and as many of the largest and most investment-intensive projects are still being implemented and therefore are not included in the figure, there is every indication that the final export effect will be substantially greater.

Another aspect of the investment strategy is the efforts to obtain loans from the international financial institutions such as the World Bank and the EBRD. The lack of knowledge of project assessment and financing in Eastern Europe has made it difficult to take up loans, but the pilot projects under the Danish scheme have triggered the provision of very substantial amounts of loans totalling DKK 6 Bn, which is several times the Danish financing framework. Some of these loans go towards water supply projects in St. Petersburg and in the Crimea, where the need far exceeds what Danish funds can finance. Some of these loans are also expected to lead to export of Danish equipment, but there are no strings attached.

Consulting engineering firms in particular have played a dominant role as project contractors under the DESF Facility. Part of the explanation for this is the conditions you have to work under in Eastern Europe and the relatively narrow Danish resource base in this context. A total of 20 consulting engineering firms are responsible for two-thirds of the activities under the scheme, which may cause misgivings. Suppliers of equipment and machinery contribute via the advisors’ projects, however, and thus benefit greatly from the scheme.

On the part of Eastern Europe, scepticism has been expressed because of the high cost of using Danish consultants, and the Eastern Europeans generally prefer more hardware and less consultation. It is emphasised that Eastern Europe has a high level of education and knowledge at its disposal, and that these countries are therefore primarily interested in spending the funds allocated on advanced Danish environmental equipment. But since it is the Danish enterprises that formulate the projects, it cannot be ruled out that consulting engineers have an interest in increasing the consulting share at the expense of the equipment share. At the same time, the absence of fixed framework amounts for activities in the individual countries or regions gives the recipients an incentive to accept the projects suggested, even if the hardware share is smaller than might have been wished for. Therefore, there is reason to think about how the hardware share of the projects can be increased, and the assessment recommends that in future, the hardware share accounts for 50% or more. This would also make it possible for more enterprises – especially small Danish enterprises – to contribute under the scheme. Compared to quite a few other donor countries that do not grant any assistance to investments at all, but only to consulting, Denmark is recognised in all countries as one of the few providing “real” assistance. At the same time, Denmark has been the largest bilateral donor in Poland, Lithuania, Slovakia, Romania and Ukraine.

The more investment-oriented policy pursued since 1993 has also yielded significant environmental results, even if they are somewhat more modest than originally estimated in the air pollution area. As part of the assessment, the environmental effects of completed and ongoing projects have been measured. As some of the largest and most ambitious projects funded in 1995 and 1996 had not been finalised in mid-1998, a substantial share of the environmental effects has to be indicated as expected. The total results are expected to be, among other things, a rehabilitated waste water treatment capacity of 2.3 m person equivalents, a reduction of SO₂-emissions equivalent to one-quarter of Denmark’s own emissions and a CO₂-reduction equivalent to 0.8% of Denmark’s emission. The environmental effects are distributed very unevenly over the projects, and by aiming more at environmental effect per krone spent, it must be expected that more significant reductions can be achieved under the scheme.

Do you get more environment for the money in Eastern Europe? It depends on what you would otherwise have spent the money on. For the approx. DKK 1.2 Bn granted in environmental assistance from 1991 to 1996, we could, for instance, have built about 50 km of motorway in Denmark. But the interesting question is whether the pollution reduction per krone is bigger in Eastern Europe than in Denmark – and how much bigger. During the assessment, it has not been possible to answer that question, for one reason because of the very diverse projects and their composite financing base. But it is our impression from working on the assessment that pollution reductions to be realised in Eastern Europe exclusively by means of Western technology and Western consultants are not necessarily much cheaper than if the projects had been implemented on Danish ground. On the other hand, co-operating with the Eastern Europeans and involving them in the projects makes it possible to take advantage of the lower factor costs in the East.

The assistance provided to promote environment and health in Eastern Europe should not be provided in the only expectation that it is cheaper, but especially because it can catalyse a more active and sustainable environment policy that can contribute to stabilising the recipient countries’ economies. With the results already achieved in the EU accession countries Poland and the Czech Republic, it will now be possible to step down environmental assistance to the benefit of countries where problems are still very serious – Russia in particular. In the case of Russia, however, Denmark, together with the other bilateral donor countries, will have to accompany the assistance by certain demands or proposals for environmental reforms, in particular the setting up of environmental funds and the introduction of user payment for waste water and energy. From a Danish point of view, dissolving the Russian ministry of the environment is not acceptable either.

The provision of environmental assistance has clear security undertones, however, and should also be provided from a security perspective. By helping the Eastern countries with know-how and expertise within e.g. water, waste and energy, Denmark helps solve basic problems relating to standards of living and economy, signalling that their problems are not irrelevant to us.

Mikael Skou Andersen, Associate Professor, Ph.D., Department of Social Science, Aarhus University, Denmark.

“Denmark’s environmental assistance to Eastern Europe 1991-96: an assessment of project achievements, environmental policy performance and the role of foreign assistance. In co-operation with PLS Consult and KPMG. Copenhagen: Denmark’s Environmental Protection Agency”.

5. Stock-taking of the MKŲ-scheme at the turn of the year

Environmental Soft Loan Programme (MKŲ)

In the Appropriation Act for 1998, a sum was allocated as part of the Environment and Disaster Relief Facility (EDRF) for Central and Eastern Europe to a “soft-loan scheme”, the Environmental Soft Loan Programme for Eastern Europe with emphasis on the Baltic Sea region (MKŲ). The programme is administered by the Danish Agency for Development of Industry and Trade (the Danish State Export Credit Agency) in co-operation with DEPA. For 1998, the appropriation amounts to DKK 45 m, corresponding to an expected project portfolio of DKK 135 m. As a starting point, the individual projects will be subsidised with about 25% of the amount to be financed (project sum minus down payment). Furthermore, a paid-up guarantee equivalent to typically 5% of the project costs is granted.

The purpose of the Environmental Soft Loan Programme for Eastern Europe is to make financing available to environmental projects in Eastern Europe and in that way promote investments in environmental plants. For 1998, water, waste handling and treatment and district heating were selected as areas within which projects would be prioritised. As the scheme consists in subsidised credits, the OECD-rules, the “consensus rules”, apply. The scheme is thus untied, which means that no discrimination may be made between Danish and foreign companies. International tenders must be invited for all applications.

Stock-taking

In March 1998, a round of applications for environmental credits was initiated with May 1998 as deadline for applications. The round of applications was initiated by means of an information campaign aimed at the clients of the Danish Agency for Development of Industry and Trade.

At the expiry of the deadline for applications, 30 applications had been submitted for environmental credits. The applicants were mainly Danish suppliers and consultants, but also potential buyers in Eastern Europe were among the applicants. The projects submitted were practically all geographically placed in the Baltic Sea region. In total, MKŲ-assistance to a total amount of about DKK 70 m for projects amounting to about DKK 220 m was applied for. In addition, after the round of applications had been completed, DEPA has identified a number of projects totalling DKK 100 m with expected subsidies of about DKK 30 m.

At the end of the year, five projects had received preliminary approval. The projects comprise two district heating projects in Romania, one geothermal project in Slovakia and two waste water projects in Poland. The projects require total investments of DKK 89.8 m, of which DKK 28.6 m have been promised so far (out of which DKK 7.6 m is in the form of premium subsidies). Of the five approved projects, the geothermal project was identified in connection with the round of applications.

Experience

Originally, the MKŲ-scheme was intended as a scheme allowing suppliers, consultants and other Danish actors on the environmental stage to use soft financing for the supply of equipment for environmental projects/plants. The application round was aimed at Danish suppliers and consultants normally making up EU’s customer base.

Besides the application round in Denmark, the scheme has been publicised in e.g. Poland, Estonia and Lithuania with a view to ensuring that the purchasing countries are increasingly involved in identifying projects. Similar projects have been planned for Latvia and the Czech Republic. The MKŲ-scheme enters into DEPA’s considerations of financing projects prepared under the DESF-Facility.

Experience from the application round showed that only few of the applications could serve as a basis for a call for tenders in their present form. In DEPA’s assessment, there was a need for more documentation, for a higher degree of finalisation of the projects and for an increase in the amounts applied for.

Efforts have been made to incorporate experience from the 1998 application round in the 1999-scheme. The information material thus describes the requirements regarding completion of the projects in greater detail. Moreover, an attempt has been made to incorporate incentives for the consultants also to prepare applications. Finally, applicants are encouraged to contact DEPA and the Danish Agency for Development of Industry and Trade earlier in the identification phase for an advance assessment of whether the projects may receive favourable treatment.

6. Stock-taking of sector-integrated environmental assistance

Sector-integrated environmental assistance in the Baltic Sea region

In May 1997, the Government adopted an overall strategy for environmental assistance to Eastern Europe with special emphasis on the Baltic Sea. According to this strategy, part of the environmental assistance provided to Eastern Europe has to be provided by Danish sectoral ministries for implementation of Baltic Agenda 21 and in preparation of EU membership of the former Eastern European countries in the Baltic Sea region.

Baltic Agenda 21

Baltic Agenda 21 is the first regional Agenda 21 to follow up on the Rio Conference. It was the prime ministers of the Baltic Sea region who, at a meeting in Visby in May 1996, decided to draw up the Agenda. The decision was endorsed at the meeting of the Baltic Sea Council in Kalmar in June 1996, and, in the same year, in Saltsjöbaden in October, the environment ministers adopted a declaration with further details for a Baltic Agenda 21.

The fundamental idea of Baltic Agenda 21 is that economically important sectors of society shall assume responsibility for development and economic growth taking place on a more sustainable basis than has hitherto been the case in the regional development process. The environmental obligation has to be integrated into the economic and political development in sectors like industry, energy, agriculture, fishery, forestry, transport and tourism. In the process of drawing up Baltic Agenda 21, these sectors have been responsible for fixing goals of sustainable development within their own sectors and for elaborating sectoral action plans, and they have likewise been responsible for the implementation. The environment ministries play a more secondary role in the process as consultants and co-ordinators.

The goals and action plans for sustainable development prepared by the sectors and the plans for the further work to be carried out under Baltic Agenda 21 were endorsed by the Baltic Sea Council in June 1998.

– which countries

The sector-integrated environmental assistance is provided in Estonia, Latvia, Lithuania, Poland and in the Russian regions of St. Petersburg and Kaliningrad.

In addition to implementing Baltic Agenda 21, the assistance is aimed at supporting the process towards EU membership in the four applicant countries, Estonia, Latvia, Lithuania and Poland. Importance is also attached to the fact that the assistance is intended to supplement other donor assistance.

– appropriation in 1998

The sector-integrated environmental assistance was initiated in 1998, replacing the former environment-related sectoral assistance. The Danish Folketing appropriated DKK 141 m via the Appropriation Act for 1998, distributed on seven ministries/agencies for a three-year period. The break-down into countries and participating ministries and agencies in 1998 is shown in table 6.1.

Table 6.1 Break-down into countries and participating ministries and agencies in 1998

Ministry/ Agency	Appro- priation DKK million	Estonia	Latvia	Lithua- nia	St. Petersburg	Poland	Regional projects
Ministry/ Agency	Appro- priation DKK million	Approval	Approval	Approval	Approval	Approval	Approval
Ministry of Labour	9	3.5	1	2.5		2
Ministry of Housing	8			8
Danish Emergency Management Agency - Nuclear Alert	14	1.8	2	1.8	7.2	1.2
Danish Energy Agency	62	6.5	12	20.5	8	6	9²
Danish Agency for Development of Industry and Trade	10	2	4	2		2
Ministry of Food, Agriculture and Fisheries	25	1.2	0³	7.2	0	5.1	6.8⁴
Ministry of Transport	13						13⁵
Total	141	15	19	42	15.2	16.3	28.8

St. Petersburg, Estonia, Latvia, Lithuania and Poland
Pipeline DKK 2.1 m in Latvia
Estonia, Latvia, Lithuania
St. Petersburg, Estonia

– activities of ministries distributed on sectoral action plans

The Danish Agency for Development of Industry and Trade and the Ministry of Labour contributed to implementation of the action plan for industry through programmes on environmental management and work environment.

The Energy Agency, the Ministry of Housing and the Danish Emergency Management Agency contributed to implementation of the action plan for energy, including atomic power security. In the programmes, the focus was on conversion to less polluting and more sustainable energy sources, energy savings in housing and establishment of a warning system in case of atomic power plant accidents.

The Ministry for Food, Agriculture and Fisheries contributed to implementation of the action plan for the agricultural sector. The programme comprised projects on nitrate pollution, organic agriculture, approval of pesticides and establishment of incinerating plants.

The Ministry of Transport contributed to implementation of the transport action plan with a regional project on multimodal transport and handling of customs documents in St. Petersburg and Estonia.

– programme development

Programme proposals for sector-integrated environmental assistance are developed in co-operation between sectoral ministries in Denmark and the recipient countries.

The environmental content of the programmes has to be approved by the environment ministries in the recipient countries in consultation with the Advisory Committee for Environmental Assistance to Eastern Europe.

The Danish embassies in the recipient countries advise the sectoral ministries on local conditions. DEPA co-ordinates the assistance and is responsible for contact with the environment ministries in the recipient countries.

– other activities in 1998

In January 1998, sectoral ministries from Denmark and the recipient countries presented their proposals for sector-integrated environmental assistance in 1998 at seminars in the environment ministries of the recipient countries (with the exception of the Russian regions).

Proposals for sector-integrated environmental assistance in 1999 were presented at similar seminars in November 1998. In addition to discussing the programmes, the participants also discussed the possibilities of the recipient countries organising their efforts to integrate environmental considerations in the various sectors.

7. Environmental projects in Eastern Europe in 1998

Size of the appropriation

The 1998 appropriation amounted to DKK 385.7 m. Reserved funds of DKK 62.9 m were transferred from 1997 for six tender projects. The preliminary work on these projects took place in 1997, and final contracts for them were not signed until 1998. For this reason, a sum of DKK 448.6 m was available in 1998. Furthermore, total funds of DKK 29.3 m returned to the pool on completion of earlier projects where the spending had been less than expected or from projects closed before start or final completion.

A sum of DKK 477.9 m was drawn during 1998. The projects will be described in the following. In 1998, a total of 166 projects were subsidised.

Table 1 shows the distribution of DESF grants among the recipient countries in 1998 in DKK million, with a breakdown into grants for technical assistance and grants for investment activities.

Like in 1997, Poland was the main recipient in 1998 with a grant of DKK 75 m, only slightly different from the grant in 1997. The grant to Russia has fallen from DKK 74.8 m to DKK 44.7 m, which is partly because of uncertainty on the part of Russia in the wake of the economic crisis. Co-operation with Belarus came to a halt in 1998 as a result of the general climate of co-operation with the country. Denmark as well as international donors have thus decided to discontinue the assistance until Belarus changes its attitude. Estonia, Latvia, Romania and Ukraine have all been allocated considerably larger amounts than in 1997.

The category “Other” covers contributions to NEFCO, both the basic capital of DKK 12.1 m in 1998 and funds for the Soft Loan Facility of DKK 12.45 m for the years 1997 and 1998 and for the Tjernobyl Fund under EBRD of DKK 6.7 m. In addition, the category covers projects with WHO, contributions to OECD’s and EBRD’s activities, implementation of evaluations, several regional projects that are not country-specific, including projects for environmental movements, one project in each of the countries: Moldova, Croatia, Montenegro and small amounts for travelling by Eastern Europeans, etc. The total amount was DKK 68.4 m against DKK 61.8 m in 1997.

Table 7.1 Distribution of DESF grants in 1998 in DKK million, with a breakdown into recipient countries, grants for technical assistance and grants for investment activities.

	TA		IN		Total
	sum	no.	sum	no.	sum	no.
Bulgaria	9.4	3	12.7	3	22.1	6
Estonia	25.4	11	22.9	4	48.3	15
Belarus	0.2	1	1.1	1	1.3	2
Latvia	28.6	16	30.3	6	58.9	22
Lithuania	4.2	10	29.2	7	33.4	17
Poland	21.7	14	53.3	13	75.0	27
Romania	1.2	2	40.2	8	41.4	10
Russia	36.2	14	8.5	3	44.7	17
Slovakia	5.4	3	10.6	2	16.0	5
Czech Republic	4.8	3	14.3	3	19.1	6
Ukraine	14.3	8	35.0	5	49.3	13
Other	33.3	23	35.1	3	68.4	26
Total	184.7	108	293.2	58	477.9	166

Table 7.2 on the next page shows DESF grants in 1998 in DKK million with a breakdown into recipient countries and activity areas. Grants are distributed with 45% for the water area, including waste water, sewerage, drinking water, monitoring, etc. The air area was subsidised with 19%, and this assistance was granted towards activities in the energy sector or the industrial sector.

The nature area was subsidised with about 10%. Activities in this area, which are planned by the National Forest and Nature Agency, are concentrated on the Baltic Sea region and comprise support for EU approximation, compliance with international conventions, capacity-building concerning management of natural areas, awareness raising and environmental teaching, involvement of the population in the administration of nature protection, ecotourism and sustainable forestry, which is implemented partly as a sector-integrated environmental activity under Baltic Agenda 21. In addition, there is support for Eastern European participation in international negotiations of nature protection and biodiversity.

The institutional area consists of EU approximation, training and education and a number of activities that are not carried out in the other areas, such as assistance via OECD, EBRD, WHO, etc.

In 1998, DKK 235 m was granted under the tender model, whereas DKK 200 m was granted via the application model. A further DKK 43 m was granted outside the two models, among other things for NEFCO, EBRD and the World Bank through a legal instrument or via the Appropriation Act. If you disregard the DKK 43 m, 54% of the funds were granted for tender projects. Measured in number of projects, the tender projects account for barely 60% of total projects.

Table 7.2 Distribution of DESF grants in 1998 in DKK million, with a breakdown into recipient countries and activity areas.

Activity area	Air	Water	Waste	Nature	Institu- tions	Other	Total
Bulgaria	5.7		7.4		9.0		22.1
Estonia		26.2		21.8	0.3		48.3
Belarus		0.2	1.1				1.3
Latvia	1.5	35.3	2.0	8.8	11.3		58.9
Lithuania	3.0	26.0	0.2	1.0	2.5	0.7	33.4
Poland	11.5	53.2	3.3	4.8	2.2		75.0
Romania	14.7	10.9	12.3		3.5		41.4
Russia	9.6	19.8	4.1	6.9	4.3		44.7
Slovakia	10.6	4.9			0.5		16.0
Czech Republic	14.7	4.4					19.1
Ukraine	18.5	21.0		1.2	1.9	6.7	49.3
Other	0.3	14.7		3.6	22.3	27.5	68.4
Total	90.1	216.6	30.4	48.1	57.8	34.9	477.9

The projects implemented in the individual countries of co-operation will be described in the following.

Environmental projects in Bulgaria

In 1998, co-operation with Bulgaria was characterised by greater openness than in earlier years, and co-ordination was initiated between the different donor countries with a view to ensuring optimum use of the limited resources.

In 1998, part of the co-operation with Bulgaria was the initiation of a major project to ensure that major parts of Bulgarian IPPC legislation is brought up to an EU level.

As part of the co-operation, an implementation project was initiated with a view to establishing a modern landfill for the towns of Vratza and Mexdra.

Assistance with a view to reducing air pollution was also initiated, partly by mounting an electrostatic precipitator in the Kremikovtzi steelworks partly by mounting of residual carbon measuring device in several power plants in Bulgaria. The latter project is a continuation of a demonstration project at the power station in Varna, where the experience and equipment can now be used at several power plants around the country.

Name of project

Approximation of Environmental Legislation in Bulgaria to EU Industrial Pollution Control Requirements

File no.

124/008-0006, cf. 129-0050 (tender consultant, mentioned in the Annual Report for ‘97)

Project recipient

Ministry of Environment and Waters, 67, W. Gladstone St., 1000 Sofia

Project manager

Carl Bro International as

Project description

The project assists the Bulgarian Ministry of Environment in the implementation of EU’s IPPC-Directive and in the transition to an integrated environmental approval system, e.g. through demonstration projects in the tanning industry and the power station sector respectively.

Environmental effect

The project contributes to the revision by the Bulgarian Ministry of Environment of existing national legislation in accordance with EU legislation in the industrial sector.

Grant

DKK 7,573,109

Total costs

DKK 7,573,109

Name of project

Rehabilitation of Varna Waste Water Treatment Plant in Bulgaria

File no.

124/008-0008

Project recipient

Varna Municipality

Project manager

Samfundsteknik/Carl Bro as

Project description

Improvement of sludge processing through introduction of a new mechanical dewatering system at Varna Waste Water Treatment Plant.

Environmental effect

Calculated reductions per year: 624 tonnes of COD, 230 tonnes of BOD₅.

Grant

DKK 6,300,000

Total costs

DKK 7,700,000

Name of project

Processing of Non-Ferrous Metals J.S.C., Sofia, Bulgaria. Improvement of Environmental Conditions

File no.

124/008-0019

Project recipient

Industrial enterprise in Bulgaria

Project manager

Dan-Cem

Project description

Feasibility study at a non-ferrous metal processing plant in Sofia. The main purpose of the study is to assess the possibility of reducing air pollution from the plant, e.g. by improving the technological lines and energy supply and by mounting filters. In this connection, it should be assessed, how the monitoring conditions can be improved.

Environmental effect

Preliminary work for reduction of air pollution at the plant.

Grant

DKK 612,660

Total costs

DKK 612,660

Name of project

Danish Assistance and Follow-Up to the Gara Iskar Industrial Air Pollution Reduction Project

File no.

124/008-0020

Project recipient

Bulgarian Ministry of Environment

Project manager

COWI

Project description

Assistance to the Bulgarian Ministry of Environment in developing a local strategy for air pollution abatement in the strongly polluted industrial zone “Gara Iskar” on the outskirts of Sofia. Furthermore, preparation of two project documents on the two most polluted enterprises in the region.

Environmental effect

Preliminary work

Grant

DKK 408,120

Total costs

DKK 408,120

Name of project

Establishment of a Modern Landfill in Vratza-Mezdra

File no.

124/008-0021

Project recipient

Vratza and Mezdra Municipalities

Project manager

COWI

Project description

Establishment of a modern landfill, especially for domestic waste in compliance with EU requirements. The landfill will be used by mainly the two towns Vratza and Mezdra. Precautionary measures will be taken in connection with the present uncontrolled depositing place.

Environmental effect

The first cell will be 15,000 m³.

Grant

DKK 7,386,767

Total costs

DKK 12,502,237

Name of project

Mounting of Residual Carbon Measuring Device at the Most Important Coal Power Station in Bulgaria

File no.

124/008-0022

Project recipient

Power stations in Bulgaria

Project manager

Mark & Wedell

Project description

Mounting of residual carbon measuring device at four Bulgarian coal-fired power stations. The residual carbon measuring device helps ensure a better incineration at the coal-fired power stations and thus less leakage of gases.

Environmental effect

Reduction in leakage per year: 1,265 tonnes of SO₂ and a reduction in coal consumption a year: 154,000 tonnes

Grant

DKK 1,100,000

Total costs

DKK 4,400,000

Name of project

Installation of Precipitator for Removal of Dust at the Sinter Line

File no.

124/008-0023

Project recipient

Kremikovtzi Steelworks

Project manager

FLS miljų a/s

Project description

Installation of electrostatic dust precipitator at Bulgaria’s only steelworks. The precipitator will be installed at the Sinter Line, where dust pollution is considerable.

Environmental effect

Calculated reduction per year: 1,212 tonnes of dust

Grant

DKK 4,214,394

Total costs

DKK 14,047,980

Name of project

Appointment of Local Project Co-ordinator in Bulgaria

File no.

124/008-0024

Project recipient

Bulgaria

Project manager

Danish Environmental Protection Agency

Project description

Appointment of local project employee for a three-year period. The main tasks will be to promote and strengthen the co-operation with the Bulgarian Ministry of Environment and the Black Sea Programme.

Environmental effect

Contribute to quick and effective implementation and monitoring of environmental projects.

Grant

DKK 1,402,912

Total costs

DKK 1,402,912

Environmental Projects in the Czech Republic

In 1998, the co-operation with the Czech Republic was characterised by initiation of projects within the areas of cleaner technology, reduction of air emissions and a project generated in connection with the comprehensive flooding that took place in 1997 and in 1998 in the North-Eastern part of the Czech Republic.

All of the projects are within the principal activity areas which DEPA has agreed with the Czech Ministry of Environment are to be at the centre of the co-operation.

Furthermore, the co-operation has been influenced by the lack of personnel in the Czech Ministry of Environment, which has had the effect that, from time to time, the co-operation has been slow and extremely difficult.

The projects within the area of cleaner technology centre on the transfer of know-how and equipment for the production of environmentally friendly paint and initiation of a pre-appraisal study within the textile industry.

Within the reduction of air emission, a project was initiated with three biomass-fired CHP plants established in co-operation with the Austrian Ministry of Environment and the Czech Environmental Fund. Another project within the area was a further development of heating and electricity production in Decin. Besides establishing a natural gas-fired power station, it is the intention to exploit geothermal energy from an existing well in the area. DEPA has supported a number of projects in Decin earlier on, including the establishment of the first natural gas-fired power station in the Czech Republic.

The third project within the area was an extension of an ongoing project concerning elaboration of an environmental and energy plan for the Hradec Kralove and the Pardubice regions in central Turkey.

Finally, a project in the area of river regulation was initiated. The project is implemented in close partnership with a similar project in Poland. Besides being able to warn about inpending flooding, the project is also supposed to give the Czechs the possibility of regulating the river, e.g. in the form of reclaiming wetlands so that the flooding will take place in selected areas where damage will be minimal.

Six projects have been initiated with total grants of DKK 19.1 m. The projects are mainly investment projects.

Name of project

Flood Management in the Czech Republic

File no.

124/043-0034

Project recipient

Czech Hydrometereological Institute
Water Research Institute
Department of Water Management, Ministry of the Environment
Morava Water Board
Vtava Water Board
Ohre Water Board
Labe Water Board
Odra Water Board
Hydroinform

Project manager

Dansk Hydraulisk Institut (DHI)

Project description

Implementation of an edp-model for warning about river floods. The project was triggered by the vast flooding that took place in July 1997 and in 1998 in the Czech Republic and in Poland, Germany and a small part of Slovakia. Within a few days, a rainfall totalling more than 500 mm (equivalent to the annual precipitation in Denmark), caused the Elbe, Odra and Morava rivers to overflow.

Large areas of the Czech Republic and Poland were flooded. The Czechs have calculated that close to 60% of the country was influenced by the strongly rising water masses. Bridges, buildings and crops were destroyed, and unfortunately, more than 50 people lost their lives. The Czechs have assessed the total costs of reconstruction at DKK 10-20 Bn.

The Czech Republic therefore wishes assistance towards establishing a warning system and having a model implemented that allows the construction of strategically placed dikes, reclaiming of wetlands that can stand being flooded.

In this connection, the use of model tools developed by DHI in co-operation with DMI would be relevant. DHI has been very successful in using a similar system in e.g. Bangladesh. The project is being implemented together with a similar project in Poland.

Environmental effect

Cannot be calculated. A warning system is installed and measures will be taken to limit the effects of flooding considerably in future.

Grant

DKK 4,337,694

Total costs

DKK 6,500,000

Name of project

Energy & Environment, Planning & Development in the Hradec Kralove and Pardubice Regions

File no.

124/043-0035t

Project recipient

Hradec Kralove and Pardubice regions

Project manager

PlanEnergi

Project description

In connection with the continuation of the project “Planning and development in Hradec Kralove” (124/043-0027), an agreement was made between Planenergi and DEPA to change the project in such a way that the last phase of the above project was to be integrated into the subsequent project.

Environmental effect

Not relevant in this project, which is a supplementary grant. Cf. last year’s annual report.

Grant

DKK 173,972

Total costs

DKK 173,972

Name of project

Establishment of 3 Biomass-fired Heating Plants in the Towns of Rostin, Stare Mestro in the Czech Republic

File no.

124/043-0040a

Project recipient

Rostin
Stare Mestro
Desna

Project manager

Danske Fjernvarmevęrkers Forening (DFF)

Project description

Establishment of 3 biomass-fired CHP plants in the above-mentioned towns.

The project is implemented in co-operation with the Austrian Ministry of Environment and the Czech Environment Fund.

Austria had elaborated TOR for implementation of the projects. DEPA assessed that it was necessary to send a specialist to go through and assess the projects, and it is his assessment that now forms the background to DEPA’s involvement in the project.

Environmental effect

After completion of the total project, 275 tonnes per year of dust, 225 tonnes per year of SO₂, 150 tonnes per year of CO and 12,500 tonnes per year of CO₂.

Grant

DKK 300,000. The Austrian Ministry of Environment: USD 1.45 m and the Czech Environment Fund: USD 2.79 m.

Total costs

USD 7.9 m

Name of project

Geothermal Energy in CHP Production in Decin, Czech Republic

File no.

124/043-0041

Project recipient

Town of Decin

Project manager

Bruun & Sųrensen

Project description

Establishment of a geothermal CHP plant on the Eastern bank of the Elbe in Decin. The plant will cover about 40% of the town’s total heating demand. Geothermal heating from a 30° reservoir is used. The rest of the heating comes from a natural gas-fired plant. The reservoir is situated at a depth of 500 m. By means of a heating pump, this temperature is raised to district heating level. The cooled water is of such a quality that it can be used as drinking water in the town, which is badly needed.

The project is the last part of a complete conversion of coal-fired plants to more modern natural gas-fired power stations. Earlier on, the DESF Facility has supported the establishment of plants in the districts of Bynov and Zelenice in Decin. The plant in Bynov was the first natural gas-fired power station in the Czech Republic and was inaugurated by the former Minister of Environment, Skalicky.

Environmental effect

354 tonnes of SO₂ per year, 52 tonnes of NO_x per year, 25,000 tonnes of CO₂ per year, 545 tonnes of particles per year and 5,000 tonnes of fly ash per year.

Grant

DKK 9,000,000

Total sum

DKK 85,000,000

Name of project

Extension of Acceptable Water-borne Paint Production and Decrease of Organic Solvent Emissions

File no.

124/043-0046

Project recipient

The Teluria paint and lacquer factory and local environmental authorities

Project manager

Enpro Aps

Project description

The purpose of the project is to enable the paint and lacquer factory at Teluria to produce water-borne paints for the wood and construction industry through part-financing of the proper equipment from Denmark. Furthermore, an environmental/technical review will be made of the factory, focusing also on aspects of the working environment, and the firm will be advised on the use of more environmentally friendly raw materials with a view to developing a wood preservation paint and paint for steel constructions.

Environmental effect

Reduction of VOC emissions estimated at up to 1,000 tonnes per year.

Grant

DKK 2,320,500

Total costs

DKK 5,365,784

Name of project

Cleaner Technology – Mission to the Czech Republic

File no.

124/043-0047

Project recipient

The Czech Ministry of Environment

Project manager

Institut for Produktudvikling

Project description

Preparing a project document for a major cleaner technology project comprising three industries – a project for which tenders will be invited in 1999. Furthermore, the legislation, administration and technical capacity in this area will be described with a view to clarifying the possibilities of implementing cleaner technology solutions in connection with different industries in the Czech Republic.

Environmental effect

Cannot be calculated.

Grant

DKK 224,976

Total costs

DKK 224,976

Environmental projects in Estonia

In 1998, co-operation with Estonia was dominated by large water supply, waste water and nature protection projects. Tenders were thus invited for a water supply project in Tapa and for a sewage treatment plant in Keila. DEPA also supported a water supply project in Valga. These three projects amounted to about DKK 20 m, equivalent to almost half of the total Danish assistance to Estonia in 1998.

Furthermore, the work of preparing feasibility studies for water and waste water in 16 small towns in Estonia was initiated, the “SMEP-II programme”. DEPA is preparing six out of these feasibility studies, reporting and is responsible to the Estonian Ministry of Environment for the overall task of co-ordinating and consulting with a view to implementing the programme. The projects are expected to lead to substantial co-financing from PHARE-LSIF, NEFCO and the other Nordic donors.

SMEP-II is expected to lead to similar projects in the other Baltic countries, ie project preparation which may trigger substantial co-financing from EU funds. The programme has also meant that the Estonian Ministry of Environment has requested similar projects within the waste area, which DEPA will prepare in 1999.

In the nature protection area, the first projects were initiated supporting Estonia’s implementation of EU’s birds and habitats directives and Estonia’s compliance with a number of international nature protection and biodiversity conventions. The projects comprise the drawing up of inventories of species and habitats with an assessment of the need for protection and selection of protected forest areas. In addition, there is the preparation of a management plan for Soomaa National Park, established in 1993, one of Europe’s largest unregulated river-flooded areas and thus also comprised by the Ramsar convention list of internationally important wetlands. Estonia contributes substantial co-financing for this project, which also comprises establishment of a visitors’ centre, facilities for the public, information about nature and involvement of the local population in the administration of the park. In 1998, assistance for nature projects in Estonia amounted to well over DKK 20 m.

In 1998, the first traffic-environment project was initiated in Estonia in the form of an NGO-seminar on the Danish experience of bicycle planning and involvement of citizens and green organisations.

In 1998, the Estonian Ministry of Environment completed and published their National Environmental Action Plan (NEAP). At the same time, the first law reviews and negotiations with the EU were started up. Both activities are expected to affect Estonian priorities and thus the purposes for which the Danish assistance will be provided in the years to come.

Name of project

Keila Waste Water Treatment Plant, Estonia

File no.

124/009-0017

Project recipient

Keila Municipality

Project manager

COWI

Project description

The project is part of the “Keila Water Supply and Waste Water Project”. DEPA’s contribution to the project covers design of a new waste water treatment plant (including a new operator’s building), a call for tenders and purchase of mechanical and electrical equipment for the plant, supervision of all building and construction work and training of operating personnel. As winner of the tender, COWI has put up a process guarantee for the water treatment plant. Completion of the plant is expected by the end of 1999.

Environmental effect

The new waste water treatment plant will receive waste water equivalent to about 13,000 person equivalents (PE).

The waste water is treated in such a way that on discharge from the treatment plant, it observes Estonian legislation in the area and thus also EU requirements regarding discharge of waste water in towns.

Grant

DKK 2,608,176

Total costs

DKK about 12,900,000

Name of project

Keila Sewage Treatment Plant (supplementary grant)

File no.

129-0064

Project recipient

Keila Municipality

Project manager

Water & Power Planners A/S

Project description

Supplementary grant for WPP and sub-suppliers in connection with the call for tenders for the project “Keila Waste Water Treatment Plant, Estonia”. (File no. 124/009-0017)

The tender made slow progress and was complicated by the fact that the project had been formulated as a “design & build” project, though a process guarantee was also required.

Environmental effect

TA only.

Grant

DKK 98,479

Total costs

DKK 98,479

Name of project

Municipality Atlas for Kuressaare

File no.

124/009-0030

Project recipient

Kuressaare Municipality, Estonia

Project manager

Rųnne Municipality

Project description

Elaboration of a municipal atlas for Kuressaare in accordance with the SAVE-method developed in Denmark, with a view to strengthening the efforts of the municipal town planning and building administration to preserve and maintain precious urban environments and buildings. At the same time, it is the intention to make the method known by co-operating with national authorities and other municipalities.

Environmental effect

Improved preservation and maintenance of buildings and urban environments worth preserving, in Kuressaare and in Estonia as a whole.

Grant

DKK 882,400

Total costs

DKK 1,227,800

Name of project

Valga Water Supply Project, Estonia

File no.

124/009-0035

Project recipient

Valga Municipality and Valga Water Company

Project manager

Rambųll

Project description

For Valga municipality and Valga water company, equipment is projected and purchased for water catchment in the area, including pumps, monitoring equipment and water treatment equipment for the water works. Training of the employees of Valga Water Company is also included in the project. The Estonians are responsible for all building and construction work and for the establishment of the water supply main from the water works to the distribution system.

Environmental effect

16,000 inhabitants in Valga are supplied with clean water from the improved water supply.

Grant

DKK 8,611,000

Total costs

DKK 19,011,000

Name of project

NGO-seminars on Planning and Co-operation

File no.

124/009-0038

Project recipient

The Estonian Ministry of Environment, the Estonian Ministry of Transport, Tallinn and Tartu municipalities and Vänta Aga Cycling Club.

Project manager

Dansk Cyklist Forbund

Project description

Planning and implementation of a 3-day seminar on longterm planning and co-operation between the citizens and the authorities. Two days in Tallinn, one day in Tartu. By using the Danish example of decentralised traffic and environmental action plans, the focus will be on the correlation between environmental problems and traffic planning, including the involvement of citizens and interest organisations.

Representatives from a number of Danish authorities (municipalities, counties, the Ministry of Transport and the Ministry of Environment and Energy) and interest organisations are invited as lecturers.

Environmental effect

Cannot be calculated in quantitative terms. If the seminar, in the longer term, leads to the introduction of bicycle paths in traffic planning in Estonia, the positive environmental effects will be substantial.

Grant

DKK 282,000

Total costs

DKK 392,000

Name of project

Short-Term Assistance with regard to Approximation of Environmental Legislation to EU Waste Regulation in Estonia

File no.

124/009-0040

Project recipient

Ministry of Environment, Estonia

Project description

Assistance to the Estonian Ministry of Environment in connection with transposition of EU waste legislation, primarily the Packaging Directive, the Waste Framework Directive, the Hazardous Waste Directive and the Transport Regulation. The project has consisted in 2-3 day meetings in DEPA between Danish and Estonian civil servants responsible for the implementation of the relevant legislation with a view to passing on Danish experience of implementing EU legislation in these areas.

Environmental effect

No direct effect, but the project indirectly contributes to an earlier transposition and implementation of the mentioned directives in Estonia.

Grant

DKK 35,736

Total costs

DKK 35,736

Name of project

Protection of the Biodiversity of Sooma National Park

File no.

124/009-0041

Project recipient

Sooma National Park (Ministry of Environment), Estonia

Project manager

Carl Bro as International

Project description

The purpose is to strengthen the protection of nature in the 37,000 ha Sooma National Park. The area contains a large undisturbed biological diversity with large raised bogs, unregulated rivers and natural forests with populations of brown bears, wolves, lynxes, otters, flying squirrels, golden eagles, woodpeckers, etc. The project comprises the development of a management plan, strengthening of the management, establishment of a visitors’ centre, adjustment of rules, involvement of the local population and development of ecotourism.

Environmental effect

Increased nature conservation of 37,000 ha valuable natural forest and increased regional, national and international awareness of the importance of the area.

Grant

DKK 7,000,000

Total costs

DKK 8,296,610

Name of project

National Inventories of Internationally Important Species and Habitats in Relation to International Conventions and Directives

File no.

124/009-0042

Project recipient

ELF (the Estonia Society for the Preservation of Natural Amenities) and the Ministry of Environment, Estonia

Project manager

Rambųll

Project description

The main purpose is to grant assistance to Estonia’s implementation of international legislation on nature conservation, including relevant EU directives (protection of birds, habitats) and the Bonn, Bern, Ramsar and Biodiversity conventions. The project includes assistance with mapping and selecting relevant habitats and species, establishment of a databank and assistance with legal implementation and preparation of general information material on relevant international obligations.

Environmental effect

The project will enable Estonia to fulfill its obligations of protecting a number of species and habitats comprised by EU directives and various conventions.

Grant

DKK 4,000,000

Total costs

DKK 4,000,000

Name of project

Development of the Estonian Forest Conservation Area Network

File no.

124/009-0045

Project recipient

The Ministry of Environment and the National Forestry Board, Estonia

Project manager

Carl Bro as International

Project description

About 50% of Estonia is covered by forest. A national forest development programme intended to increase the efficient utilisation of the forest and double the felling has been initiated. This part project is intended to ensure the conservation of natural amenities, partly by selecting and planning networks of protected forests, partly by development of human and institutional resources in forest administration. Through the selection of protected areas, the project will contribute substantially to Estonia’s implementation of EU directives on birds and habitats.

Environmental effect

Establishment of a network of strictly protected forests and partly protected forest areas, totalling 380,000 ha. Capacity development of the new state forestry organisation.

Grant

DKK 9,500,000

Total costs

DKK 9,700,000

Name of project

Estonian Small Municipalities Water and Waste Water EU- Accession Programme – Programme Development

File no.

124/009-0047

Project recipient

The Estonian Ministry of Environment

Project manager

Rambųll

Project description

In continuation of a pre-feasibility study, the Estonians have prioritised 16 small towns for which feasibility studies will be prepared with a view to obtaining financing of the implementation from e.g. Large Scale Infrastructure Facility (PHARE-LSIF), NEFCO, EIB and other donors. Feasibility studies for six towns are supported by DEPA, five by SIDA and five by Mo-E-Finland. The project grants assistance to the Estonian Ministry of Environment and to the steering committee in the overall co-ordination of the three part projects. Furthermore, proposals for financing plans and identification/TORs for the implementation unit will be prepared for the entire project.

Environmental effect

To be calculated in connection with the subsequent implementation project.

Grant

DKK 1,406,500

Total costs

DKK 1,406,500

Name of project

Estonian Small Municipalities Waster and Waste Water EU- Accession Programme – Preparation of Feasibility Studies for Six (6) Estonian Municipalities

File no.

124/009-0048

Project recipient

The Estonian Ministry of Environment

Project manager

Rambųll

Project description

In continuation of a pre-feasibility study, the Estonians have prioritised 16 small towns, for which feasibility studies will be prepared with a view to obtaining financing of the implementation from e.g. PHARE-LSIF, NEFCO, and EIB. Through this programme, feasibility studies for six towns are financed by DEPA, five by SIDA and the last five by MoE-Finland. The feasibility studies will be prepared on the basis of joint TORs prepared by NEFCO.

Environmental effect

To be calculated in connection with the subsequent implementation project.

Grant

DKK 1,497,600

Total costs

DKK 1,497,600

Name of project

Emergency Water Supply for Tapa, Estonia

File no.

124/009-0055

Project recipient

Tapa Municipality and Water Company

Project manager

Krüger International Consult

Project description

Identification and replacement of an existing spring for the water supply of the town of Tapa, which is threatened by oil pollution. Dimensioning and establishment of a new main from the new spring to the existing distribution system. Furthermore, strengthening and extension of the existing supply network and discharge system (primarily Estonian input).

The project is part of the overall Pandivere Water Resource Project, where PHARE is a prime mover.

Environmental Effect

Ensures clean drinking water for Tapa’s approx. 8,000 inhabitants, of whom about 65% are currently linked to the public water supply network.

Grant

DKK 10,248,676

Total costs

DKK 12,279,676

Name of project

Support for the Water Supply System in Arükula, Estonia

File no.

129-0076

Project recipient

Arükula municipality

Project manager

Rambųll

Project description

Preparation of call for tenders to ensure the citizens of Arükula have clean drinking water, as a pipeline will be established from the spring to the existing distribution system.

Environmental effect

None.

Grant

DKK 1,465,105

Total costs

DKK 2,215,105

Name of project

Tender. Emergency Water Supply Project for Tapa Municipality

File no.

129-0088

Project recipient

Tapa Municipality

Project manager

Water & Power Planners

Project description

Preparation of a call for tenders for “Emergency Water Supply Project for Tapa, Estonia” (File no. 124/009-00055), including preparation of tender documents, advertising, evaluation reports, participation in site visits, etc.

Environmental effect

None.

Grant

DKK 231,041

Total costs

DKK 231,041

Name of project

Appraisal and Evaluation of Tenders in connection with the project “Development of the Estonian Forest Area Network”

File no.

129-0100

Project recipient

The Estonian Ministry of Environment

Project manager

HAP Consultants

Project description

Field appraisal of the project document “Development of the Estonian Forest Conservation Area Network” and appraisal of tenders submitted for the project. The project comprises two elements seeking to protect valuable natural areas in Estonia: a new selection and planning of the network of virgin forest and protection of forest, and development of the human and institutional resources to administer the network.

Environmental effect

None.

Grant

DKK 417,196

Total costs

DKK 417,196

Environmental projects in Belarus

Because of the tense political situation in Belarus, DEPA’s activities in Belarus have been minimal in 1998. The EU Council conclusions from September 1997 impose upon the Member States a freezing of their technical assistance to Belarus, except in the case of humanitarian, democracy-promoting or regional projects. In the summer of 1998, relations with Belarus were further deteriorated in connection with the country’s violation of the Vienna Convention on diplomatic relations.

Denmark follows the Council conclusions and supports the pursuance of a more stringent policy via-a-vis Belarus. In the environmental assistance area, this means that projects already initiated can continue, but a new project will generally not be able to obtain support unless it is a new NGO project. This policy will be pursued until Belarus begins to send new and different political signals.

In 1998, assistance totalling DKK 1.3 m has been approved, of which DKK 1.1 m was for public information and hearings in connection with an earlier initiated pesticide disposal project. The remaining DKK 0.2 m has been spent on a project identification mission to the Braslav Lake area on the border to Latvia. DEPA has chosen not to continue with this project at the present time, however.

Name of project

Public Consultations Concerning Disposal of Accumulated, Obsolete Pesticides in Belarus

File no.

124/015-0005t

Project recipient

Ministry of Natural Resources and Environmental Protection of Belarus

Project manager

Danish Technological Institute in co-operation with COWI and DANCEM

Project description

The project is a supplement to the project on disposal of obsolete pesticides in Belarus initiated in 1997. The project ensures that the population is involved and that emissions from incineration, if any, in a cement kiln are measured. The purpose of this hearing phase of the project is to involve the Belarussians in the decision on test incineration and possibly later incineration on a larger scale of obsolete pesticides in cement kilns. A dialogue will be established with the parties affected in the local area concerning the chosen cement kiln and with other stakeholders in Belarus.

Environmental effect

No direct effect, but the supplement to the project is a prerequisite for the decision to finally eliminate the approx. 4,000 tonnes of obsolete pesticides in Belarus.

Grant

DKK 1,116,580

Total costs

DKK 1,116,580

Name of project

Project Identification Mission Concerning “Braslav Lakes”

File no.

124/015-0022

Project recipient

Local/regional environmental authorities and the local fresh-water laboratory under Belarussian State University

Project manager

Rambųll and DHI (VKI)

Project description

The purpose of the mission was to assess a project proposal from the Belarussian environmental authorities for improvement of the environment in Braslav Lakes on the border to Latvia in the run-off area of the West Dvina river. The project team recommends DEPA to proceed with the two projects: Upgrading of the water treatment plant in Braslav and monitoring of the recipient, including teaching/information on the project.

Environmental effect

Preliminary work for a major project.

Grant

DKK 243,590

Total costs

DKK 243,590

Environmental projects in Latvia

In 1998, more than half of the Danish support for Latvia was aimed at investment projects in the water sector, mainly projects on rehabilitation and building of waste water plants and, to a lesser extent, rehabilitation of water supply plants.

Another important activity area was the approximation to EU environmental legislation, which accounted for close to one-fourth of total Danish support in 1998, with projects concerning water legislation, industrial pollution prevention and control (IPPC), preparations for the implementation of the Nitrate Directive and the Habitat Directive.

The “green” activity area, accounting for well over one-tenth of total assistance, covers projects concerning Latvia’s approximation to EU legislation in the area of nature protection (directives on birds and habitats), information about nature and environmental teaching in relation to Latvia’s five biggest rivers. Furthermore, the preparation of new green projects, including, as part of Latvia’s implementation of international environmental conventions, a project to support the Latvian Ministry of Environment in the management of Kemiri National Park, which is the first to be established under the Ministry’s responsibility.

The remainder of the assistance has been provided for smaller projects within cleaner technology (the furniture industry and the Latvian Environmental Investment Fund), the waste area and two projects concerning contaminated soil (cleaning up at the Rumbula Air Base and preparations for cleaning up a waste deposit in Jelgava).

During 1998, Latvia elaborated a number of strategies for EU approximation in the environmental area, and it is expected that the approximation to EU environmental legislation will continue to influence the Latvian prioritisation of environmental action and the use of Danish funds. Danish assistance for investment projects within the water sector are expected to continue to dominate, however, but increased activities are also expected in the waste area, as this is now highly prioritised in Latvia.

Name of project

Rehabilitation of Pump Stations in Kandava and Jelgava

File no.

124/023-0007d

Project recipient

Daugavpils Udenvads (water supply and waste water administration in Daugavpils, Latvia)

Project manager

Krüger A/S

Project description

As part of an internationally financed project to improve the water supply and waste water treatment in Daugavpils, Latvia (pop. 130,000), the purpose of the project is to rehabilitate two pump stations in the town’s sewer network in order to ensure the transport of waste water to the treatment plant. The project is part of a total package financed by Denmark and Sweden and now comprises all work to be carried out on the treatment plant and the sewer system. In addition to this project, the Danish-financed part of the project also comprises the projects mentioned under file no. 124/023-0007d, e and t.

Environmental effect

The sewer and waste water project leads to annual pollution reductions of 1881 tonnes of BI5, 55 tonnes of phosphorus, 148 tonnes of nitrogen and 286 tonnes of suspended substance.

Grant

DKK 6,003,856

Total costs

DDK 108,000,000 (for the whole Daugavpils Udenvads Project)

Name of project

Daugavpils Waste Water Project, Combined High Jetting and Suction Tanker

File no.

124/023-0007e

Project recipient

Daugavpils Udenvads (water supply and waste water administration in Daugavpils, Latvia)

Project manager

J. Hvidtved Larsen A/S

Project description

A suction tanker will be supplied as part of the rehabilitation project for Daugavpils’ water supply and waste water treatment. The use of suction tankers is not very widespread in Latvia (or the rest of Eastern Europe), for which reason there is a strong demand for cleaning sewers, both to ensure the ability to divert waste water and to be able to inspect the sewer network to allow preventive maintenance of the sewer network. The model supplied can sluice the sewer and contains a water filter that filters the sucked up waste water to reduce the costs of transport and increase the effective operating time of the suction tanker.

Environmental effect

The suction tanker can rinse sewers so that they regain their capacity to divert, thus saving expenses for the establishment of new sewers (which is the alternative). Furthermore, direct diversion of waste water to the river Daugava is avoided in cases where the sewers fail to work.

Grant

DKK 2,401,178

Total costs

DKK 108,000,000 (for the whole Daugavpils Udenvads Project)

Name of project

Daugavpils Water and Waste Water Component, Latvia

File no.

124/023-0007t

Project recipient

Daugavpils Udenvads (water supply and waste water administration on Daugavpils, Latvia)

Project manager

COWI

Project description

Under this grant, a number of minor activities and supplies to Daugavpils Water and Waste Water Component are collected, including groundwater lowering at the Jelgave pump station, design support and supervision, and the supply of minor equipment (electricity meters, man holes, guards, etc).

Environmental effect

Cf. file no. 124/023-0007d above.

Grant

DKK 1,047,692

Total costs

DKK 108,000,000 (for the whole Daugavpils Udenvads Project)

Name of project

Assistance to the Latvian Ministry of Environment Protection and Regional Development for Approximation of Legislation and Regulation in the Water Sector

File no.

124/023-0042

Project recipient

Latvian Ministry of Environment Protection and Regional Development

Project manager

Carl Bro as International

Project description

Assistance to the Latvian Ministry of Environment Protection by fixing water quality standards for both surface and drinking water in accordance with EU standards and development of a method for establishing discharge requirements, ensuring observance of EU water quality standards.

Environmental effect

The project contributes to enabling the Latvian Ministry of Environment Protection to regulate and protect rivers and drinking water in accordance with EU rules.

Grant

DKK 2,691,165

Total costs

DKK 2,691,165

Name of project

Development of a Code of Good Agricultural Practice

File no.

124/023-0055

Project recipient

Latvian Ministry of Environment Protection and Regional Development

Project manager

Danish Agricultural Advisory Centre, Skejby

Project description

The project assists the Latvian Ministry of Environment Protection and Regional Development in drawing up a Code of Good Agricultural Practice. One of the purposes of drawing up such a code is to minimise the run-off of nitrate from surface and ground water.

The drawing up of such a code is also an important part of the implementation of the EU Nitrate directive.

Environmental effect

If the code is observed, it will mean less nitrate pollution of surface and ground water. In the very vulnerable areas to be appointed under the Nitrate Directive, the code will be compulsory. Observance of the code will be a prerequisite to reducing the nitrate pollution of water courses and ground water.

Grant

DKK 1,086,050

Total costs

DKK 1,421,831

Name of project

Project to Assist Latvia in Approximation to European Union Law Concerning Industrial Pollution Prevention and Control (IPPC) and Environmental Management of Industry.

File no.

124/023-0057

Project recipient

Latvian Ministry of Environment Protection and Regional Development

Project manager

COWI

Project description

Assistance to the Latvian Ministry of Environment Protection and Regional Development in approximation of Latvian environmental law to the IPPC-directive and in practical implementation of the regulations concerning approval of certain especially polluting industries.

Environmental effect

Through an approval scheme according to which emission conditions are established for a group of especially polluting industries, pollution within these industries will be reduced in accordance with EU rules governing the area.

Grant

DKK 6,108,346

Total costs

DKK 6,108,346

Name of project

Project Preparation for two Water and Waste Water Projects, Latvia

File no.

124/023-0061t

Project recipient

The Technical Administrations of Aizkraukle and Gulbene

Project manager

Water & Power Planners A/S

Project description

In connection with appraisal of the project documents for a project on rehabilitation of the water supply and waste water treatment in Aizkraukle and Gulbene, it turned out that there was a need to obtain further information about existing conditions in the two towns and to rewrite the project document further. The project is thus a supplementary grant for project no. 124/023-0061 (1997).

Environmental effect

Preparation of two major investment projects.

Grant

DKK 288,331

Total costs

DDK 288,331

Name of project

Feasibility Study into the Implementation of the National Municipal Waste Management Strategy in a Pilot Area in Latvia.

File no.

124/023-0063

Project recipient

Latvia, Valmiera (Limbazi, Valmiera, Valka and Cesis districts), Northern Latvia

Project manager

Carl Bro as International

Project description

The project is related both to national environmental policy and to the national “Municipal Solid Waste Management Strategy” (also called “500 minus”).

This project represents the last step before full implementation (investment) of the waste strategy in the pilot area in Northern Latvia (North Vidzeme).

The following elements are clarified in the project:

	technical, operational and maintenance aspects, including necessary infrastructure, vehicles/machinery, containers and spare parts,
	institutional, organisational and managerial aspects, including plans for manning/personnel, education and training,
	financial aspects, including development and updating of cost analysis and repayment plans.

The project selects an environmentally justified and thus improved (preventive) allocation for landfills, which will probably be used in future in other regions of Latvia. Furthermore, methods for cleaning up/closing down existing landfills are described.

The results of the project will be used for further implementation of the waste strategy in the other waste regions of Latvia. Workshops will be held with a view to spreading information about the project.

The project consists in technical assistance only.

Environmental effect

No quantifiable environmental effect.

Grant

DKK 1,500,000

Total costs

DKK 1,600,000

Name of project

Co-operation between Latvia and Denmark on Transfer of Technology and Know-how Concerning Investigation and Remedy of Oil Pollution in Groundwater.

File no.

124/023-0064

Project recipient

Latvia, Riga

Project manager

Hedeselskabet (The Danish Land and Development Service)

Project description

The project comprises cleaning up of an oil-polluted site at Rumbula military airport on the outskirts of Riga. Soil as well as groundwater is polluted.

During phase 1 of the project, training of Latvian specialists was initiated in Latvia and Denmark. Further pollution of the area was stopped, the extent of the pollution was assessed and quantified, and an introductory modelling of groundwater and risk assessment was initiated. Six areas with jet fuel in free phase were identified plus areas with more diffuse fuel pollution. Further examinations are required for preparation of a final strategy for the clean-up and for a final assessment of risk. The purpose of this phase is to obtain further knowledge of the pollution with a view to deciding which precise measures to take to implement a full- scale clean-up. Through this work, the Latvian partners of co-operation will gradually be introduced to the practical cleaning techniques and learn to carry out the cleaning on their own.

Environmental effect

The project will ensure cleaning of the major part of the fuel in free phase and will eliminate a future risk of pollution of the area with dissolved fuel. Furthermore, the cleaning will ensure that the site can be used for building purposes and urban development.

Grant

DKK 3,122,780

Total costs

DKK 3,278,030

Name of project

River Tells me a Story – Children’s Environmental School

File no.

124/023-0065

Project recipient

Children’s Elementary School, Riga

Project manager

Biologiforbundet

Project description

The purpose of the project is to increase environmental awareness and competence to act among Latvian teachers and pupils. This is attained through environmental teaching focusing on local environmental problems in connection with the five largest rivers in Latvia. The project is based on co-operation between the Latvian NGO, Children’s Elementary School in Riga and the Danish NGO, Biologiforbundet.

Environmental effect

150 teachers will be trained and will participate in environmental teaching, and about 500 pupils living near the five largest rivers will participate actively.

Grant

DKK 1,684,811

Total costs

DKK 2,118,296

Name of project

Latvian Study Tour concerning Waste Management Systems in Denmark

File no.

124/023-0074

Project recipient

Latvian Ministry for Environmental Protection and Regional Development and employees in counties and municipalities in Latvia working with waste management.

Project manager

Rendan A/S

Project description

The purpose of the project is through a study tour to introduce 15 employees in state, counties and municipalities of Latvia to all types of solutions concerning waste disposal in Denmark. The visit will be prepared in co-operation with DEPA’s Domestic Waste Office.

Environmental effect

None.

Grant

DKK 320,059

Total costs

DKK 320,059

Name of project

Inventories of Species And Habitats, Development of Management Plans and Capacity Building in relation to Approximation to EU Birds and Habitats Directives

File no.

124/023-0077

Project recipient

Latvian Ministry for Environmental Protection and Regional Development

Project manager

Darudec

Project description

The main purpose is to assist Latvia in implementing supranational nature-conservation legislation, primarily in relation to EU directives (Birds and Habitats Directives). The project comprises capacity development in the field of mapping and selecting relevant habitats and species, establishing databases and preparing management plans and administrative implementation and information services.

Environmental effect

Ensuring Latvia’s implementation of international nature-conservation conventions and approximation to and later implementation of EU’s Birds and Habitats Directives.

Grant

DKK 6,600,000

Total costs

DKK 6,600,000

Name of project

Project Formulation Mission on the Project of Kemiri National Park

File no.

124/023-0078

Project recipient

Latvian Ministry for Environmental Protection and Regional Development

Project manager

Rambųll

Project description

The task of the Project Formulation Mission is to draw up a draft project document to assist the Latvian Ministry for Environmental Protection and Regional Development with the development and practical implementation of the new Kemiri National Park. This park is the second national park in Latvia and the first to be established under the Latvian Ministry for Environmental Protection and Regional Development.

Environmental effect

Drawing up of project document.

Grant

DKK 310,644

Total costs

DKK 310,644

Name of project

Assistance to Hazardous Waste Secondment in Latvia

File no.

124/023-0079

Project recipient

Latvian Ministry for Environment Protection and Regional Development

Project manager

Carl Bro as International

Project description

Preparation of Technical Covenant in connection with a PHARE twinning project in Latvia (Hazardous Waste Management).

Environmental effect

No direct effect, but necessary in order to implement the twinning project which will lead to environmental improvements in the area of hazardous waste.

Grant

DKK 149,696

Total costs

DKK 149,696

Name of project

Consultancy Service, etc. for Waste Water Treatment Plants in Aizkraukle and Gulbene

File no.

124/023-0082

Project recipient

Technical Administrations in Aizkraukle and Gulbene, Latvia

Project manager

Water & Power Planners A/S

Project description

As part of the rehabilitation of water supply and waste water treatment in Aizkraukle and Gulbene, supervision of the building of a treatment plant in each of the two towns will be supervised under this project. Besides, repair work will be done to the sewer networks and pump stations.

Environmental effect

Cf. 124/023-083 below

Grant

DKK 6,088,208

Total costs

Approx. DKK 60,000,000
(total investments in water supply and waste water in the two towns)

Name of project

Process Design, Supply and Erection, etc of Waste Water Treatment Plants in Aizkraukle and Gulbene

File no.

124/025-0083

Project recipient

Technical administrations in the two towns

Project manager

Puritek A/S

Project description

In co-financing with the two towns, the project builds a waste water treatment plant in each of the towns with a capacity of 10,000 PE. The project is part of a total plan for rehabilitation of water supply and waste water disposal in the two towns, where the other components are covered by the EU, NEFCO and the Latvian state. The two treatment plants are based on an active sludge process with a BI5 (<15mg/l), N (<15mg/l) and P (<1.5mg/l) removal. Design, equipment and project management are paid by the project, whereas the construction work is paid by the two towns. The project manager is a turnkey supplier for the whole project.

Environmental effect

The following net improvements will be achieved on treatment of the waste water in the two towns (Aizkraukle has mechanical treatment today, and this is why the net environmental effect is smaller here):

Gulbene:
BI7: 313,535 tonnes per year
COD: 638,750 tonnes per year
Suspended substance: 317,550 tonnes per year
Total N: 57,670 tonnes per year
Total P: 8,935 tonnes per year

Aizkraukle: BI7: 184,754 tonnes per year COD: 493,480 tonnes per year Suspended substance: 161,787 tonnes per year Total N: 47,633 tonnes per year Total P: 6,661 tonnes per year

Grant

DKK 11,582,060

Total costs

Approx. DKK 60,000,000

Environmental projects in Lithuania

In 1998, the bulk of Danish assistance to Lithuania was aimed at the water sector. This heading covers a great variety of projects, however.

Considerable assistance was provided in 1998 for the building of precautionary measures to combat oil pollution in the Baltic Sea out of Lithuania.

Another important item was assistance for a project aimed at the introduction of cleaner technology in the Lithuanian slaughtery sector, a project which will lead to e.g. resource savings and a limitation of water pollution from this sector.

In addition to this, support has been given for more “traditional” water projects within the area of waste water and the supply of drinking water.

In the nature area, the emphasis has been primarily on preparation of new projects, including a project to support Lithuania’s approximation to EU nature conservation law (the Birds and Habitats Directives) and a project on sustainable afforestation.

In 1998, the first traffic-environment project was initiated in Lithuania in the form of a seminar on Danish experience of bicycle planning and involvement of citizens and green organisations.

Furthermore, a project on the drawing up of a Code of Good Agricultural Practice was initiated, and a number of ongoing projects have received funding for follow-up activities.

During 1998, Lithuania has elaborated a number of strategies for EU approximation in the environmental area, and it is to be expected that the approximation to EU environment-related directives and guidelines will increasingly influence Lithuanian priority-setting and thus the use of Danish funds.

Name of project

Support Agreement with the Ignalina Nuclear Power Plant

File no.

124/025-0005t

Project recipient

Ignalina Nuclear Power Plant

Project manager

Rovsing Dynamics A/S

Project description

As follow-up on an earlier supply of equipment, the project is to ensure optimum use of the equipment through upgrading of the equipment supplied, training, establishment of the necessary communication lines at the plant and establishment of telephone support in case of problems related to the use of the equipment.

Environmental effect

Contribution to securing the plant.

Grant

DKK 721,029

Total costs

DKK 721,029

Name of project

Klaipeda Geothermal Demonstration Project

File no.

124/025-0007t

Project recipient

Klaipeda Geothermal Energy Organisation

Project manager

DONG

Project description

This project is an extension of the ongoing project, under which DEPA, in co-operation with the World Bank, PHARE and the Lithuanian government, is establishing a geothermal plant to exploit the geothermal energy in an area where a distanct heating network has already been established. Earlier on, DEPA provided DKK 18 m in assistance for the project.

The reason for the supplementary application is that the injection well already established is not able to cope with the necessary flow of 700 m³ an hour without resulting in quite unacceptable pumping expenses. The establishment of another injection well will change this.

DONG’s work will consist in designing the well and designing the return piping. Also monitoring will be included.

The project will trigger further financing of DKK 11 m from PHARE and the World Bank.

Environmental effect

None other than the saved pumping expenses.

Grant

DKK 2,520,000

Total costs

DKK 13,500,000

Name of project

Hazardous Waste Management, Klaipeda, Lithuania

File no.

124/025-0066t

Project recipient

Klaipeda Municipality

Project manager

Krüger A/S

Project description

Supplementary grant made for the preparation of tender documents for a reception station for hazardous waste in Klaipeda in Lithuania.

Grant

DKK 212,000

Total costs

DKK 212,000

Name of project

Upgrading of Vilnius Waste Water Treatment Plant for Nitrogen and Phosphorus Removal

File no.

124/025-0067

Project recipient

City of Vilnius

Project manager

Krüger

Project description

The project is a supplemenatry grant made for an earlier project on upgrading the waste water treatment plant in Vilnius. Originally, the project was divided into three phases, corresponding to mechanical-biological treatment. It has turned out, however, that it is possible to remove nitrogen and phosphorus during the third phase of the original project, provided an extra grant is made.

Environmental effect

The discharge will be reduced by 2,000 tonnes of nitrogen per year and 155 tonnes of phosphorus per year.

Grant

DKK 4,015,000

Total costs

DKK 48,000,000

Name of project

Technical Assistance to Strengthen the Framework and Administration of Lithuanian Laws on Waste Management and on Environmental Management of Industry

File no.

124/025-0074

Project recipient

Ministry of Environment of the Republic of Lithuania

Project manager

COWI

Project description

This is a supplemenatry grant for the ongoing project by the same name (initiated in 1997). The application for a supplementary grant is for a pilot project for the drawing up of a waste plan for a large urban community.

Environmental effect

The project increases the environmental effect foreseen as a result of the original project.

Grant

DKK 1,337,306

Total costs

DKK 1,337,306

Name of project

Development of a Code of Good Agricultural Practice, Rep. of Lithuania

File no.

124/025-0077

Project recipient

Ministry of Environment and Ministry of Agriculture of Lithuania

Project manager

Danish Agricultural Advisory Centre, Skejby

Project description

Drawing up a code of good agricultural practice is a prerequisite to implementing the Nitrate Directive. The project thus has to be seen in context with a planned EU approximation project concerning the Nitrate Directive.

Environmental effect

No immediate effect, but the project will contribute to the implementation of the Nitrate Directive in Lithuania and consequent environmental improvements.

Grant

DKK 1,206,250

Total costs

DKK 1,450,991

Name of project

Cleaner Technology in Slaughterhouses, Lithuania

File no.

124/025-0080

Project recipient

Klaipeda Slaughterhouse and seven other slaughterhouses in Lithuania

Project manager

COWI

Project description

The purpose is to build know-how and install cleaner technology in the slaughtery sector in Lithuania. The project comprises two demonstration slaughterhouses (one large and the other medium-sized) and another six medium-sized slaughterhouses. Assistance is provided for carrying out an environmental audit of the slaughterhouses and possibly subsequent investments and training of cleaner technology expertise in the slaughtery industry.

Environmental effect

Reductions per year: Water consumption: 210,000 m³
Energy consumption: 18,000 Mwh
125 tonnes of BI5

Grant

DKK 7,134,450

Total costs

DKK 7,307,450

Name of project

Airborne Surveillance System for Lithuania

File no.

124/025-0082

Project recipient

Ministry of Environment of the Republic of Lithuania

Project manager

Terma Electronic A/S

Project description

In co-operation with other Lithuanian ministries, the Ministry of Environment wishes to strengthen surveillance of Lithuanian territory, including the sea and coastal area for illegal discharges of oil from ships. The purpose of the project is to co-finance Lithuanian purchases and installation of Danish equipment in a Lithuanian plane, so that Lithuania can fulfil its obligations under the HELCOM Convention regarding surveillance of own territorial waters.

Environmental effect

Prevents illegal discharges from ships in Lithuanian territorial waters.

Grant

DKK 7,310,000

Total costs

DKK 37,000,000

Name of project

Waterworks for Treatment of Groundwater for the City of Zarasai, Lithuania

File no.

124/025-0085

Project recipient

Waterworks in Lithuania

Project manager

BioBalance

Project description

Assistance for design and consulting in connection with a turnkey project on upgrading the waterworks in Zarasai (pop. 10,000). Because of high concentrations of iron and manganese and lack of treatment at the waterworks, the quality of the drinking water does not live up to EU standards. After completion of the project, the quality of drinking water will be in compliance with EU requirements.

Environmental effect

Improved quality of drinking water for approx. 10,000 people.

Grant

DKK 700,000

Total costs

DKK 2,700,000

Name of project

Oil Spill Response Equipment, Lithuania

File no.

124/025-0087

Project recipient

Ministry of Environment of the Republic of Lithuania

Project manager

Ro-Clean Desmi

Project description

On the basis of projects implemented with a view to establishing oil spill response measures of international standards in Lithuania, a list of necessary equipment has been drawn up. The purchase of the equipment on the list is financed by Denmark, Finland and Lithuania with one-third each.

Environmental effect

Oil spill reception in case of accidents at sea.

Grant

DKK 6,759,395

Total costs

DKK 20,278,185

Name of project

Project Formulation Mission for the Project “Approximation of Lithuanian Capacity, Policies on Nature Protection to EU requirements, with Particular Focus on Implementation of the EEC Habitats Directive (92/43) and the EEC Birds Directive (79/409)”

File no.

124/025-0097

Project recipient

Ministry of Environment of the Republic of Lithuania

Project manager

Rambųll

Project description

Formulation of project document for a project to ensure that Lithuania can implement the EU Directives on Habitats and Birds, including capacity building, data collection, action plans, etc. Furthermore, it is assessed whether there is a need for further EU approximation initiatives in the area of nature.

Environmental effect

Preliminary work for a major project.

Grant

DKK 183,250

Total costs

DKK 183,250

Name of project

Evaluation of Tenders for the Project “Approximation of Lithuanian Capacity, Policies on Nature Protection to EU Requirements, with Particular Focus on Implementation of the EEC Habitats Directive (92/43) and the EEC Birds Directive (79/409)”

File no.

129-0113

Project recipient

Ministry of Environment of the Republic of Lithuania

Project manager

Modus Consult

Project description

Appraisal of tenders submitted for the above project..

Environmental effect

Preliminary work for a major project

Grant

DKK 173,883

Total costs

DKK 173,883

Name of project

Formulation of Project Document “Afforestation of Abandoned Agricultural Land Based on Sustainable Planning and Environmentally Sound Forest Management”

File no.

124/025-0098

Project recipient

Ministry of Environment of the Republic of Lithuania

Project manager

Skovdyrkerforeningerne

Project description

Appraisal of project document for a project to ensure that afforestation can be promoted and managed in Lithuania in such a way that it promotes nature protection, sustainable forestry and socio-economic needs at the same time. The purpose of the project is to develop guidelines and policies and provide education and training.

Environmental effect

Preliminary work for a major project.

Grant

DKK 296,032

Total costs

DKK 296,032

Name of project

Desk Appraisal of the Project “Afforestation of Abandoned Agricultural Land Based on Sustainable Planning and Environmentally Sound Forest Management”

File no.

124/025-0099

Project recipient

Ministry of Environment of the Republic of Lithuania

Project manager

Danagro Adviser A/S

Project description

Desk Appraisal of the above project document.

Environmental effect

Preliminary work for a major project.

Grant

DKK 48,947

Total costs

DKK 48,947

Name of project

Appraisal of Tenders Submitted for the Project “Afforestation of Abandoned Agricultural Land Based on Sustainable Planning and Environmentally Sound Forest Management”

File no.

124/025-0103

Project recipient

Ministry of Environment of the Republic of Lithuania

Project manager

Modus Consult

Project description

Desk Appraisal of the above project document.

Environmental effect

Preliminary work for a major project.

Grant

DKK 42,080

Total costs

DKK 42,080

Name of project

Preparation and Implementation of Seminar on the Possibilities of Strengthening Bicycling in Lithuania

File no.

124/025-0106

Project recipient

Public institutions and NGO’s

Project manager

Anders Nyvig

Project description

In Lithuania, there is political will to strengthen bicycling as a real transport alternative, not least in major Lithuanian cities where increasing car traffic has led to strongly aggravated environmental and traffic nuisances. The purpose of holding a seminar/workshop with “broad” Danish and Lithuanian participation is to uncover possibilities and barriers in connection with such development.

Environmental effect

Cannot be calculated.

Grant

DKK 648,500

Total costs

DKK 648,500

Name of project

Project Formulation Mission for the Project “Afforestation of Abandoned Agricultural Land Based on Sustainable Planning and Environmentally Sound Forest Management”

File no.

129-0116

Project recipient

Ministry of Environment of the Republic of Lithuania

Project manager

Modus Consult

Project description

Appraisal of tenders submitted for the above project.

Environmental effect

Preliminary work for a major project.

Grant

DKK 182,715

Total costs

DKK 182,715

Environmental projects in Poland

In the period 1997 – 98, DEPA has supported a total of 185 projects in Poland. Investment projects have accounted for just under 50% of the Danish assistance. Altogether, DKK 490 m has been granted as assistance for projects in Poland, corresponding to just under one-third of total Danish environmental assistance to Eastern Europe.

Co-operation with Poland is administered on the basis of the Country Programme for Poland, which was prepared for the first time in 1996 for the period 1996-97. The Country Programme describes and prioritises the individual activity areas and the form of co-operation. The Country Programme has been extended to cover also 1998.

Formally, co-operation takes place through a work group and a steering committee. In 1998, two meetings were held in the work group and one meeting in the steering committee.

In May 1998, Polish Minister of Environmental Protection, Natural Resources and Forestry, Jan Szyszko, visited Denmark. In connection with his visit, meetings were held with the Danish Minister of Environment and Energy, Svend Auken. Besides, there was an opportunity to visit some of the Danish partners of co-operation on the projects. During the visit, DEPA was invited to visit Poland and participate in the annual environmental days in June 1998. Leo Larsen, under-secretary of DEPA, participated in the environmental days and, on that occasion, was awarded a golden medal by the Polish Minister of Environmental Protection, Natural Resources and Forestry for Danish assistance to Poland.

In 1998, co-operation with Poland was dominated by a number of projects initiated after the floods in Poland (cf. Annual Report for 1997). Assistance has been provided for a project to help establish a modern flood warning system and a basis for viable flood control. The project is closely connected with a similar Danish activity in the Czech Republic. Besides this assistance, assistance has been provided for a number of projects aimed at rehabilitating the infrastructure, primarily within the water sector. The whole of this work is concentrated in the Opole region of Poland. Total Danish assistance to Poland after the floods amounts to DKK 25 m.

In addition, assistance was provided for water supply and waste water projects, so that Danish assistance provided for water projects totalled DKK 53.2 m.

In the area of air, a mission was implemented in 1998 to identify new projects in co-operation with the Polish Ministry of Environmental Protection, Natural Resources and Forestry. Some of these projects will be implemented later.

In connection with the preparation of a new Country Programme for 1999-2000, priority has been given to air projects in steelworks and in the chemical industry. This priority is reflected in the fact that a project was initiated at a steelwork in southern Poland as early as in 1998.

The waste area, including hazardous waste, will be given higher priority in future as a result of Poland’s preparation for EU membership. A hazardous waste project was initiated in the southern regions of Poland in 1998.

It should be noted that in all projects in all of the activity areas, high priority is given to the strengthening of EU approximation. The planning of future institutional projects as well as investment projects will, as far as possible, take into account the need to comply with EU environmental directives.

In connection with the EU approximation, priority has been given to providing assistance and consulting for the legislation process, including the implementation of EU directives. In 1998, such a project was initiated concerning implementation of the IPPC-Directive (Integrated Prevention and Pollution Control).

Within protection of nature, assistance was provided in 1998 for management and information to the public about an important bird reserve. Assistance was also provided to the National Centre for Nature and Forestry Teaching at the Agricultural University of Warsaw to enable them to offer courses in practical sustainable forestry at all levels and information about nature to teachers and to the forestry and national park staffs. Moreover, assistance has been provided for the preparation of a call for tenders in 1999 for a major project in the Bialowieza forest, which is a unique lowland virgin forest in a European context. The project to be prepared thus supports Poland’s compliance with obligations under both EU law and a number of important conventions within nature protection and biodiversity.

In October 1998, a local project co-ordinator was appointed in Poland with a view to strengthening DEPA’s co-operation with the Polish Ministry of Environmental Protection, Natural Resources and Forestry and the Polish National EcoFund and strengthening project identification, monitoring of projects under implementation and other bilateral activities. The project co-ordinator is based in the Polish National EcoFund in Warsaw.

Name of project

Cleaner Technology in Polish Breweries

File no.

124/031-0010

Project recipient

The Polish brewery industry

Project manager

Danbrew Ltd. A/S

Project description

The purpose of the project is to introduce cleaner technology solutions in the Polish brewery industry. Environmental audits will be carried out in three to six breweries, and one of them will be selected as a demonstration project. Local consultants will participate and receive on-the-job training in connection with the implementation of the project. The results of the project will be disseminated to the industry through an open-house arrangement at the brewery selected as demonstration project, and a pamphlet will be prepared presenting the results of the project.

Environmental effect

Cannot be calculated.

Grant

DKK 3,023,500

Total costs

Cannot be calculated until the co-financing has been negotiated with the brewery selected as demonstration project.

Name of project

Integrated Programme of Hazardous Waste Management in the South Region, Poland

File no.

124/031-0023

Project recipient

Katowice, Krakow and Opole regions

Project manager

Chemcontrol

Project description

The purpose of the project is to assess existing methods of removing hazardous waste in the southern part of Poland, dominated by very heavy industry. The project will focus on planning a package solution to the problems of removing hazardous waste by drawing on Danish experience and methods already applied in Denmark.

Environmental effect

Transfer of environmental know-how/technology concerning hazardous waste to environmental authorities in Poland.

Grant

DKK 3,288,490

Total costs

DKK 6,576,980

Name of project

Assistance to the Polish Ministry of Environment Protection, Natural Resources and Forestry on Implementation of EU’s IPPC Directive

File no.

124/031-0044

Project recipient

Ministry of Environmental Protection, Natural Resources and Forestry, Poland

Project manager

The National Association of Local Authorities in Denmark

Project description

Training of eight Polish environmental inspectors from Polish voivodships in preparing integrated environmental approvals in the form of “hands-on”-training in selected counties and municipalities in Denmark. In this connection, a seminar will be held for a wider circle of civil servants from the Polish environmental administration on integrated environmental approvals and Best Available Techniques (BAT).

Environmental effect

No direct environmental effect, but the project aims at an earlier transposition and implementation of the IPPC-Directive in Poland.

Grant

DKK 1,611,956

Total costs

DKK 1,611,956

Name of project

Reduction in the Use of and Substitution of Hazardous Chemicals in the Dyeing Industry in Poland

File no.

124/031-0088

Project recipient

Dyeing works and textile industries in Poland

Project manager

Danish Technological Institute (DTI)

Project description

The purpose of the project is to reduce the consumption of hazardous process chemicals and dyestuffs by introducing a scoring system which makes it possible to avoid the most problematic chemicals. Furthermore, it is the purpose to assist chemical producers in the development of more environmentally friendly dyestuffs and process chemicals and in reducing consumption of the above chemicals in five dye works.

Environmental effect

Cannot be quantified.

Grant

DKK 2,113,715

Total costs

DKK 2,113,715

Name of project

Sustainable Production and Use of Wood Residues for Energy Purposes, Wejherowo, Gdansk Region

File no.

124/031-0116

Project recipient

Wejherowo Municipality, local forest administrators and the Baltic Energy Conservation Agency

Project manager

Rambųll

Project description

The purpose of this project is to introduce sustainable forestry and energy management to the forest administration as well as to the regional and municipal administration in Wejherowo through training and workshops and by preparing a basis of decisions for future use of biomass for energy production in Wejherowo.

Environmental effect

Increased protection of nature through sustainable management of the forest and the possibility of using biomass for energy production.

Grant

DKK 1,558,447

Total costs

DKK 2,593,038

Name of project

Establishing a Demonstration Wetland Reserve at Karsiborska Kepa in Northwest Poland

File no.

124/031-0118

Project recipient

Polish Society for Protection of Birds, OTOP-Birdlife Poland

Project manager

DOF-Birdlife

Project description

The purpose is to develop an important bird reserve in the Odra delta as an example of nature management and awareness raising by implementing a management plan for the area, inform the public and authorities in Poland about the natural amenities and the management of these areas, implement surveillance of nature and improve knowledge of the area in connection with establishment of a visitors’ centre.

Environmental effect

Improved management and surveillance of an important resting and breeding area for birds (about 180 ha), information to the public and the authorities, improved possibilities of ecotourism and strengthened administrative practice.

Grant

DKK 1,398,700

Total costs

DKK 1,845,930

Name of project

Utilisation of Colliery Gas from Coal Mines, Poland

File no.

124/031-0119

Project recipient

Five mining companies in the Katowice region

Project manager

Viggo Folmer A/S

Project description

Installation of five gas engines in five different mines in the Katowice region. Before mining of coal can take place, it is necessary to remove the methane from the mining zone. This is done by establishing a number of wells in the area and using either vacuum pumps to pump up the methane or by establishing suction in the mining shafts. This method not only leads to substantial energy savings but has the further advantage of preventing the methane from being discharged into the atmosphere.

The Polish EcoFund participates in the project. PHARE has contributed through the purchase of equipment.

Environmental effect

Reduced discharge of about 125,000 million m³ of methane
500 tonnes of SO₂
300 tonnes of NO_x
300 tonnes of particles.

Grant

DKK 4,665,000

Total costs

DKK 200,000,000

Name of project

Cleaner Technology Transfer Programme for the Electro- Mechanical Industry in Poland

File no.

124/031-0120

Project recipient

The Electro-Mechanical Industry in south-western Poland and local environmental authorities

Project manager

Institut for Produktudvikling

Project description

The purpose of the project is to introduce cleaner technology in the electro-mechanical industry in Poland. In that connection, demonstration projects will be established in 2-3 companies out of the 5-6 companies where environmental audits including life cycle appraisals of their products are carried out. Companies where demonstration projects are established will be assisted in setting up simple environmental management systems based on their quality assurance systems.

Environmental effect

Cannot be calculated until completion of project.

Grant

DKK 4,393,429

Total costs

Cannot be calculated before the inputs made by the demonstration companies are known.

Name of project

Aeration and Management System for the Legnica Waste Water Treatment Plant

File no.

124/031-0122

Project recipient

Legnica

Project manager

COWI

Project description

In future, the Legnica treatment plant is to operate as a regional treatment plant for five towns. The plant is to be extended in such a way that it complies with EU as well as Polish discharge requirements. The project will comprise design activities, call for international tenders, monitoring and training in connection with purchase and implementation of equipment, which is expected to be financed via the MKŲ-scheme.

Environmental effect

Calculated reduction per year: 834 tonnes of BOD, 517 tonnes of nitrogen and 78 tonnes of phosphorus.

Grant

DKK 4,010,541

Total costs

DKK 104,600,000, of which DKK 16,400,000 are expected to be financed via the MKŲ-scheme

Name of project

Aeration and Management System at Wroclaw Waste Water Treatment Plant

File no.

124/031-0124

Project recipient

Wroclaw

Project manager

Krüger International Consult A/S

Project description

The purpose of the project is to extend the biological part of Wroclaw’s largest treatment plant to comply with EU and Polish discharge requirements. The project comprises design activities, call for international tenders, monitoring and training in connection with purchase and implementation of equipment, which is expected to be financed via the MKŲ-scheme.

Environmental effect

Calculated reduction per year: 3,700 tonnes of BOD, 730 tonnes of nitrogen and 110 tonnes of phosphorus.

Grant

DKK 2,975,704

Total costs

DKK 359,600,000, of which DKK 18,700,000 are expected to be financed via the MKŲ-scheme

Name of project

Aeration and Management System for the Kielce Waste Water Treatment Plant

File no.

124/031-0125

Project recipient

Kielce

Project manager

NIRAS A/S

Project description

In future, the Kielce treatment plant is to operate as a regional water treatment plant for four towns and is to be enlarged so as to comply with EU and Polish discharge requirements. The project comprises design activities, call for international tenders, monitoring and training in connection with the purchase and implementation of equipment, which is expected to be financed via the MKŲ-scheme.

Environmental effect

Calculated reduction per year: 2,621 tonnes of BOD, 310 tonnes of nitrogen and 110 tonnes of phosphorus.

Grant

DKK 4,010,000

Total costs

DKK 60,000,000, of which DKK 25,000,000 have been applied for via the MKŲ-scheme

Name of project

Water Resource Management in Strzelce Opolskie, Poland

File no.

124/031-0131

Project recipient

Strzelce Opolskie Municipality and Opole Region

Project manager

Krüger International Consult

Project description

The project will contribute to ensuring the water supply in the area. The project will remedy the serious environmental problems that have arisen because of excess pumping from the groundwater reservoir in connection with water supply, dewatering of mines, pollution from landfills and percolating waste water.

Environmental effect

Reducing water catchment by 2.4 m m³ per year, avoiding percolating landfill percolate, avoiding percolating contaminated rain water, reducing sulphate content of groundwater to <100 mg/l. Compliance with EU drinking water directive.

Grant

DKK 2,600,000

Total costs

DKK 9,400,000

Name of project

Flood Control and Warning Systems for the Rivers Odra and Vistula

File no.

124/031-0134

Project recipient

Poland, area within the run-off areas for the rivers Odra and Vistula

Project manager

Dansk Hydraulisk Institut

Project description

A warning system will be established as part of the project, covering critical areas of the Odra and Vistula river systems. This will enable precise predictions of water amounts and levels to be made for operational management in connection with floods. Furthermore, the established model system can be used for planning and development purposes where effects of various measures can be simulated.

Environmental effect

Prevention of effects of floods.

Grant

DKK 6,323,190

Total costs

DKK 15,833,190

Name of project

Completion of two Projects Concerning Surface Water in Poland

Project recipient

Torun-Bydgoszcz County, Poland

Project manager

Southern Jutland County

Project description

Completion of two stalled projects in Poland. The project has two components, one component concerning environmentally friendly river maintenance and one component concerning lake restoration methods with special focus on biomanipulation (depleting of non-predatory fish). The results of the work are to be spread to other Polish authorities with responsibility for the environmental quality of surface water.

Environmental effect

The project is expected to lead to an improved physical river quality and improved environmental quality in one or more of the lakes in the area.

Grant

DKK 1,022,000

Total costs

DKK 1,022,000

Name of project

Formulation Mission for the Project “Protection, Public Awareness, Sustainable Management and Income Generation in the Bialowieza Forest, Poland”.

File no.

124/031-0138

Project recipient

Bialowieza National Park, Bielowieza Forest Promotional Complex, Ministry of Environment Protection in Poland

Project manager

Ankerhusgruppen

Project description

The Bialowieza Forest is a unique European lowland virgin forest, which is the object of great public awareness, also in Denmark. The purpose of this project is to formulate and prepare a co-operation project for a call for tenders. This project is intended to strengthen training concerning sustainable environmentally friendly forestry in the local state forest district and improve the possibilities of awareness raising, recreation and public access.

Environmental effect

None, preparation of project document.

Grant

DKK 294,106

Total costs

DKK 294,106

Name of project

Assistance to the Opole Region after the Floods – Part 1

File no.

129-0072 and 124/031-0142

Project recipient

The Opole Region and the towns of Glucholazy, Opole and Bzreg

Project manager

Krüger International Consult A/S

Project description

Two part programmes have been initiated on the basis of a project identification mission to the Opole Region after the floods in 1997. This part programme comprises replacement of a recipient monitoring system for the Odra river, establishment of a waste water pump station in Opole, repairs to the waste water treatment plant in Bzreg and re-establishment of a water conduit in Glucholazy.

Environmental effect

Primarily rehabilitation of damaged infrastructure.

Grant

DKK 4,481,401

Total costs

DKK 9,200,000

Name of project

Assistance to the Opole Region after the Floods – Part 2

File no.

124/031-0143

Project recipient

The Opole Region and the towns of Kedzierzyn-Kozle, Glucholazy, Popielow, Lewin Breski

Project manager

COWI

Project description

Two part programmes were initiated on the basis of a project identification mission to the Opole Region after the floods in 1997. This part programme comprises replacement of boilers in seven schools in the towns of Glucholazy, Popielow and Lewin Breski, re-establishment of the water supply system and extension of the waste water conduit in Glucholazy, re-establishment of water treatment plant and extension of the supply network in Kedzierzyn-Kozle and collection of septic sludge in Lewin Breski.

Environmental effect

Primarily rehabilitation of damaged infrastructure.

Grant

DKK 6,965,173

Total costs

DKK 10,200,000

Name of project

Preparation of Waste Plan and Establishment of Reception and Treatment Facilities for Ship-Generated Waste, Ports of Szczecin and Swinoujscie

File no.

124/031-0148

Project recipient

Port of Szczecin and Swinoujscie Authorities and the operating company Miedzyodzre

Project manager

Carl Bro as International

Project description

Assistance to the port authorities in Szczecin and Swinoujscie in connection with preparing and implementing a waste and management plan. The plan comprises adjustment of the organisational structure to the requirements of the MARPOL and HELCOM Conventions. The project furthermore comprises assistance concerning implementation of reception and handling facilities for ship-generated waste in the Port of Szczecin.

Environmental effect

Handling of 8,000 tonnes of oily ship-generated waste per year, 4,000 tonnes of ballast water per year and 6,000 tonnes of waste water per year.

Grant

DKK 3,099,197

Total costs

DKK 18,700,000

Name of project

Air Pollution Installations for Steelworks Huta im. Tadeusza S.A. in Krakow, Poland

File no.

124/031-0150

Project recipient

Steelworks Huta im. Tadeusza Sendzimira in Krakow

Project manager

Skandinavisk Miljų Service

Project description

Installation of equipment (electrostatic precipitators, etc.) for reduction of air pollution from the Steelworks Huta Sendzimira in Krakow. The project comprises two partprojects: 1) Reduction of fly ash emission from four coal-fired boiler plants; 2) Reduction of dust emission from two converter plants.

Environmental effect

492 tonnes of fly ash per year.

Grant

DKK 6,000,000

Total costs

DKK 36,226,400

Name of project

Local Project Co-Ordinator (LPC), Poland

File no.

124/031-0151

Project recipient

Ministry of Environmental Protection, Natural Resources and Forestry and the Polish National EcoFund Fundusz

Project manager

DEPA

Project description

The purpose of the project is to strengthen co-operation with Fundusz and with the Ministry of Environmental Protection, Natural Resources and Forestry on the projects in Poland, especially concerning communication, project follow-up and project identification. This is achieved by appointing a Local Project Co-ordinator (LPC), who will sit in the National EcoFund, Fundusz, which will provide office facilities, etc.

Environmental effect

Strengthening of environmental co-operation between the Polish Ministry of Environment, the Polish National EcoFund, Fundusz and DEPA.

Grant

DKK 592,900

Total costs

DKK 592,900

Name of project

Desk Appraisal of Project Document “Protection, Public Awareness, Sustainable Management and Income Generation in the Bialowieza Forest, Poland”

File no.

124/031-0153

Project recipient

Bialowieza National Park, Bialowieza Forest Promotional Complex

Project manager

NORDECO

Project decsription

Desk-appraisal of the above project document.

Environmental effect

None – appraisal.

Grant

DKK 81,574

Total costs

DKK 81,574

Name of project

Sludge Treatment Plant in Connection with Rebuilding of the Opole Waste Water Treatment Plant, Poland

File no.

124/031-0154

Project recipient

Opole town and Opole Water Supply Company

Project manager

BioBalance

Project description

The project comprises a sludge treatment plant at the waste water treatment plant. The sludge treatment consists in dewatering and hygienisation of the sludge, which can subsequently be used as fertiliser in agriculture. The project is part of a major rebuilding and modernisation of the plant, which is, at the same time, extended with an improvement of the biological waste water treatment.

Environmental effect

Reduction in the discharge of waste water.
Sludge: 149,500 tonnes per year.
BOD5: 4,700 tonnes per year.
COD 9,000 tonnes per year.
Nitrogen: 610 tonnes per year.
Phosphorus: 180 tonnes per year.

Grant

DKK 5,370,000

Total costs

DKK 113,020,000

Name of project

Development of Centre for Nature and Forestry Education in Rogow

File no.

124/041-0161

Project recipient

University of Agriculture of Warsaw; Faculty of Forestry and Forest Research Station and Centre for Nature and Forestry Education in Rogow

Project manager

Skovskolen

Project description

The purpose is to develop the existing centre for nature and forestry education in Rogow, under the University of Agriculture of Warsaw, into a well-functioning national centre which is able to offer courses in practical sustainable forestry at all levels and information about nature to teachers and forestry and nature/national park staff.

Environmental effect

Increased public awareness through modern methods of providing information and training of forestry staff at all levels in sustainable forestry and protection of nature through a transfer of environmental know-how from Denmark on nature and environment teaching.

Grant

DKK 3,000,000

Total costs

DKK 3,097,200

Name of project

Rehabilitation and Extension of Kedzierzyn-Kozle Waste Water Treatment Plant

File no.

129-0071 and 124/031-0144

Project recipient

Kedzierzyn-Kozle

Project manager

Rambųll

Project description

The project is part of the Danish assistance provided after the floods in Poland/Czech Republic in the summer of 1997. The project concerns rehabilitation/extension of the water treatment plant, which was being extended when the flood occurred. The project comprises design and supply of equipment for biological waste water treatment.

Environmental effect

Calculated reduction: 986 tonnes of BOD per year, 117 tonnes of nitrogen per year and 51 tonnes of phosphorus per year.

Grant

DKK 7,910,440

Total costs

DKK 64,000,000

Environmental projects in Romania

In 1998, co-operation with Romania was dominated by a substantial increase in activities. Great efforts have been made to initiate projects that can contribute to reducing air pollution, which is one of the most serious problems in Romania. Funds were allocated for installing residual carbon measuring device at the Deva coal-fired power station; measuring equipment and filters in the chemical factory FIBREX, installation of filters and incineration plants in the furniture factory Silvarom and installation of precipitators, etc in the cement factory Casial Deva.

Furthermore, priority has been given to institutional strengthening of local environmental management in the County of Neamt. One element has been the strengthening of the possibilities of proper emission measuring.

In addition, two waste water treatment plants have been expanded, one in Mangalia on the Black Sea and the other in Roman in the County of Neamt.

In Tasca, grants have been made for erecting an incineration plant with a view to ensuring the necessary heating for the town. The fuel to be used is sawdust, which is currently being discharged into the river and not used as an energy resource.

Within the framework of the co-operation, investment funds were also granted for establishing a modern landfill site outside the town of Piatra Neamt.

In 1998, closer co-operation was established among the donors. There has been an exchange of experience, especially between the EU and DEPA with a view to ensuring greater successful implementation of projects in Romania.

Name of project

Establishment of Modern Landfill Site in Piatra Neamt

File no.

124/033-0012

Project recipient

Piatra Neamt Municipality

Project manager

Rambųll

Project description

Establishment of a modern landfill site for the town of Piatra Neamt. The project is supplementary to an earlier project.

Environmental effect

The first cell of 20,000 m³ can hold 150,000 tonnes.

Grant

DKK 3,092,750

Total costs

DKK 3,092,750

Name of project

Capacity Building of the Local Environmental Authority of Neamt County

File no.

124/033-0022

Project recipient

Neamt County and the Romanian Ministry of Environment

Project manager

Rambųll

Project description

The project is a demonstration project aimed at strengthening the local authority in relation to inspection, control and monitoring.

Environmental effect

Improved follow-up on the environmental problems in the region.

Grant

DKK 3,524,357

Total costs

DKK 4,524,515

Name of project

Residual Coal Meters at Mintia Coal Power Station

File no.

124/033-0024

Project recipient

Mintia Coal Power Station

Project manager

Mark & Wedell

Project description

Installation of advanced measuring equipment at Mintia Coal Power Station located in central Romania. The equipment ensures a reduced consumption of coal through better incineration and thus lower leakage of gases.

Environmental effect

A reduction in leakage of 14,600 tonnes of CO₂ per year and a reduction in the consumption of coal of 5,840 tonnes per year.

Grant

DKK 1,699,700

Total costs

DKK 1,791,700

Name of project

Environmental Improvements at Fibrex in Romania

File no.

124/033-0025

Project recipient

The Chemical Factory Fibrex

Project manager

DanCem

Project description

The project contains two parts, viz. a project concentrated on installation of emission measuring equipment and a project concerning the installation of “Mist eliminators”.

Environmental effect

A reduction in leakage of 200,000 kg NH₃ per year.

Grant

DKK 4,568,934

Total costs

DKK 9,190,194

Name of project

Modernisation of Waste Water Plant in Mangalia

File no.

124/033-0027

Project recipient

Constanza County

Project manager

NIRAS

Project description

Rebuilding and modernisation of Mangalia waste water treatment plant located on the Black Sea.

Environmental effect

A reduction of 952 BOD₅ per year and 716 tonnes of SS per year

Grant

DKK 10,499,000

Total costs

DKK 37,500,000

Name of project

Feasibility Study for Demonstration Project for the Use of Sawdust in Neamt County

File no.

129-0075

Project recipient

Stakeholders in Neamt County

Project manager

Carl Bro as

Project description

Substantial environmental problems exist in connection with the removal of sawdust from a very considerable sawmill production in Neamt County. An extensive feasibility study has been carried out to map out the different possibilities of using the sawdust, which is spread over the region, in the most optimum way.

Environmental effect

Presentation of proposal for a solution.

Grant

DKK 851,350

Total costs

DKK 851,350

Name of project

Implementation Project for the Use of Sawdust in Neamt County

File no.

124/033-0028

Project recipient

Tasca Municipality

Project manager

Grue & Hornstrup

Project description

Establishment of incineration of sawdust from a sawmill where the resulting energy/heating is used at the sawmill, and surplus heating as a supplement for the district heating network.

Environmental effect

A reduction of 19,500 tonnes of sawdust per year. In addition, a stable environmentally friendly energy source for production and for the district heating network, as the present supply lacks stability.

Grant

DKK 8,425,000

Total costs

DKK 18,585,000

Name of project

Environmental Improvements at the Furniture Factory Silvarom

File no.

124/033-0029

Project recipient

The Furniture Factory Silvarom

Project manager

H. Moldow

Project description

Mounting of filters and installation of boiler to ensure a reduction of the air pollution. The incineration of the dust caught and the use of return air result in energy savings at the factory.

Environmental effect

Dust reduction of 300 tonnes per year and a reduced consumption of 1,075 tonnes of fuel per year.

Grant

DKK 2,915,047

Total costs

DKK 10,011,485

Name of project

Electrostatic Precipitator at the Casial Deva Cement Plant

File no.

124/033-0030

Project recipient

Casial Deva

Project manager

DanCem

Project description

Marked environmental improvements by upgrading and installing environmental equipment on a production line turning out 3,800 tonnes of clinkers per day. Precipitators are installed in the boiler, coolers and cement mill. Furthermore, the water injection system connected with the cement mill is being rebuilt.

Environmental effect

A reduction of 7,226 tonnes of dust per year.

Grant

DKK 5,490,000

Total costs

DKK 27,450,000

Name of project

Feasibility Study of the Waste Water Treatment Plant in Roman

File no.

120-0109

Project recipient

Roman Municipality

Project manager

NIRAS

Project description

Preparation of feasibility study to be completed by August 1999. The project will comprise an implementation plan.

Environmental effect

Proposal for improvement of the waste water treatment plant.

Grant

DKK 375,040

Total costs

DKK 425,040

Environmental Projects in Russia

Like earlier, co-operation with Russia has been concentrated on the Russian Baltic Sea run-off area and the Moscow region.

The economic crisis in Russia also left its mark on Danish-Russian environmental co-operation, as the Russians were no longer able to put up the co-finance agreed on earlier. This affected a number of projects.

In the St. Petersburg and Leningrad Region, assistance was concentrated in St. Petersburg in the form of further support for the water investment programme under EBRD. Two major components, a pilot project on leak detection in the island of Vasilievsky in the middle of the Neva river and a project concerning establishment of a PR-department in the Vodokanal (the water company), St. Petersburg, received total assistance of about DKK 11 m.

The economic crisis had the further effect that DEPA provided assistance for another project concerning renovation of waste water pipes by means of the no-dig method. The project had been initiated with Russian financing, but had to be suspended because of the crisis. As the renovation is related to the old part of St. Petersburg, where many pipes have already broken down, DEPA granted support for completion of the project.

Finally, assistance was provided for a project on reception facilities for oil waste in the Port of St. Petersburg.

In the Kaliningrad Region, Danish assistance was concentrated on two projects, one in the city and one in the region.

The water sector continues to be given high priority, which is evidenced in both projects. One of the projects concerns a badly needed upgrading of environmental laboratories, the other project is concerned with regional co-operation on water monitoring in the Baltic Sea.

In addition, 1998 has been characterised by further preparations for a water investment programme under EBRD, with not only Denmark, but also Sweden, the NIB and NEFCO participating. The project will not be seriously initiated until the end of 1999 or beginning of 2000.

Danish co-operation with Russia is split up in such a way that negotiations are conducted directly with regional environmental authorities in St. Petersburg and Kaliningrad for projects in these regions, whereas projects in other parts of Russia are negotiated with the Russian State Committee for Protection of the Environment in Moscow. Geographically, activities have traditionally been limited to the Baltic Sea region, more precisely to the two above-mentioned regions plus Pskov and Novgorod and the Moscow region. Assistance on a smaller scale has been provided in the Smolensk region, and because of the successful result of this assistance, it has been decided to include Smolensk in the geographical target area.

An OECD Environmental Performance Review for Russia is being prepared. In order to ensure that Russia would be able to make the expected contribution to this publication, assistance for this purpose was provided to the Russian environmental authorities in 1998. In Noginsk in the Moscow region, a project has been initiated to map out potential sources of pollution, including a large landfill site threatening a groundwater deposit. Assistance has been provided for re-establishment and 2-year operation of an energy institute in Moscow and for an introductory project concerning air pollution and waste products from coal-fired power stations. In co-operation with the Danish Energy Agency, a project has been initiated to demonstrate energy efficiency in Russian dairies. In Smolensk, support for hazardous waste and cleaner technology has continued with a training programme.

Within the nature area, assistance has been provided to Russia for a project aimed at nature awareness raising and involvement of the local population in the management of four selected especially protected natural areas. In addition, preparations for a number of new projects in St. Petersburg and in the three oblasts around St. Petersburg and Kaliningrad have been initiated.

Name of project

Development of Environmental Monitoring in Kaliningrad

File no.

124/034-0072

Project recipient

The laboratory of the State Committee on Environmental Protection of the Kaliningrad Region and the Laboratory of Sanepid

Project manager

Technical College at Slagelse/DHI (VKI)

Project description

The purpose of the project is to improve the environmental monitoring in the Kaliningrad oblast through improved data collection, better utilisation of data, education and training of personnel, reporting, etc. in a number of selected environmental laboratories. The project also includes a small supply of equipment for the upgrading of primarily the two laboratories.

Environmental effect

Improved data collection and training of personnel in the laboratories to improve the quality of the environmental analyses performed.

Grant

DKK 3,576,401

Total costs

DKK 4,139,351

Name of project

Groundwater Protection and Remediation in Noginsk District, Moscow Region

File no.

124/034-0073

Project recipient

Vsegingeo, Geological Institute in the Moscow Region

Project manager

GEUS

Project description

The bulk of the project will be concentrated on ensuring better groundwater protection in a selected area, which, at the same time, can operate as a demonstration project for other parts of Russia. Vulnerability mapping, extension of the monitoring programme and building of a flow model will be carried out. Priorities will be set for the most serious problems, and 2-3 project programmes for e.g. preventive measures will be prepared.

Environmental effect

Basis of improved ground water protection

Grant

DKK 3,000,000

Total costs

DKK 3,650,000

Name of project

Re-establishment and Operation of RDIEE in Moscow

File no.

124/034-0074

Project recipient

Russian-Danish Institute for Energy Efficiency, Moscow (RDIEE)

Project manager

European Institute of Environmental Energy (EIEE)

Project description

Re-establishment of Russian-Danish Institute for Energy Efficiency. It is the intention that, in addition to selling its know-how and services to Danish as well as Russian companies, the Institute shall assist the Ministry in its work around the Baltic Sea and in the sector-integrated environmental programmes. The Institute is intended to be self-financing over a 3-year period.

Environmental effect

Improved access to know-how in the area of energy efficiency in Russia.

Grant

DKK 4,000,000

Total costs

DKK 6,200,000

Name of project

Contribution Towards a more Sustainable Russia – Integrating Protected Areas in a Regional Context

File no.

124/034-0076

Project recipient

Nizhnesvirksy, Bryansky Les, Orėl and Oksky Zavovekniks

Project manager

WWF Denmark

Project description

Russia has a large and unique biodiversity, and efforts are made to conserve this biodiversity through a network of protected areas. The protected areas typically interact with surrounding local communities. The idea is to establish a new concept for better integration of protected areas in the local communities in order to foster local interest in the conservation of these areas at a time of insufficient national funds for protection and to strengthen the protection of and information about four concrete areas: Nizhnesvirsky, Bryansky Les, Orėl and Oksky.

Environmental effect

Increased nature protection through the transfer of Danish knowledge about nature conservation and protection based on multi-purpose uses of areas.

Grant

DKK 6,944,983

Total costs

DKK 8,634,938

Name of project

Provision of Reception Facilities for Ship-Generated Waste in St. Petersburg

File no.

124/034-0079

Project recipient

Port of St. Petersburg Authorities

Project manager

Carl Bro as International

Project description

The purpose of the project is to perform a feasibility study for establishing reception facilities in accordance with the requirements of the MARPOL Convention and for procuring the necessary financing and to prepare the design for the facilities. In co-operation with the port authorities, the project is intended to prepare and introduce a Port Waste Management Plan to ensure environmentally responsible handling of ship-generated waste in the port. The intention behind the project is to avoid unlawful oil pollution of the Baltic Sea by establishing the possibilities of lawful removal of waste in the Port of St. Petersburg. The project should be seen in the context of similar projects implemented or planned in a number of other Eastern European Baltic Sea ports.

Environmental effect

Preliminary project for major project.

Grant

DKK 1,644,910

Total costs

DKK 1,644,910

Name of project

Environmental Management in the Moscow Area

File no.

124/034-0080

Project recipient

Russia

Project manager

Danish Power Consult A/S

Project description

On the basis of an earlier Carl Bro identification project concerning fly ash from power stations, a project has been initiated consisting in a seminar on prioritising and implementing environment-improving mechanisms in the power plant industry and in preparation of a report with concrete detailed proposals for initiating projects in the area.

Environmental effect

Transfer of knowledge of environment-improving possibilities in the power station industry and identification of concrete projects

Grant

DKK 995,000

Total costs

DKK 1,415,000

Name of project

Strengthening of Russian Institutional Capacity for OECD EPR

File no.

124/034-0083

Project recipient

Russian environmental authorities

Project manager

COWI

Project description

The purpose of the project has been to strengthen the Russian authorities’ capacity with a view to supplying the Russian contribution to OECD and to the TN-ECE’s Environmental Performance Review, which is expected to be published in 1999.

Environmental effect

Joint OECD-publication on environmental activities in Russia and their effect thereof.

Grant

DKK 692,500

Total costs

DKK 692,500

Name of project

Training Programme in Smolensk

File no.

124/034-0092

Project recipient

Smolensk Regional Environmental Committee

Project manager

Rambųll

Project description

An earlier project on hazardous waste and cleaner technology in the region uncovered a need for training of environmental authorities as well as industry in these topics. The project includes training, supervision of the train-the-trainer part and two years of ad-hoc supervision.

Environmental effect

Improved basis of the management of waste by authorities and industry, and introduction of cleaner technology.

Grant

DKK 2,450,400

Total costs

DKK 2,450,400

Name of project

Public Relations Department of Vodokanal, St. Petersburg

File no.

124/034-0093

Project recipient

Vodokanal, St. Petersburg

Project manager

Carl Bro International A/S

Project description

Establishment/extension of Vodokanal’s PR department with training of personnel. An information strategy will be prepared in order to improve the dialogue between Vodokanal and the citizens of the town in such a way as to strengthen the general perception of the necessity to take environmental considerations and to minimise the currently very high consumption of water per capita.

Environmental effect

Capacity building in Vodokanal and creation of “public awareness”.

Grant

DKK 3,150,000

Total costs

DKK 3,150,000

Name of project

Leakage Detection Programme, St. Petersburg

File no.

124/034-0094

Project recipient

Vodokanal, St. Petersburg

Project manager

Krüger International Consult

Project description

The project will focus on strengthening capacity building in Vodokanal, St. Petersburg, in connection with leakage detection in the main pipeline network system for drinking water. The project includes an evaluation of the piping system, leakage measuring and detection, piping renovation and finally a training programme.

Vasilievsky Island in St. Petersburg has been selected as a pilot area. The project includes a major supply of equipment.

Environmental effect

Reduced water loss through preventive measures in case of leakage in the pipeline network.

Grant

DKK 7,500,000

Total costs

DKK 13,400,000 (approx.)

Name of project

Emergency Renovation of Damaged Sewer Networks in
St. Petersburg

File no.

124/034-0096

Project recipient

Vodokanal, St. Petersburg

Project manager

Per Aarsleff A/S

Project description

The project is a continuation of projects assisted earlier for renovation of sewers by means of the no-dig method in the old part of St. Petersburg. On the basis of projects implemented before, Vodokanal St. Petersburg has calculated with renovation of 50 km of sewer conduits per year. This work has come to a halt, however, because of the economic crisis in Russia, and for this reason, by way of exception, additional funds were made available for this sector under the DESF Facility.The grant should also be seen in the light of the possibility of keeping the personnel who have been trained in the method.

Environmental effect

Renovation of 1,303 m of sewer conduits and 70 manholes.

Grant

DKK 5,000,856

Total costs

DKK 5,400,000

Name of project

Baltic Eutrofication Regional Network (BERNET) – Planning and Management of Coastal Water Eutrofication in the Baltic Region – Financing for the Kaliningrad Region

File no.

124/034-0100

Project recipient

The State Committee of Environmental Protection of the Kaliningrad Region

Project manager

County of Funen

Project description

The purpose of the project is to establish a network of regional authorities around the Baltic Sea with focus on planning, coastal administration and monitoring of eutrofication problems in the Baltic Sea. As a result of this project, the Kaliningrad Region is able to participate in the network.

Environmental effect

Capacity building in the State Committee for Environmental Protection of the Kaliningrad Region.

Grant

DKK 740,070

Total costs

DKK 9,415,203

Name of project

District Heating Pilot Projects 1998-1999

File no.

124/034-0102

Project recipient

Gusev Municipality

Project manager

Danish Power Consult A/S

Project description

The project comprises the reaping of experience from earlier projects and identification and formulation of new projects in co-operation with the technical administration of the town of Gusev, the district heating supply and the power station at Gusev. Furthermore, a seminar will be held in Denmark for executives within production, distribution and administration.

Environmental effect

Dissemination of experience from earlier projects with a view to replication of projects.

Grant

DKK 1,100,000

Total costs

DKK 1,500,000

Name of project

Fuel-burning Efficiency Optimisation and Reduction of Harmful Pollution at the TEP-22 Power Plant, Moscow, Russia

File no.

124/034-0103

Project recipient

TEP-22, the coal-fired power plant in Moscow

Project manager

Mark & Wedell

Project description

Installation of advanced measuring equipment for the TEP-22 coal-fired power plant located outside Moscow. Equipment will be installed on a unit consisting of three boilers. The equipment comprises automatic equipment permanently mounted onto one boiler and manual equipment on two boilers. The ash-measuring equipment ensures a reduced consumption of coal through better incineration and thus also lower leakage of gases.

Environmental effect

A reduction in leakage of about 115 tonnes of SO₂ per year, 2,800 tonnes of NO_x per year and 37,000 tonnes of CO₂ per year. There will also be a reduced coal consumption of 8,000 tonnes per year.

Grant

DKK 2,000,000

Total costs

DKK 2,180,000

Name of project

Energy Efficiency in Russian Dairies

File no.

124/034-0105

Project recipient

Russian dairies

Project manager

Dansk Energi Analyse A/S

Project description

The purpose of the project is to create awareness and transfer know-how on energy efficiency possibilities and to demonstrate various profitable ways of improving energy efficiency in a dairy and thus in the sector as a whole.

Environmental effect

400 MWt heat, 375 MWt electricity and savings on C0s, SO₂ and NO_x.

Grant

DKK 1,506,000

Total costs

DKK 1,506,000

Name of project

Appraisal of Tenders for the Project “Public Relations Department, of Vodokanal, St. Petersburg”

File no.

120-0061

Project recipient

Vodokanal, St. Petersburg

Project manager

Water and Power Planners A/S

Project description

Implementation of prequalification and call for tenders in connection with the above project.

Environmental effect

Preliminary work for the above project.

Grant

DKK 141,400

Total costs

DKK 141,400

Name of project

Appraisal of tenders for the “Leakage Detection Programme,
St. Petersburg” project

File no.

129-0062

Project recipient

Vodokanal, St. Petersburg

Project manager

Water and Power Planners A/S

Project description

Implementation of prequalification and call for tenders in connection with the above project.

Environmental effect

Preliminary work for the above project.

Grant

DKK 194,935

Total costs

DKK 194,935

Environmental projects in Slovakia

In 1998, approx. DKK 16 m was spent on environmental projects in Slovakia.

In September 1998, general elections were held in Slovakia which left the strongly nationalist government in a minority, so a coalition government was formed instead.

The new government had a different attitude to co-operation with Western Europe and to EU membership. Increased assistance to Slovakia was therefore to be seen as a sign of approval of the democratisation process.

Substantial assistance has been granted within the priority areas of air emission, groundwater and hazardous waste.

Within reduction of air emission, projects have been initiated for the removal of VOC on production of paint, and for the installation of filters for a cement plant.

As far as groundwater is concerned, a preventive project has been initiated for the oil and chemicals area, and an Institutional Strengthening project has been initiated within contaminated soil and groundwater.

In October 1998, the existing contract with DEPA’s local project co-ordinator was extended for a period of two years. The local project co-ordinator is supposed to strengthen co-operation with the Slovak Republic’s Ministry of Environment and assist in identifying new projects and monitoring existing projects.

Five projects with total subsidies of DKK 16 m were initiated, mainly as investment projects.

Name of project

Local Project Co-ordinator, Slovak Republic

File no.

124/037-0025t

Project recipient

The Slovak Republic’s Ministry of Environment

Project manager

DEPA and the local project co-ordinator

Project description

The project is a continuation of the one-year contract of employment with DEPA’s local project co-ordinator in the Slovak Republic. This contract will run for a two-year period.

As mentioned earlier, it is the task of the local project co-ordinator to monitor existing projects and assist in and further develop the bilateral co-operation within the framework of DEFS.

Environmental effect

Institutional strengthening of the Slovak Republic’s Ministry of Environment.

Grant

DKK 490,000

Total costs

DKK 490,000

Name of project

Cement Plant Horné Srnie, Slovakia

File no.

124/037-0026

Project recipient

The Horné Srnie Cement Plant

Project manager

FLS miljų A/S

Project description

The project consists in establishing a plant for incineration of 50,000 tonnes of hazardous waste per year. The project forms part of a major investment project of modernising the cement plant Horné Srnie, e.g. by installing a new rotary kiln with a capacity of 11,000 tonnes per day to replace five old kilns with a capacity of 1,200 tonnes per day. The kiln can be operated with either gas or coal or with a combination of both.

The waste incineration plant will be Slovakia’s first waste incineration plant for hazardous waste. Until now, the waste has been deposited, probably on uncontrolled landfill sites.

In 1992, Slovakia’s total production of hazardous waste was 3.3 m tonnes per year, of which agriculture contributed with 1 m tonnes per year. The food sector contributed with 0.5 m tonnes per year, the health sector with 11,000 tonnes per year and the energy sector with 83,000 tonnes per year.

Environmental effect

3,800 tonnes of CO, 43,000 tonnes of CO2 and 700 tonnes of dust per year. In addition, fuel savings of 17,000 tonnes of coal per year.

Grant

DKK 8,000,000

Total costs

DKK 250,000,000

Name of project

Removal of VOC from Paint Factory

File no.

124/037-0027

Project recipient

Chemolac, Slovakia

Project manager

Haldor Topsųe

Project description

The purpose of the project is to establish a REGENOX plant for catalytic incineration of gases from the production of varnish and paint at the Chemolac factory in Slovakia. The plant will remove about 99% of the solvents which are now being discharged from the factory without treatment.

The project is regarded as a demonstration project, which hopefully will lead to the installation of similar plants in other factories in Slovakia.

DEPA has good experience of similar projects in the Czech Republic, where subsidies for two projects have had the effect that Haldor Topsųr has received orders for another seven plants. All of these plants have been supplied without subsidies.

Environmental effect

400 tonnes of VOC per year. VOCs are solvents.

Grant

DKK 2,596,940

Total costs

DKK 6,800,000

Name of project

Investigation and Clean-up of Polluted Sites in Presov, Slovakia

File no.

124/037-0031

Project recipient

Presov Municipality, various enterprises and institutions

Project manager

Krüger International Consult

Project description

The purpose of the project is to implement general pollution investigations in the town of Presov in North-Eastern Slovakia. The project also includes setting up a priority model, drawing up a detailed prevention strategy at a number of selected localities and implementation of the same.

The Municipality wishes assistance for the drawing up of a strategy for how to prioritise environmental activities, but also for implementing a couple of demonstration projects to serve as a guide to further clean-up work.

The project is implemented in co-operation with local firms and the Municipality.

Environmental effect

Establishing the basis for efforts to cope with groundwater contamination.

Grant

DKK 3,465,000

Total costs

DKK 4,650,000

Environmental projects in Ukraine

In 1998, Danish co-operation with Ukraine was extended substantially compared to the previous years. This year, the main emphasis has been on projects within the water and waste water sector, but assistance has also been provided for projects within district heating, industry and power plants, establishment of environmental funds and biodiversity.

Within the water and waste water sector, there are serious problems in Ukrainian towns of maintaining a 24-hour supply of hygienic drinking water. The main problems are long-term under-investments, the result of which is that practically all plants, including piping and rolling stock have been worn down to such an extent that they cannot or can only barely perform their functions. At the same time, administration and legislation are not sufficiently geared to coping with the changes that have occurred in society after the independence and the dissolution of the Soviet Union. Projects within this sector therefore aim at immediately remedying the worst plant defects through investments and at a more long-term improvement of the ability of the sector to supply good service at the lowest possible price by assisting the authorities in implementing preliminary projects to catalyse international loans.

In the autumn of 1998, Ukraine was elected as host country for the next Pan-European Environmental Ministerial Conference as part of the Environment for Europe process. Partly for this reason, in the period until 2002 when the Conference is held, a number of projects will be initiated in Kyiv to demonstrate the environmental results to be achieved through a combination of national efforts and target-oriented international environmental assistance.

The first project under this initiative is assistance to Kyiv’s water and waste water company in the form of assistance for a major sewer rehabilitation project and the preparation of an extensive general study to prepare the restructuring of the company and a major programme of investing in physical plants.

The other project under this initiative is assistance for the purchase of Danish-produced district heating equipment in connection with the rehabilitation of Kyiv’s district heating system which is to be implemented, financed partly by taking up a loan for USD 200 m with the World Bank to build new power plants, main distribution networks, etc. The purpose of the Danish assistance is to demonstrate the possibilities of effecting energy savings by making the distribution network more efficient.

Danish assistance to help solve the problems of securing the Chernobyl Nuclear Power Station is provided as assistance to the Chernobyl Shelter Fund established under the European Development Bank, EBRD, with a view to securing the scene of the disaster in the long run against future radioactive pollution.

Danish assistance in the nature area is related to planning of coherent support for the protection of the biodiversity in a broad belt along the Black Sea coast of Ukraine, including the Crimea. Activities will range from the establishment of protected natural areas and introduction of less environmentally damaging natural areas and restoration of nature. The project, which is co-financed with the Global Environmental Facility of the UN, will thus also support Ukraine’s fulfillment of international obligations under conventions such as the Biodiversity Convention, the Ramsar Convention and the Bonn Convention.

Name of Project

Chernobyl Shelter Implementation Plan

File no.

124/046-0019

Project recipient

Chernobyl Shelter Fund

Project manager

EBRD

Project description

In connection with the extinction of the reactor fire at Chernobyl in 1986 and the subsequent extinction of the fire, the Soviet Union at that time, hastily and under extreme working conditions, established a concrete shell (the Sarcophagus) over the burnt-out reactor building. The construction was weak and now no longer stable and is threatening to collapse with a renewed radioactive leak as a result. The total costs of establishing a replacement shell and preventing contamination of the site in the long term have been estimated at USD 750 m, of which Denmark has undertaken to contribute with ECU 2.5 m distributed over three years. Denmark follows the project through participation in the Fund’s Council.

Environmental effect

The project aims at the long-term removal of the danger of radioactive contamination from the site.

Grant

DKK 6,750,000 in 1998

Total costs

USD 750,000,000

Name of project

Strengthening of Environmental Funds in Ukraine

File no.

124/046-0021

Project recipient

Ukraine

Project manager

COWI

Project description

The purpose of the project is to contribute to strengthening the Ukrainian environmental funds at national and regional levels. The overall purpose is to contribute to increasing Ukraine’s potential to finance environmental projects. Among the results of the project are a review of fund legislation and administration, preparation and implementation of best practice guides and proposals for improving the fund system. The project is based on the experience of a corresponding Russian environmental fund project.

Environmental effect

Greater efficiency in the use of the scarce environmental funds of Ukraine.

Grant

DKK 1,472,230

Total costs

DKK 1,472,230

Name of project

Call for Tenders for the Zaparizhzhia Water Utility Development and Investment Project

File no.

124/046-0022

Project recipient

Zaparizhzhia town

Project manager

Nordic Consulting Group

Project description

In connection with the implementation of an EBRD-loan of USD 40 m for the building of a new water treatment plant and rehabilitation of the water supply and waste water network, the purpose of the project is, on the basis of a Dutch/Canadian feasibility study, to prepare Terms of Reference for supporting two components in the implementation of the investment project in Zaparizhzhia (pop. 900,000). The two components consist in supporting the setting up of a locally managed Project Implementation Unit to manage the total investment of approx. DKK 250 m) and supporting the establishment of a monitoring network, etc. for the water supply. Tenders for the project will subsequently be invited.

Environmental effect

Support for the implementation of a major project.

Grant

DKK 409,152

Total costs

DKK 409,152

Name of project

Biodiversity in the Azov-Black Sea Environmental Corridor

File no.

124/046-0023

Project recipient

Ministry for Environment Protection and Nuclear Safety of Ukraine

Project manager

COWI A/S

Project description

The purpose of the project is to draw up a coherent plan for assistance under the Global Environment Facility for the protection of the biodiversity in a broad belt along Ukraine’s Black Sea coast, including the Crimea. These activities will range from establishing protected natural areas, introducing less environmentally damaging agricultural activities (including ceasing to grow rice because of the water consumption and leaching of salts). In the Danish-financed part of the project, project documents will be drawn up for three projects: 1) Use of market mechanisms (e.g. ceasing to subsidise uneconomical and environmentally damaging agricultural activities) in the whole project area in order to promote more environmentally friendly agriculture; 2) Introduction of alternative crops that do not require irrigation in a traditional rice-cultivation area and 3) restoration of natural steppelands, including the setting-up of a nursery for indigenous tree species. The part of the project concerning the Crimea is closely related to the assisted project concerning water resource management, water supply and waste water removal in the Crimea, as e.g. irrigation problems and leakages from the large water pipe on the northern side of the Crimea have a major impact on the biodiversity in the area.

Environmental effect

Preparation of a major project for the protection of biodiversity in a broad belt in southern Ukraine of great local and international importance as an eating and resting place for migratory birds from the north-south migration route from Africa/Asia to North Europe and from the East-West migration route from Asia to Southern and Northern Europe. Of special importance is the Sivash area between the Crimea and the mainland, which is one of the world’s four ultrasaline areas and makes up a unique ecosystem.

Grant

DKK 1,150,000

Total costs

DKK 2,900,000

Name of project

Flue gas Purification at the Avdeevka Coke Chemicals Plant

File no.

124/046-0026

Project recipient

Avdeevka Coke Chemicals Plant

Project manager

Haldor Topsųe A/S

Project description

The purpose of the project is to establish more efficient utilisation/purification of the discharge gas from coking of coal through installation of a Haldor Topsųe WSA plant purifying the smoke of SO₂ under production of sulphuric acid, which is sold directly or converted into ammonium sulphate fertiliser.

Environmental effect

Reduction of the emissions per year by 3,097 tonnes of SO₂ and 39 tonnes of H₂SO₄ (sulphuric acid) and elimination of waste water from the former flue gas purification process.

Grant

DKK 4,000,000

Total costs

DKK 45,000,000

Name of project

Consultant Services for the Organisation of a Sub-regional PPC Meeting for Ukraine and Moscow

File no.

124/046-0028

Project recipient

National environmental authorities in Ukraine and Moldova

Project manager

COWI A/S

Project description

In order to improve the quality of the sub-regional Project Preparation Committee meetings, Danish consultants assisted in organising and implementing a meeting in co-operation with the environmental authorities in the countries.

Environmental effect

No direct effect.

Grant

DKK 441,235

Total costs

DKK 441,235

Name of project

Demoproject Kyiv in Ukraine

File no.

124/046-0029

Project recipient

Kyiv Vodokanal (Technical Administration of Kyiv)

Project manager

Per Aarsleff A/S

Project description

The purpose of the project is to renovate a 6 km long main sewer conduit conducting the waste water for a population of about 500,000 in the central part of Kyiv. The conduit is close to collapsing today, and a surface emergency conduit has therefore been established along half of the stretch. Moreover, it is the purpose of the project to instruct the employees of Kyiv Vodokanal in the no-dig method by means of a training programme. The project furthermore comprises the supply of the equipment necessary to implement similar repair work to the remainder of the sewerage system of Kyiv. Co-financing the project are the Finnish ministry of environment and Kyiv Vodokanal.

Environmental effect

Ensuring removal of waste water for a population of 500,000 in a way that safeguards both health and environment. Relining of a 6 km long main sewer conduit.

Grant

DKK 9,760,000

Total costs

DKK 92,000,000

Name of project

TA Programme, Yalta and Sevastopol, the Crimea

File no.

124/046-0031

Project recipient

Yalta and Sevastopol Vodokanals (technical administrations)

Project manager

Per Aarsleff A/S

Project description

On the basis of the supply of equipment for repairing and maintaining water and waste water pipes effected in 1997 (file no. 124/046-0001, 1997), the purpose of the project is to train the technical administrations of the two towns in establishing a preventive maintenance programme for the water supply and sewerage system and to deliver equipment for TV-monitoring and various pumping equipment for pumping during repairs.

Environmental effect

Measures to prevent direct discharge of waste water into the ocean or pollution of nearby (leaky) water pipes in case of pipe ruptures; measures to prevent loss of drinking water in case of pipe ruptures; energy saving through better maintenance of pump stations, etc.

Grant

DKK 2,088,420

Total costs

DKK 2,088,420

Name of project

Fuel Burning Efficiency Optimisation and Reduction of Harmful Pollution at Trypilla Power Plant, Kiev, Ukraine

File no.

124/046-0032

Project recipient

Trypilla Power Plant

Project manager

Mark & Wedell

Project description

The project comprises installation of advanced measuring equipment at the Trypilla Power Plant located near Kiev in Ukraine. Equipment will be mounted on all units of the power station. The equipment comprises fixed automatic equipment mounted on one boiler and manual equipment on two boilers. The ash-measuring equipment ensures a reduced consumption of coal through better incineration and thus also decline in leakage of gases. Furthermore, an action plan will be drawn up for the use of the fly ash.

Environmental effect

A reduced leakage of about 1,200 tonnes of SO₂ per year, 4,100 tonnes of NO_x per year and 150,000 tonnes of CO₂ per year. Furthermore, the coal consumption will be reduced by 60,000 tonnes per year.

Grant

DKK 4,500,000

Total costs

DKK 5,130,000

Name of project

Identification Study on Renewal and Modernisation of Kyiv Vodokanal

File no.

124/046-0033

Project recipient

Kyiv Vodokanal (technical administration)

Project manager

Nordic Consulting Group

Project description

The purpose of the project is, in co-operation with Kyiv Vodokanal, to prepare a long-term strategy for a radical modernisation of Kyiv Vodokanal with a view to increasing the level of the services offered to the citizens within water supply and waste water. The project is intended to conclude in the drawing up of a project document for a feasibility study for this modernisation and – after pre-appraisal of the project document – an invitation for tenders the project. As part of the project, long-term objectives will be elaborated for KV within management, service, water supply, pollution of the river Dnjerpr, privatisation, short- and long-term investment needs, financing, etc. in support of Vodokanal’s ambition of creating a public service company of a high international level.

Environmental effect

Strategy for modernising water supply and waste water administration.

Grant

DKK 1,951,250

Total costs

DKK 1,951,250

Name of project

Zaparizhzhia Water Utility Development and Investment

Project I

File no.

124/046-0035

Project recipient

Zaparizhzhia Vodokanal

Project manager

Krüger International A/S

Project description

The purpose of the project is to support Zaparizhzhia Vodokanal (pop. 900,000) in their general efforts to limit the loss of water in the water supply system through 1) establishing monitoring of the distribution within the water supply system through technical assistance and provision of equipment, including equipment for remote monitoring of the water main system; 2) supply of and training in the use of transportable water gauges for water mains to be used in campaigns against establishing illegal water connections to the mains; 3) establishing a GIS-system covering the town’s technical supply network, which through joint use by the electricity, telephone, gas, water and sewerage utilities can ensure the provision of quick digging permits in case of ruptures, so as to improve the supply reliability and reduce the amount of water waste substantially. The techniques introduced are to be inspected during a study tour to Denmark.

Environmental effect

Water and energy savings to be calculated in connection with the investment project.

Grant

DKK 4,300,000

Total costs

DKK 250,000,000

Name of project

Zaparizhzhia Water Utility Development and Investment

Project II

File no.

124/046-0036

Project recipient

Zaparizhzhia Vodokanal

Project manager

Krüger International A/S

Project description

In connection with the investment plan (waste water treatment, sludge processing, sewer rehabilitation, water supply and administration) to be implemented on taking up an EBRD loan of about USD 30 m, the Vodokanal is to establish a Project Implementation Unit (PIU) to be in charge of co-ordinating the project, including the co-ordination of a large number of inputs from local and foreign consultants and contractors and inviting tenders for a number of major projects. The purpose of the project is to assist the Vodokanal in establishing this PIU, including the routines connected with an invitation of tenders (pre-qualification, call for tenders, awarding of contracts, etc.), training of personnel, setting-up of accounting functions, quality assurance and reporting on the progress made by the investment project.

Environmental effect

Technical assistance as part of a major project.

Grant

DKK 2,500,000

Total costs

DKK 2,500,000

Name of project

Kyiv District Heating Rehabilitation

File no.

124/046-0038

Project recipient

Kyiv Energo

Project manager

Carl Bro as Energy

Project description

As part of the implementation of a World Bank loan of USD 200 m to Kyiv Energo for establishing power stations and renewing the main transmission network, assistance is provided towards rehabilitating selected parts of Kyiv’s worn-down district heating system in the distribution network. Assistance will be concentrated on supplying equipment for replacing 14 sub-stations to increase the environmental and energy efficiency in the district heating supply.

Environmental effect

To be calculated in connection with the reporting on the project.

Grant

DKK 9,998,222

Total costs

DKK 11,200,000

Other Environmental Projects

Name of project

Database for DESF

File no.

124/000-0004

Project recipient

Danish Environmental Agency

Project manager

Mogens Nielsen, Consulting Engineer

Project description

The project is a continuation of initiatives implemented before for establishing a database of results, containing final reports for all projects under DESF.

Environmental effect

Not relevant.

Grant

DKK 489,063

Name of project

Supplement to “Phase-out of Leaded Petrol in Europe”

File no.

124/000-0006t

Project recipient

Various countries

Project manager

COWI and DTI

Project description

The project supplement covered mainly translation of the main report and of the regional car fleet study into Russian, sending out reports to participants in the Aarhus Conference, DTI’s participation in a workshop in Kazakhstan on phase-out of leaded petrol and ad hoc assistance on a limited scale up until the Aarhus Conference.

Environmental effect

Increased accessibility of know-how.

Grant

DKK 262,500

Total costs

DKK 262,500

Name of project

Baltic Sea State Sub-Regional Conference 1998

File no.

124/000-0008

Project recipient

Regional authorities in the Baltic Sea Region

Project manager

County of Storstrųm

Project description

Support for holding the above conference on e.g. protection and administration of nature.

Environmental effect

Sharing of experience and building of networks between administrations.

Grant

DKK 100,000

Total costs

DKK 100,000

Name of project

Assessment of Danish Environmental Assistance to Eastern Europe 1991-1996

File no.

124/000-0016t

Project manager

Mikael Skou Andersen, Århus University, in co-operation with PLS Consult and KPMG C. Jespersen

Project description

The supplement comprised a residual grant for KPMG C. Jespersen from 1997 and an expansion of the project including: 1) Supplementary assessment of six tender projects recommended under the 1996-framework, but not contracted until 1997, 2) CD-ROM and web-site production of the 47 selected project cases and 3) coverage of extraordinary travelling expenses for PLS Consult in connection with the assessment.

Environmental effect

Basis of more efficient environmental assistance.

Grant

DKK 1,292,800 (distributed with DKK 778,500 as residual grant for KPMG C. Jespersen from 1997 and DKK 514,300 as supplementary grant for PLS Consult).

Total costs

DKK 1,292,800

Name of project

National Environmental and Health Action Plan (NEHAP) in the Czech Republic, Estonia, Lithuania, Poland and the Slovak Republic

File no.

124/000-0023

Project recipient

Ministries of environment and health in the Czech Republic, Estonia, Lithuania, Poland and the Slovak Republic

Project manager

World Health Organization

Project description

The project concerns the drawing up of national environmental and health action plans for the five countries, including the elaboration of a number of concrete project proposals within the most highly prioritised environmental areas of importance to public health. The project is implemented to assist the countries in fulfilling their obligations to draw up such plans in accordance with the agreements reached at the “Second Ministerial Conference on Environment and Health”, which took place in Helsinki in 1994. Earlier, the DESF has supported a pilot project with the same purpose in Latvia and Hungary.

Environmental effect

The purpose of the project is to include public health considerations in environmental planning in the five countries, and the project includes the preparation in each of the countries of ten major environmental projects of importance to public health.

Grant

DKK 7,000,000

Total costs

DKK 15,500,000

Name of project

Contribution to the Nordic Environment Finance Corporation (NEFCO)

File no.

124/000-0033 and 124/000-0053

Project recipient

Eastern Europe in general

Project manager

NEFCO

Project description

This grant is Denmark’s contribution to NEFCO, which implements joint ventures between Nordic and Eastern European enterprises in the environmental area. Financing is provided in the form of capital investments in firm constellations or loans for projects. The Danish contribution to the original capital amounts to about DKK 12.1 m, while a contribution of about DKK 6.2 m is made to a special soft loan facility under NEFCO.

Environmental effect

To be calculated within the framework of NEFCO.

Grant

DKK 18,315,474

Total costs

DKK 18,315,474

Name of project

Building the Conservation Capacity of a Network of Bird Conservation NGOs in Baltic Sea Countries

File no.

124/000-0047

Project recipient

DOF’s sister organisations in Poland, Lithuania, Latvia, Estonia and the Kaliningrad and St. Petersburg Regions

Project manager

DOF-Birdlife

Project description

The project comprises assistance from DOF (part of “Birdlife International”) to sister organisations in Poland, Lithuania, Latvia, Estonia and the Kaliningrad and St. Petersburg Regions to build new efficient nature conservation organisations to collect information about areas of special importance to bird life that can be used in connection with the HELCOM-work, etc.

Environmental effect

Increased nature conservation of a number of natural areas in all countries/regions. Improved possibilities of ratifying/implementing the Ramsar, Bonn and Biodiversity Conventions and preparation the EU Bird Conservation Directive.

Grant

DKK 3,413,900

Total costs

DKK 3,413,900

Name of project

Information about the Co-operation between Bulgaria and Denmark

File no.

124/000-0048

Project recipient

Bulgaria

Project manager

Morten Crone Nielsen

Project description

Two Danish journalists have visited several Danish-supported environmental projects in Bulgaria. On the basis of these visits, two articles have been written for Miljų-Danmark.

Environmental effect

Information about environmental work in Bulgaria.

Grant

DKK 12,000

Total costs

DKK 12,000

Name of project

Technical Support on Identification and Preparation of Approximation-related Projects in Eastern and Central European Countries

File no.

124/000-0055

Project recipient

Countries applying for EU accession, primarily the ministries of environment in the recipient countries as competent authorities for the implementation of EU environmental law.

Project manager

Milieu Environmental Law Consultancy Ltd.

Project description

Project identification and project preparation (holding of project-identification missions and subsequent preparation of TORs/project documents) for projects with special focus on EU approximation and institutional strengthening.

Environmental effect

The project contributes to the transposition and practical implementation of EU law in countries applying for EU accession.

Grant

DKK 962,600

Total costs

DKK 962,600

Name of project

Further Education of Eastern European Environmental Journalists

File no.

124/000-0056

Project recipient

Various countries

Project manager

Den Journalistiske Efteruddannelse (DJE)

Project description

Thirty five environmental journalists from Eastern and Central Europe and the former Soviet Republics participated in a seminar for journalists in connection with the Århus Conference. The purpose of the seminar was to emphasise the importance of environmental journalism to the development of the region, strengthen the participants’ professional knowledge of environmental issues, introduce them to relevant official and NGO-sources of international and regional environmental information and give them the possibility of discussing the goals and means of environmental journalism with colleagues from Western Europe.

Environmental effect

Improved communication about environmental knowledge.

Grant

DKK 1,480,200

Total costs

DKK 1,480,200

Name of project

Economic Instruments for Environmental Protection – The Danish Experience

File no.

124/000-0057

Project recipient

Recipient countries

Project manager

COWI

Project description

A publication is being produced about economic control instruments used in the environmental area in Denmark. The publication is written in English and translated into Russian and Danish. Besides providing a written account of the Danish experience, the purpose of the publication is to give Eastern European decision-takers and administrators in the environmental area updated and thorough knowledge of the use of economic control instruments in the environmental area in Denmark.

Environmental effect

Dissemination of know-how about economic control instruments.

Grant

DKK 752,000

Total costs

DKK 752,000

Name of project

Environmental Co-operation in the Baltic Sea Region

File no.

124/000-0063

Project recipient

The Baltic Sea region

Project manager

Carl Bro as

Project description

The purpose of the project is to implement an overview analysis of the international environmental agreements, conventions, etc., including EU Directives, which the Baltic Sea countries have committed themselves to. Furthermore, the project contains a description of the environmental regulation regime in the Baltic Sea region and a description of current environmental problems at regional and global levels and the possibility of finding other co-operation structures for solving environmental problems in the region.

Environmental effect

Overview of environmental work in the Baltic Sea region.

Grant

DKK 730,000

Total costs

DKK 730,000

Name of project

The OECD Task Force Secretariat’s Implementation of Activities in Continuation of the Århus Conference (expansion of the NIS-area)

File no.

124/000-0064

Project recipient

OECD Task Force

Project manager

OECD Task Force

Project description

At the Århus Conference in the summer of 1998, it was decided that the OECD Task Force should focus increasingly on the NIS. Furthermore, it was decided to focus the tasks of the Task Force on the implementation of the countries’ environmental action plans, strengthening of the financing possibilities and increased focus on environmental considerations in private enterprises. To solve these tasks, funds for operating the Secretariat were granted.

Environmental effect

Support for drawing up environmental action plans, etc.

Grant

DKK 3,500,000

Total costs

DKK 3,500,000

Name of project

Institutional Strengthening – PPC-Officer

File no.

124/000-0065

Project recipient

Eastern Europe in general

Project manager

EBRD

Project description

The Project Preparation Committee Secretariat (PPC) was set up at the Environmental Ministerial Conference in 1993. The purpose of the PPC is to co-ordinate project work between bi-lateral and multi-lateral donors and the international banks and promote the interaction between donations and loans. The Secretariat is partly donor-financed, and this project consists in the Danish contribution for 1998-99. The Danish assistance is in the form of a “PPC-officer”, whose task it is to contribute to finding finance for the projects.

Environmental effect

A number of environmental projects financed by means of EBRD-funds.

Grant

DKK 4,620,000

Total costs

DKK 4,620,000

Name of project

Improvement of the Green Debate in Eastern and Central Europe

File no.

124/000-0067

Project recipient

NGOs in the recipient countries

Project manager

None

Project description

The project has been initiated with a view to training NGO’s in Eastern Europe (from eight countries, including Kaliningrad and St. Petersburg) to participate actively in and influence the green debate and the decision-making processes in their respective countries. A number of seminars will be held in both Denmark and the Eastern European countries, where the main content will be the basic ideas of the Danish Folk High School on environment, democracy and debate. As a result of the project, a minimum of 50 NGOs from Eastern Europe will be familiar with the fundamental ideas of the Danish Folk High School, ie developing democratic skills, including human rights, etc. Another result of the project will be the creation of a network of 100 NGOs in each country working seriously with ten environmental issues.

Environmental effect

Training of 50 NGOs in the environmental area.

Grant

DKK 2,717,915

Total costs

DKK 2,717,915

Name of project

Project Cycle Management Manual for DANCEE

File no.

124/000-0070

Project recipient

Ministries of environment in the recipient countries and in Denmark, donors, IFIs, Danish and foreign project holders

Project manager

Danish Cooperation for Environment in Eastern Europe (DANCEE)/Carl Bro as

Project description

The manual is a guide to implementing projects from project idea to completed project to evaluation. The manual describes projects according to the tender model as well as the application model. The manual is divided into four phases: project preparation, contracts, subsidies and project implementation and evaluation. The manual contains a number of standard forms of project idea, project document, various reports, etc., which the project holder needs to implement a project.

Environmental effect

More efficient environmental support scheme.

Grant

DKK 406,375

Total costs

DKK 406,375

Name of project

Harmonised System for Port State Control in the Black Sea Region

File no.

129-0101

Project recipients

The six Black Sea countries

Project manager

Portconsult

Project description

The project consists in preparing a project document for drawing up a plan and proposal for a harmonised system of control measures in the ports in the Black Sea Region. The project document contains approval of the implementation plan by the six Black Sea countries.

Environmental effect

Plan for better control measures for pollution in the ports in the Black Sea region.

Grant

DKK 1,120,000

Total costs

DKK 1,420,000

Environmental Projects in Montenegro

Name of project

Mission to Montenegro with the Ministry of Foreign Affairs

File no.

124/019-0001

Project recipient

Ministry of Environment in Montenegro

Project manager

COWI

Project description

The project comprises a mission to Montenegro with participants from DEPA and the Ministry of Foreign Affairs and a consultant from COWI. The purpose of the mission is to prepare a report which describes environmental conditions in the country and can be used to present the environmental problems in Montenegro to international organisations and financial institutions.

Environmental effect

No direct environmental effect.

Grant

DKK 157,125

Total costs

DKK 157,125

Environmental Projects in Croatia

Name of project

MEIP 1. Phase 1 of the Technical Assistance for Implementation Support and Financial and Operational Performance Improvement of Municipal Utilities in Croatia

File no.

124/022-0022

Project recipient

Pula and Split municipalities

Project manager

COWI

Project description

The project concerns TA for the Project Implementation Unit (PIU) established for implementation of the Municipal Environmental Infrastructure Programme by preparing standard documents, tender material, procurement, progress report, monitoring, etc. to ensure that all of these activities are in accordance with the rules of EBRD.

Environmental effect

No direct effect.

Grant

DKK 2,622,513

Total costs

DKK 2,622,513

Environmental projects in Moldova

Name of project

Chisinau Water Services Rehabilitation Project – Phase 2

File no.

124/028-0003

Project recipient

Moldova and Chisinau town

Project manager

Rambųll/Krüger Joint Venture

Project description

The project is a continuation of a preliminary project financed under DESF. The project consists in assistance to the Moldovan authorities in connection with calls for tenders, appraisal, awarding of contracts and implementation of the individual components identified in the preliminary project and to be financed partly by means of an EBRD-loan. The largest single component of the project is rehabilitation of a great part of the steel piping in the town. Denmark finances separately a component concerning investigation of industrial discharges.

Environmental effect

Expected energy saving of about 80 m kWh and an expected net CO₂ reduction of 68 tonnes per year.

Grant

DKK 10,515,835

Total costs

DKK 414,000,000

Annex 1: Advisory Committee

Members of the Advisory Committee to the Danish Environmental Support Fund for Eastern Europe

Chairman	Erik Hoffmeyer, former Governor of the Danish Central Bank
The Economic Council of the Labour Movement	Arne Skov Andersen, MA (administration)
Danish Society for the Conservation of Nature	Lone Johnsen, Director
Confederation of Danish Industries	Jens Berthelsen, Head of Section
Danish Agency for Development of Industry and Trade	Mette Holst, Head of Division
Danish Association of Consulting Engineers	John Cederberg, Director General
The Outdoor Council	Jane Lund Henriksen, Vice-chairman
The Danish Chamber of Commerce	Mette Herget, MSc (pharmacology)
The Danish Ministry of Foreign Affairs	Henrik Skouenborg, Special Adviser
National Environmental Research Institute	Peter Kofoed Bjųrnsen, Deputy Director
Danish Energy Agency	Morten Palle Hansen, Head of Division
Danish Environmental Protection Agency	Karsten Skov, Deputy Director General
Provision of secretariat services to the Committee:
Danish Environmental Protection Agency	Palle Lindgaard-Jųrgensen, Head of Division

Annex 2: The Aarhus Declaration

Declaration

by the Environment Ministers of the region of the United Nations Economic Commission for Europe (UN/ECE)

Fourth Ministerial Conference, “Environment For Europe”, Aarhus, Denmark, 23 – 25 June 1998

A. Preamble

We, the Environment Ministers and Heads of delegations from 52 countries in the UN/ECE region and the representative of the European Commission, met at Aarhus, Denmark, from 23 to 25 June 1998, in the fourth of a series of Ministerial Conferences held as part of the “Environment for Europe” process.
We reaffirm our strong commitment, developed at the three previous Ministerial Conferences in Dobris (1991), Lucerne (1993) and Sofia (1995), to cooperate on environmental protection in the ECE region. We promise to satisfy the obligations arising from the Declarations made at those three Conferences. In particular, we declare that further integration of environmental considerations into policies in all sectors is of critical importance to the improvement of the environment. We welcome the active participation of the NGO community as well as the business community and the trade unions at the Conference. We also recognise the political importance of the “Environment for Europe” process as the major long-term pan-European political framework for the promotion of environmentally sound and sustainable development.
We welcome the recovery of peace in areas formerly affected by armed conflicts, which opens the way to environmental improvement in those areas. We call upon States where such conflicts continue to re-establish and strengthen peace.
Bearing in mind that the EU enlargement will create new challenges both for the economy and for the environment, the enlargement can provide a powerful stimulus for environmental improvement in the applicant countries. There is no similar development in other CEE countries or in the Newly Independent States (NIS). Many of these countries still face severe environmental problems. The “Environment for Europe” process should therefore focus more of its resources on these countries in order to promote a convergence in environmental policies and conditions within the European region, as a step towards sustainable development.
We recognise the importance of regional, subregional and bilateral environmental cooperation in the UN/ECE region. In this connection we welcome the Joint Statement of the Ministers of Environment of the Central Asian Region (Almaty, 22 April 1998) and their commitment to mutual cooperation and support their decision to prepare and implement the Regional Environmental Action Plan within the “Environment for Europe” process. We also welcome and support the adoption of the Baltic Agenda 21 on 3 June 1998 in Nyborg (Denmark), which will play a major role in the Baltic Sea region.

B. The ECE region and The Global Environment

We recognise that many of the environmental problems of the world have their origin in the UN/ECE region and we reaffirm the special responsibilities of the UN/ECE countries in contributing to solving these problems and our aspiration towards a global leadership role for the UN/ECE countries in pursuing sustainable development. We welcome and are grateful for the support of international organisations.
We commit ourselves to complying with the obligations arising from those environmental conventions to which we are Parties. Furthermore, we note with great concern that some UN/ECE States are not Parties to a number of relevant environmental conventions and other legal instruments, and we urge these States to take all appropriate steps to become Parties to those instruments as soon as possible.
In order further to contribute to the global pursuit of sustainable development, we continue to support the work of the United Nations Environment Programme (UNEP) and other relevant global organisations and conventions.
We need strong, efficient and effective compliance regimes backing the legally binding commitments arising from multilateral environmental agreements (MEAs). It is important that procedures and mechanisms, entailing binding consequences, where appropriate, for Parties in non-compliance are further elaborated. We will provide full support for broader participation in and effective implementation of the existing MEAs and their mechanisms for exchanging information and achieving compliance.
We stress the importance of international cooperation in a non-confrontational and supportive fashion to strengthen the enforcement of national environmental law. In this respect we welcome the establishment of informal, cooperative networks of environmental inspectors in the UN/ECE region, such as the European Union Network for the Implementation and Enforcement of Environmental Law – Accession Countries (IMPEL-AC) and a network for environmental inspectors in the region of central and eastern Europe and Central Asia.
We emphasise that the objectives and obligations of MEAs should not be hampered by other international agreements, and the need to ensure that the WTO rules, provisions and procedures take full account of the need to promote a high level of environmental protection. In particular, the multilateral trading system should, under clear and predictable rules, accommodate the use of trade measures taken in the framework of MEAs.^[4] We will promote efforts to ensure that environmental concerns are effectively integrated into the international investment agreements such as the proposed multilateral agreement on investment in a way that supports sustainable development, and so as not to limit the capacity to make and implement national and international environmental policies.
Climate change remains the greatest global environmental threat to the world´s sustainable development, public health and future prosperity. The Kyoto Protocol was a historic turning point and it is essential that we now translate the promise of Kyoto into reality. In this context we are aware of our responsibility to take the lead in combating climate change. Domestically, our nations undertake to pursue immediately significant reductions in greenhouse gas emissions. We firmly believe that these reductions can be achieved cost-effectively and deliver present and future improvements in the quality of life. Internationally we must maintain the momentum by making progress at the fourth Conference of the Parties to the United Nations Framework Convention on Climate Change at Buenos Aires on the outstanding issues left by Kyoto. Flexible mechanisms such as international emissions trading, joint implementation and clean development mechanism shall be supplemental to domestic actions. They can play an essential role in achieving our commitments cost-effectively. Defining the relevant principles, modalities, rules and guidelines to ensure that these mechanisms provide real environmental benefit is a priority. It is important that these flexibilities, in particular trading, should help us to achieve greater overall abatement of greenhouse gases than would otherwise occur. The rules must ensure an enforceable, accountable, verifiable, open and transparent trading system. Work on the treatment of carbon sinks should be continued. We welcome the recent signature of the Kyoto Protocol by some of us and confirm the intention of the rest of us to sign it within the next year. We need a strong, efficient and effective compliance regime backing the legally binding commitments under the Protocol.^[^5]
In view of the continuing grave concern about unsafe nuclear installations, we reaffirm our pledge to phase them out as soon as possible.^[6] We acknowledge the need to solve the problems connected to the decommissioning of nuclear reactors and power plants, the management of nuclear waste and operational safety. In this regard we take note of the adoption of the Joint Convention on the Safety of Spent Fuel Management and on the Safety of Radioactive Waste Management, and we urge all States that have not already done so to take all appropriate steps to become parties to that Convention and to the Convention on Nuclear Safety.We also reaffirm the need for an appropriate international liability regime for the compensation of damage caused by nuclear installations, noting the recent efforts of the international community to improve liability regimes.
We recall the concerns expressed by many States about the risks of environmental and health damage involved in nuclear arms testing and urge all States that have not yet done so to sign and ratify the Comprehensive Nuclear-Test-Ban Treaty.
We note the increasing transboundary movement of living modified organisms. Accordingly, there is a growing need to address safety issues and we are firmly committed to finalising the negotiation of a Biosafety Protocol, based on scientific risk assessment and the precautionary principle, to the Convention on Biological Diversity, by February 1999.

The State of The European Environment

We welcome the report Europe’s Environment: The Second Assessment requested at our last meeting in Sofia in September 1995 and published recently by the European Environment Agency (EEA). Although some pressures have been reduced, this has not generally led to an improvement in the state or quality of the environment of Europe. We are therefore required to take further action, in particular in the following fields:

Transport, where governmental policies are failing to keep pace with the growth in traffic, which is adding to the problems of air pollution, climate change, noise, congestion and biodiversity/habitat loss. We are determined to secure a sustainable and environmentally sound pattern of transport and to promote the use of public transport, transport by sea, rail, and non-motorised transport. Economic instruments should be used as a way of reducing transport volumes while reflecting environmental costs in transport prices, especially for freight transport;

	Agriculture, where much more needs to be done better to reconcile environmental concerns with agricultural practices, e.g. by further developing the rules of good agricultural practice, by encouraging environmentally friendly agricultural production techniques, by making agricultural support payments reflect environmental protection, and by implementing policies designed to neutralise the environmental impact of intensive animal production systems;
	Energy, where new efforts are needed to ensure that the available international instruments are implemented fully at the national level, particularly in the fields of energy conservation and the promotion and sustainable use of renewable energy resources;
	Chemicals, where further evaluation of hazards and exposures and their impacts on human health and the environment is needed. Such evaluations should be based on scientific evaluation, including risk assessment, and decisions should respect the precautionary principle;
	Surface, subterranean, coastal and marine waters, where threats to these waters remain in spite of the fact that many efforts have been made. Improved action therefore needs to be taken towards the progressive reduction of pollutants (incl. ½ heavy metals and anthropogenic chemicals) and by reducing inputs from nutrient sources;
	Soil degradation, where serious problems continue and too little progress has been made in soil conservation and remediation of contaminated sites. Further work is needed on prevention strategies for desertification;
	Biodiversity, where the overall pressures continue to increase and the need for the actions mentioned under the Pan-European Biological and Landscape Diversity Strategy section is particular urgent.

We recognise that Europe’s Environment: The Second Assessment does not cover Central Asia. In this connection we welcome the report “Central Asia: Environment Assessment” prepared by the countries in this region.
We recognise that mechanisms for coordinated monitoring, data collection, processing and management in the European region are still inadequate. In the future we should give high priority to improving these mechanisms as well as the state of environmental information to support decision-making and to improve the availability of reliable environmental information to the public. With this in mind, we call for closer cooperation between all governments, organisations and existing information and observation networks. We welcome the initiative of the Russian Federation to convene a special meeting during the first half of 1999 in Moscow with a view to strengthening the cooperation in this field. Future work in this area should take fully into account the work of existing networks and fora, in particular the European Environment Agency.

C. Implementation of The Environmental Programme for Europe

Environmental impact assessment (EIA) procedures are important means for integrating environmental concerns into development projects and for providing access to information and public participation. We welcome the recent entry into force of the Espoo Convention on Environmental Impact Assessment in a Transboundary Con- text. We urge the countries of the UN/ECE region to take all appropriate steps to become Parties to the Convention and implement it. We also note the progress made in the introduction of EIA in CEE countries and welcome the Sofia Initiative on EIA led by Croatia.
We recognise that strategic environmental assessment facilitates the systematic analyses of the environmental impacts of proposed policies, plans and programmes and invite countries and international finance institutions to introduce and/or carry out strategic environmental assessments with the appropriate participation of NGOs and citizens. We emphasise that – with a view to the integration of environmental considerations in the decision-making process in other policies – assessments of international sectoral policies, plans and programmes in the UN/ECE region in areas such as transport, energy and agriculture should be undertaken as a matter of priority.
We recognise that changes in consumption and production patterns must lie at the heart of the transition towards a sustainable UN/ECE region; with concern we note that developments in the countries with economies in transition may have the effect of duplicating unsustainable consumption patterns in other parts of the region.

Air Pollution Prevention

We welcome the adoption and signature of the Protocols on Persistent Organic Pollutants (POPs) and on Heavy Metals within the framework of the UN/ECE Convention on Long-Range Transboundary Air Pollution and we urge all Parties to the Convention expeditiously to take all appropriate steps to become Parties to the two Protocols, and voluntarily to take swift steps to implement and comply with the Protocols even before they formally enter into force.
We pledge to work constructively in the forthcoming negotiations on a global convention on POPs.
We intend to reduce our countries’ emissions of lead, cadmium and mercury from a combination of industrial sources, transport, combustion processes and waste disposal and incineration and to be bound by all other obligations arising from the Protocol on Heavy Metals. We note that 32 countries have expressed their readiness in a separate declaration to meet an earlier date for the final phase-out of added lead in petrol for general use by road vehicles than stipulated in the Protocol (a copy of the Declaration is attached).
We strongly support the expeditious completion of a new protocol on nitrogen oxides and related substances to the Convention on Long-Range Transboundary Air Pollution, and we resolve to take the necessary steps to secure the scientific foundation for the effective implementation and the further development of existing cost-effective legal instruments to reduce transboundary air pollution in the UN/ECE region.
We welcome the Declaration of the Executive Body on Long-Range Transboundary Air Pollution, recognising the important role of the Convention in promoting a better environment and improved human health in Europe and North America (a copy of the Declaration as adopted is attached).
We note with satisfaction that the 1991 Protocol on the Emissions of VOC entered into force in September 1997 and that the 1994 Protocol on Further Reduction of Sulphur Emissions will enter into force in early August 1998. We urge the Signatories to the two Protocols that have not yet become Parties to them to do so as soon as possible.

Strategy to phase out leaded petrol

We endorse the proposed strategy to phase out leaded petrol for general use by road vehicles as early as possible and no later than 1 January 2005, acknowledging, however, that four countries have reserved their position on the target date.⁷ We oblige ourselves to work towards the intermediate targets of the strategy and to evaluate their fulfilment at our next Ministerial Conference.
We will continue to endeavour to prevent possible increases in the overall emissions of harmful substances as a result of the lead phase-out.
We welcome and recognise the results of the cooperation among the CEE countries in phasing out lead from petrol and reducing local air pollution in the framework of the Sofia Initiative on Local Air Quality led by Bulgaria. We call on the Project Preparation Committee (PPC) to make lead phase-out part of its future work in both the CEE and NIS regions.

Energy Efficiency^[8]^,^[9]

We endorse the Policy Statement on Energy Efficiency (see Conference document ECE/CEP/47) and welcome the Guidelines on Energy Conservation in Europe (see Conference document ECE/ CEP/47/Add.1) submitted by the ECE Committee on Environmental Policy, and we remain convinced that increased energy efficiency will be a major tool for fulfilling our commitments in the Kyoto Protocol.
In particular, we will promote action to reform energy markets and pricing to ensure there are cost-based prices and economic incentives that increasingly internalise the environmental costs of energy production and use. In this context we support all international activities to develop measures to reduce aircraft noise and air emissions. We furthermore support work towards the introduction of regulatory or fiscal measures in high-growth transport sectors such as aviation. We will promote action to progressively reduce and where possible remove energy price subsidies which counteract an efficient use of energy and/or have harmful effects on the environment by 2005.
We acknowledge the complex, cross-sectoral nature of energy efficiency policies and the need for the integration of those policies into other sectors, for instance in the field of housing, transport and industry. For energy efficiency policies to be effective, all relevant levels of government should ensure a strong and efficient coordination of policy measures.
We acknowledge the importance of international financing for effective energy conservation, and the development of renewable energy sources particularly in central and eastern Europe including the NIS countries, for example through the World Bank, the Global Environmental Facility (GEF), United Nations Development Programme (UNDP), the European Bank for Reconstruction and Development (EBRD), the European Investment Bank (EIB), and the EU PHARE and TACIS programmes. We urge the international bodies concerned to make energy conservation and efficiency a priority in their operational policies and project implementation guidelines.
We will promote action to strengthen international cooperation in monitoring the implementation of energy efficiency policies. Progress will be reported to the next “Environment for Europe” Conference.

Pan-European Biological and Landscape Diversity Strategy

We acknowledge the Progress Report on the Pan-European Biological and Landscape Diversity Strategy, welcome the links which have been established with the implementation of the Convention on Biological Diversity and acknowledge the work undertaken under the Sofia Initiative led by Slovenia. We endorse the Resolution on Biological and Landscape Diversity (See Conference document ECE/CEP/54). ^[^10]
We are aware that biological and landscape diversity, particularly in CEE and NIS, represents an important asset for Europe as a whole and express our concern about the increased pressure that risks to further deteriorate the situation. We resolve to strengthen and implement instruments for a better integration of biodiversity and landscape conservation objectives into sectoral policies at national and international levels, inter alia by developing appropriate economic and financial incentives.
In particular, we note that land use has a strong impact on biological and landscape diversity and that there are currently wide opportunities for progress as well as potential risks in this area. To take advantage of opportunities and to avoid negative impacts, we will take initiatives to integrate biodiversity considerations into the agricultural sector within the EU enlargement and transition processes.
We call on all participating States, international organisations, NGOs and the private sector to increase their support, as appropriate, for the implementation of the Convention on Biological Diversity, inter alia through the Pan-European Biological and Landscape Diversity Strategy, by exploring new and innovative financing means.

Public Participation and The Role of NGOs

We regard the Aarhus Convention, which provides recognition for citizens’ rights in relation to the environment, as a significant step forward both for the environment and for democracy. We encourage all non- signatory States to take appropriate steps to become Parties to the Convention.
We note the Resolution of the Signatories to the Convention (See Conference document ECE/CEP/43/Add.1/Rev).
We recognise and support the crucial role played in society by environmental NGOs as an important channel for articulating the opinions of the environmentally concerned public. An engaged, critically aware public is essential to a healthy democracy. By helping to empower individual citizens and environmental NGOs to play an active role in environmental policy-making and awareness raising, the Aarhus Convention will promote responsible environmental citizenship and better enable all members of society to fulfil their duty, both individually and in association with others, to protect and improve the environment for the benefit of present and future generations.^[^11]
The decision to hold a special dialogue with environmental NGOs during this Conference marks our recognition of their essential role, and our engagement to strengthen lines of communication between governments and NGOs, including in international fora. We recognise the new role played by NGOs in this Conference and we greatly appreciate their leadership in organising and taking responsibility for the NGO session and in actively participating in Conference preparations.
We encourage countries to provide, as appropriate, practical and financial support for environmental NGOs, noting at the same time that part of the role of such groups can be to question government policies.

D. Environmental Action Programme for Central and Eastern Europe (EAP)

Refocusing on the NIS

We recognise the effective role that the EAP Task Force has played in promoting environmental policy reform and capacity building in CEE countries and NIS.

Participation in the Task Force has helped applicant countries, and their EU partners, to launch a dialogue on the environment during the enlargement process. We also welcome and encourage the more active participation in, and greater ownership of the process by the NIS. Taking into account the dynamism of the EU enlargement process and the large resources that the European Commission, the Member States and the Applicant States will be devoting to it, we agree that the main focus of future EAP work should shift towards the CEE countries and the NIS that are not part of the pre-accession process. In these countries, the need for external support for project preparation and implementation capacities, as well as for strengthening the operations of national environmental funds, is the greatest.
National Environmental Action Programmes (NEAPs), environmental financing and environmental management in enterprises should continue to provide the framework for the activities of the EAP Task Force, but the work should be designed and implemented better to respond to the differentiated needs of CEE and the NIS groups of countries. We acknowledge with appreciation the secretariat support that the OECD has provided to the Task Force. The Regional Environmental Center (REC) in Szentendre, Hungary, should play an increasing role in supporting the Task Force work in central and eastern Europe involving the applicant and non-applicant countries.

Environmental Financing and Economic Instruments

We welcome the approaches outlined in the report “Environmental Financing in CEEC/NIS: Conclusions and Recommendations (See Conference document ECE/CEP/50) and note that it presents a very varied picture. Some CEE countries have mobilised resources for environmental investments which are equal to, or greater than, OECD averages as a share of GDP. In the NIS, however, sources of environmental finance are weak or non-existent. These countries should develop appropriate financing strategies. To this end, we endorse the recommendations of the Report on Environmental Financing. In particular, we call for the development of more effective approaches to link the policies and instruments required to create demand and raise domestic finance with the mechanisms which supply financial resources for projects.
Environmental financing must come primarily from domestic sources. Economic instruments should play a more important role in terms of motivating the polluters to reduce pollution at their own costs (the polluter-pays principle), as well as promoting sustainable development and integration of environmental concerns into sectoral policies and raising revenues for national environmental funds and other forms of public and private financing. In this connection we welcome the exchange of experience among the countries in the framework of the Sofia Initiatives on Economic Instruments led by the Czech Republic and the UN/ECE- OECD workshop on economic instruments held in 1997 in the Czech Republic.
External finance will provide important assistance for applicant countries to meet EU environmental requirements. The main challenges will be to establish the policy and institutional frameworks, and the project preparation capacities, to ensure that these resources address priorities cost-effectively. External financing will remain very important in those countries that have limited domestic funding sources, particularly the NIS. Donor countries and international financial institutions (IFIs) should take a more proactive approach and expand their support to these countries, especially in contributing to financing pilot and demonstration projects in response to the increasing demand. External financing will also be important to help CEE countries and NIS to achieve global transboundary environmental objectives.
We welcome the recent review of the PHARE Guidelines in which the environmental sector is now made a main priority. We are however concerned that the TACIS programme still lacks a corresponding environmental profile. We therefore call for a similar recognition to that of the PHARE programme in the coming revision of the TACIS Regulation, including the need for close cooperation with other donors and IFIs, as well as enhanced procedures for project handling. In this respect, greater transparency in all phases of the project cycle is vital. We also call for an improved dialogue between TACIS and the beneficiary countries in order to make better use of existing TACIS assistance for environmental purposes.
We note the environmental projects financed and supported by the United Nations Development Programme (UNDP) at national and regional level in CEE countries and NIS.
We acknowledge the role IFIs have played in supporting CEE countries and NIS in addressing their environmental problems. We strongly urge IFIs to improve substantially their profiles as catalysts in pursuing environmental investment projects in the economies in transition. We will be more proactive, inter alia, through IFIs’ Executive Directors, in promoting more and better environmental projects in the CEE countries and NIS as well as mainstreaming environmental concerns into IFI project portfolios.
All partners – CEE countries and NIS, IFIs, donors and increasingly the private sector – should strengthen their efforts to mobilise and channel financial resources to resolve priority environmental problems in particular by cofinanced projects. The EAP Task Force and PPC should work to catalyse and facilitate these efforts, and to prepare a report assessing progress for the next “Environment for Europe” ministerial meeting.

National Environmental Action Programmes (NEAPs)

We welcome the report “Evaluation of Progress in Developing and Implementing National Environmental Action Programmes (NEAPs) in CEEC/NIS” (See Conference document (ECE/CEP/49)) prepared by the EAP Task Force, noting that the principles of the EAP remain valid. However as economic growth resumes, and needs and priorities within the CEE and the NIS region become differentiated, these principles will have to be applied even more rigorously. In the EU applicant countries, substantial changes in legislation and institutions as well as massive investments will be required. Cost-effective strategies to develop and implement them will be of crucial importance to the process. As the other CEE countries and the NIS move from development to implementation of NEAPs, a focused, pragmatic, result-oriented approach is urgently needed to overcome the scarcity of resources available. In this regard we encourage the coordination of NEAPs with the National Environmental Health Action Plans (NEHAPs).

Project Preparation Committee

We welcome the achievements of the PPC in the CEE countries. The PPC should respond to the particular need for external financing and for proactive coordination among clients, host governments, donors and IFIs in the NIS and the CEE countries which are not involved in the EU enlargement process. Its main activities should focus on these countries, whilst it continues its activities in the 10 CEE EU applicant countries. Within the NIS and in those CEE countries which are not involved in the EU enlargement process, the PPC should continue to work in close cooperation with the countries concerned as well as with the EAP Task Force and strengthen its work by locating PPC officers in the region.

Business and Environment

We undertake to catalyse, facilitate and strongly support the implementation of effective environmental management in enterprises including cleaner production in CEE countries and NIS based on the recommendations in the Policy Statement on Environmental Management in Enterprises in CEEC/NIS (See Conference document ECE/ CEP/51). We will give increased priority to environmental management in enterprises within bilateral and multilateral cooperation. We urge business and industry, trade unions, environmental citizens’ organisations, educational institutions, and other stakeholders to work with us to these ends. We invite IFIs and international organisations to provide practical support for strengthening environmental management in enterprises in CEE countries and NIS. We urge donors, IFIs, CEE countries and NIS to create a business climate that will encourage the establishment of local private sector environmental goods and services companies in CEE countries and the NIS.
We welcome the opportunity within this Conference to extend a dialogue with prominent representatives of the business sector as well as the improved dialogue between industry and the environment set out at this year’s CSD session. We confirm our willingness to establish this dialogue on a more continuous basis and invite the business community to join us in this effort with the aim of promoting public private partnerships designed to achieve our common environmental objectives and more generally to promote sustainable development. We welcome the Message from the European Round Table of Industrialists on company investment in CEE countries, which identifies activities of good environmental practice that are also good business practice. We note with satisfaction that twinning arrangements between enterprises in west European countries and enterprises in CEE countries and NIS are being established to promote the transfer of environmental knowledge and experience in a most direct and practical way.
We invite the EAP Task Force to facilitate and support this process and to prepare, on the basis of the evaluation of progress made, a report for the next “Environment for Europe” Ministerial Conference.

Regional Environmental Centres (RECs)

We recognise the development of the Regional Environmental Center for Central and Eastern Europe in Szentendre, Hungary, into an independent body of an international character. It provides a significant capacity to assist in solving environmental problems of the CEE region through cooperation among governments, NGOs and business, promotion of free access to information and public participation in environmental decision-making. We welcome initiatives of beneficiary countries to actively support the work of the Center.
In view of the importance of the civil society and public participation for improving the environmental situation, we welcome and endorse the establishment of regional environmental centres in Chisinau, Kyiv, Moscow and Tbilisi. They are being established and ope- rated as independent bodies that will promote cooperation among interested parties in addressing regional, transboundary and local environmental issues in an open and transparent way. We welcome the initiatives for increased environmental cooperation among the countries of Central Asia and their intention to establish a regional environmental centre. We encourage the founders and other interested parties to provide the necessary resources for the activities of the centres and to establish an international coordination committee to coordinate with the work of these new RECs. We also take note of the first steps to establish a new REC as an independent body of an international character in Istanbul and encourage further steps in consultation with other parties, including those within the region, concerning the establishment of this centre.^[12]^,[^13]

E. Future of the Environment for Europe Process

We are convinced that the “Environment for Europe” process has played an essential role in strengthening dialogue and cooperation in the environment field in Europe and in promoting sustainable development within the UN/ECE region. It has put the environment high on the agenda even in countries where the social and economic situation is unfavourable. The process has brought together a wide range of international organisations with an effective division of labour and channels of communications and collaboration between them. Environment is often seen as a model example of policy cooperation in Europe and we will strive to make it a model for the other continents of the world. The “Environment for Europe” process should build on the work done so far and, in particular, move forward from policy commitments to practical implementation.
We appreciate other ministerial processes concerned with the environment in Europe. We will take an active role within the follow-up to the ECE Conference on Transport and Environment, held in Vienna in November 1997, in particular by undertaking those actions which are foreseen in the Vienna Declaration and the Programme of Joint Action. We welcome the Joint Work Programme on the Conservation and Enhancement of Biological and Landscape Diversity in Forest Ecosystems 1997-2000 adopted by the Third Ministerial Conference on the Protection of Forests in Europe, Lisbon, 2-4 June 1998. We look forward to the Third Ministerial Conference on Environment and Health to be held in London in June 1999 and to achieving closer cooperation with the Environment and Health process, noting with satisfaction that a protocol to the UN/ECE Convention on the Protection and Use of Transboundary Watercourses and International Lakes is being prepared for this Conference with the aim of preventing, controlling and reducing water-related diseases by meaningful obligations. We welcome further processes of close cooperation like the ministerial conference on agriculture and environment which is under consideration in follow-up to the Integration of Biological and Landscape Diversity Objectives into Sectoral Policies (See Conference document ECE/CEP/53) and are committed to maximising the benefit of these for the sake of the environment in Europe.
We consider that the broad institutional arrangements of Environment for Europe shall continue with the following adjustments:

	Taking into account the importance and the comprehensive character of the “Europe’s Environment: The Second Assessment”, we call on the EEA together with existing national and international networks to update this information regularly and present the findings based on indicators to our future ministerial conferences in order to support decision-making.
	The ECE Committee on Environmental Policy should continue to screen the Environmental Programme for Europe, taking into account in particular the report “Europe’s Environment: The Second Assessment”, in order to implement priority actions on a Pan-European level within the context of its long-term programme of work and to report on progress of this work at the next Ministerial Conference.
	The EAP Task Force and PPC shall reorient their work and focus more on the NIS and those CEE countries not included in the pre-accession process. The Regional Environmental Center in Szentendre shall overall assume a greater role in the Environment for Europe process and specifically work on the activities of the EAP Task Force in CEE countries. The EAP Task Force shall also cooperate with new RECs in the NIS region.
	The progress since Sofia in reducing the number of preparatory meetings shall be maintained.
	The frequency of ministerial conferences shall be reduced to an interval of four years. The next Conference shall take place in the year 2002 on the tenth anniversary of the Rio Conference.
	A special meeting of senior officials shall convene before the end of this year and shall at that meeting, chaired by the present host country, decide on the next host country, preferably in a NIS country, and the exact date of the next Conference. In this connection, we take note of the offers by Kazakhstan, the Republic of Moldova and Ukraine to host the next conference.
	An ad hoc working group of senior officials shall convene two years before the next conference. This ad hoc working group shall serve as the coordinating body for the preparation of the substance for the next conference. The ad hoc working group shall be chaired by the host country of the next conference with the UN/ ECE serving as secretariat.
	The work of this ad hoc working group of senior officials shall be prepared by an Executive Committee (EXECOM) composed of two senior officials from the CEE countries, two from the NIS and four from the western European countries. The Chairpersons of the UN/ ECE Committee on Environmental Policy, the EAP Task Force, the PPC and the Council for the Pan-European Biological and Landscape Diversity Strategy, will participate as observers. It shall be chaired by the host country. The EXECOM shall also be established at the meeting of the ad hoc working group two years before the next conference. The practical preparations for the next conference shall be the responsibility of the host country.

We are committed to changing the negative trend in the state of the environment in the UN/ECE region and to monitoring progress at our next Conference in four years’ time. In this connection it is essential to stop the continuous degradation of the environment in the whole of the UN/ECE region, with particular emphasis on the NIS and to maximise the environmental benefits of the EU enlargement process. We are convinced that increasing public participation in environmental decision-making is important to strengthen democracy in Europe, an aim which we are committed to pursuing.
We express our deep gratitude to the Government of Denmark for having hosted this Conference and we wish to thank it and its people for the warm hospitality we have received.

Declaration

On the Phase-out of Added Lead in Petrol

The Ministers/Heads of Delegations of Austria, Belgium, Bulgaria, Canada, Croatia, Cyprus, the Czech Republic, Denmark, Finland, France, Germany, Greece, Iceland, Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, the Netherlands, Norway, Portugal, the Republic of Moldova, Romania, Slovakia, Slovenia, Spain, Sweden, Switzerland, Ukraine, the United Kingdom and the United States of America, who will sign the Protocol to the 1979 Convention on Long-Range Transboundary Air Pollution concerning Heavy Metals, ^[*14]

Concerned that the emissions of lead from the use of leaded petrol are causing severe damage to the environment and to human health;

Aware that techniques are available to reduce air pollution by almost eliminating lead emissions from on-road vehicles;

Aware that many countries have already phased out the use of added lead in petrol or are well underway in the process of doing so and have prepared plans for completely phasing out leaded petrol;

Considering that, beyond the measures provided for in the Protocol, timely and more effective reductions of lead emissions from petrol are feasible;

Declare as follows:

The Signatories to this Declaration have already phased out or will phase out the use of added lead in petrol for general use by road vehicles as early as possible and not later than 1 January, 2005.
The Signatories call upon the other Parties to the Convention who will sign the Protocol to join them in making every effort to control and reduce substantially their national lead emissions by phasing out the use of added lead in petrol for general use by road vehicles as soon as possible.

In witness whereof the undersigned have signed this Declaration.

Ministerial Declaration on Long-Range Transboundary Air Pollution

We, the Ministers and Senior Officials for the Environment from UN/ECE countries and the European Community, attending the Aarhus meeting as Parties to the Convention on Long-Range Transboundary Air Pollution,

	Note with serious concern that air pollutants, including hazardous chemical substances, continue to be transported in substantial amounts across national boundaries and over long distances, causing harm to human health and damage to ecosystems and natural resources of major environmental and economic importance;
	Are resolved to continue and intensify our efforts to protect human health and the environment notwithstanding the pressure from other competing priorities. In so doing we take into account the positive effects that environmental policy may have on long-term economic activity and employment;
	Recognize twenty years of successful cooperation between the Parties to the Convention, which sets an example for global action in environmental protection;
	Consider that the Convention is a key instrument for protecting our common environment by creating a scientifically based framework for gradually reducing the damage caused by air pollution to human health, the environment and the economy in the UN/ ECE region;
	Underline that the controls contained in the 1998 Protocols on Heavy Metals and Persistent Organic Pollutants constitute a significant step towards reducing emissions of substances that may cause adverse effects on human health or the environment;
	Stress the importance of all the requirements in the two Protocols and welcome the recent establishment of an Implementation Committee under the Executive Body for the Convention to assist in the review of compliance with the requirements of all Protocols to the Con- vention;
	Are determined to continue our efforts to further reduce the emissions of heavy metals and persistent organic pollutants by strengthening the measures on substances already included in the two Proto- cols as well as by adding new substances to the Protocols pursuant to Executive Body decisions 1998/1 and 1998/2;
	Urge the Signatories to the Protocol on Persistent Organic Pollutants to strengthen their efforts, in cooperation with the World Health Organization (WHO) and the Food and Agriculture Organization of the United Nations (FAO), to review the availability and feasibility of alternatives to DDT, and to promote the commercialisation of safer alternatives;
	Encourage countries to strengthen their efforts to identify and solve the environmental problems caused by the use of polychlorinated biphenyls (PCBs), and work together to assist countries with economies in transition in dealing with these problems;
	Are also determined to cooperate closely under the auspices of the United Nations Environment Programme to develop, preferably by the end of the year 2000, a global legally binding instrument on the elimination or control of certain persistent organic pollutants, including appropriate support to meet the special needs of developing countries and countries with economies in transition, taking into account measures to control the transfrontier movement of such substances;
	Call upon all Parties to the Convention, as well as international financial institutions, to support the implementation process of the new Protocols through bilateral and multilateral assistance to Parties with economies in transition, mindful that their implementation will require substantial efforts;
	Encourage Parties to the Convention to sign and ratify the new Protocols without undue delay and to do their utmost to implement them, if possible, even before their entry into force;
	Note the progress made in developing a multi-pollutant/ multi-effects approach including the technical basis for a draft protocol on nitrogen oxides and related substances, including ammonia and volatile organic compounds, covering all relevant sectors, based on scientific information and cost-effective solutions, and support acceleration of the negotiation of an ambitious and realistic protocol, with a view to finalising it by mid-1999;
	Welcome the proposal to designate the North Sea Area as an SO_x Emission Control Area under the MARPOL 73/78 Convention;
	Support the future priorities of work under the Convention, as outlined by the Executive Body, with a focus on implementation and compliance as well as review and extension of existing Protocols;
	Are keenly aware of the need to sustain the networks and capacities of the scientists and experts who have provided the scientific foundation for these protocols and for the obligations they lay down on national strategies, policies, programmes, measures and information, research, development and monitoring, and review by the Parties;
	Decide to apply the same high scientific requirements to the revision of existing Protocols and the development of any new ones;
	Recognize that effective implementation of protocols and further development of cost-optimal abatement measures require our full commitment and equitable cost-sharing between all stakeholders, for research into and monitoring of the effects of air pollutants on ecosystems and human health, for refining the science on which EMEP is based and for developing further integrated assessment modelling for those pollutants for which it is appropriate.

Annex 3: Financing Report from Aarhus ECE/CEP/50

ENVIRONMENTAL FINANCING IN CEEC/NIS; CONCLUSIONS AND RECOMMENDATIONS

Applications for permission to reproduce or translate all or part of this material should be made to:

Head of Publications Service, OECD, 2, rue André Pascal – 75775 Paris cedex, 16, France.

1. Environmental Financing in CEEC/NIS

2. Trends in Environmental Expenditure

3. Demand for Environmental Financing

4. Specific Issues in Environmental Financing

5. Environmental Financing Mechanisms

6. Recommendations

Appendix 1.	Selected data on domestic and external environmental finance in CEEC/NIS
Appendix 2.	Key references

Background and Introduction

The attached paper presents draft Policy Conclusions and Recommendations on Environmental Financing in CEEC/NIS. It has been prepared by the OECD/EAP Task Force Secretariat, in co-operation with the Project Preparation Committee. The Working Group of Senior Officials (WGSO), which is preparing the held “Environment for Europe” Ministerial Conference to be in Aarhus 23-25th June 1998, agreed that the paper should be forwarded to the Aarhus Conference.

This paper has a dual role: it aims to report on the progress which has been made since the last Ministerial Conference in Sofia in October 1995, and to summarise trends over the last half decade since the Lucerne Conference in April 1993. The paper is based on the findings of a more comprehensive analytical report, and discussions of those findings at a workshop in Paris, 9-10th February 1998. A draft of this paper was also discussed at the March 18 meeting of the EAP Task Force. Comments and suggestions made at that meeting have been taken into account in the preparation of the present paper. The comprehensive analytical report will be made available at the Aarhus Conference as a background document.

The attached paper:

Reviews the debate on environmental financing within the “Environment for Europe” process;
Presents trends in environmental expenditures;
Examines the forces creating demand for environmental financing in CEEC/NIS;
Analyses environmental financing in the enterprise sector, municipalities and national budgets;
Assesses the potential of existing and emerging environmental financing mechanisms (the supply side), and;
Recommends some next steps.

1. Environmental Financing in CEEC/NIS

The debates about environmental financing have evolved considerably over the course of the “Environment for Europe” process. In the preparations for the 1993 Conference in Lucerne, considerable attention was focused on “new and additional” financing which was to be provided by external sources. During the discussion of the Environmental Action Programme for Central and Eastern Europe (EAP) at Lucerne it was acknowledged that the bulk of financing for environmental investments in CEEC/NIS would have to come from domestic sources. Discussions highlighted the importance of priority setting, strengthening domestic environmental financial institutions to ensure the most cost-effective use of resources, and using external financing in a catalytic and strategic way.
At the 1995 Conference in Sofia, there was a recognition that “the obstacle to increased financing is not so much a lack of foreign capital as the high cost of commercial capital, the limited flexibility of financing mechanisms, and problems in linking priority needs with the available financing”. It was acknowledged that demand for environmental finance was still at low levels throughout the region. However, most discussions focused on the supply of finance, in particular the development of innovative financial mechanisms and the role of “soft” financing.
Since Sofia, the growing divergence in contexts and priorities between countries advanced in the transition to market economies and others, particularly the NIS, has become more evident. Some of the countries more advanced in transition have been very successful in mobilising resources for environmental investments, and they are now developing a new range of policies and instruments. In the NIS, progress has been considerably slower: sources of environmental finance are in very short supply and in some countries virtually non- existent. These developments have served to emphasise that environmental financing must be analysed more systematically as the interaction between demand and supply. Such a perspective emphasises the linkages between policies and instruments (to create demand and raise revenues), institutions (to channel scarce resources most cost-effectively) and investments (involving project sponsors in different sectors). This perspective also provides insights into how external financing and technical assistance can be made most effective.

2. Trends in Environmental Expenditure

Information about environmental expenditure is weak in most ministries of environment: responsibility for investments is usually with other ministries, local government or the enterprise sector. However, this lack of information and analysis limits the ability of ministries of environment to develop realistic environmental strategies, including financing strategies. Further efforts should be made to strengthen this capacity in ministries of environment.

4a. To support the preparation of this report, several studies were carried out. The main results and trends are presented below. (See annex 1 for more details.) These studies focused on environmental projects only. As such, they generally do not capture expenditures for integrated projects, which achieve both economic and environmental goals, such as cleaner production, and energy efficiency projects, nor the environmental benefits of improved environmental management in enterprises and investments to modernise production equipment.

(i) CEEC/NIS Environmental Expenditures

In most CEEC/NIS, domestic sources constitute more than 90% of total environmental expenditures. However, in the complex and difficult transition to a market economy, the overall levels, sources and types of expenditures are likely to vary. A Danish-supported study assessed trends in pollution abatement and control expenditures in six countries selected to represent a range of economic and environmental characteristics: Georgia, Hungary, Lithuania, Poland, Russia and Slovenia. Some of the main findings were:

There is a positive correlation between environmental expenditure and level of economic development (GDP per capita)
Environmental investment as a percentage of GDP in the countries most advanced in the transition (Poland, Hungary, Slovenia) compare very favourably with those in high-income OECD countries; and they are similar on a per capita basis with lower-income OECD countries;
Environmental investment expenditures appear to be virtually non-existent in Georgia; in Russia, they are comparable with low- income OECD countries as a percentage of GDP, but less on a per capita basis;
Environmental investments measured in constant prices appear to have peaked in 1994; Poland is the exception, where environmental expenditures have grown throughout the 1990s;
The public sector share of environmental investments in Hungary, Lithuania and Poland has increased in the 1990s; where it is possible to break down public sector investments, the share of local governments’ budgets has increased;
Environmental funds account for about 40% of environmental expenditures in Poland; 20% in Hungary, Lithuania and Slovenia; 5% in Russia; and they do not exist in Georgia;
Air and water protection account for the overwhelming share of investments; air is most important in Poland and Slovenia; water in the others; waste is an insignificant share in all countries except Hungary.

(ii) External Environmental Aid and Finance

External finance and assistance can play a catalytic role and complement domestic financial resources. Donor assistance is mostly in the form of grants, usually for technical assistance. IFIs channel funds from international capital markets in the form of loans on terms which are more attractive than those available on the domestic commercial markets of the recipient country. The Project Preparation Committee is a network in which donors and IFIs co-operate in order to accelerate environmental investments. The Global Environment Facility, which provides grants and concessional funding to meet the agreed incremental costs of measures to achieve approved global environmental benefits.
The main findings on external environmental aid and finance are:

Assistance from most, though not all, donors appears to have peaked and is now declining;
Finance from IFIs appears to have declined, particularly in CEEC; however, IFI finance for non-environmental projects with significant environmental benefits appears to have grown in recent years;
CEEC continue to receive more than twice the aid and finance received by the NIS, and many times more on a per capita basis;
The level of assistance and finance going to the NIS has not changed significantly since 1994, while that going to CEEC has declined slightly;
The largest share of assistance and finance goes to the water sector;
From 1993 through March 1998, the PPC had 58 projects under implementation or approved, with total investment costs amounting to 3.3 billion ECU, of which donor funding totalled about 319 million ECU; the bulk of projects have been in the municipal (water) sector and in CEEC (for further details see the PPC report).

(iii) Foreign Direct Investment

FDI has grown rapidly in recent years and is now at roughly the same level as official aid and financial flows. The way in which these private funds are channelled will probably have a much more significant effect on the environment over time than official aid and financial flows. The main trends appear to be:

While further analysis of the environmental implications of investment flows is needed, preliminary evidence suggests that no more than 10% is going to the environmentally sensitive heavy industry sector;
CEEC/NIS receive a relatively small proportion of FDI globally: as of 1995, about 2/3 of total investment going to Latin America and the Caribbean and less than 1/4 of that going to Asia; but almost three times as much going to Africa.
Reflecting investors’ assessment of opportunities and risks, FDI is concentrated in relatively few countries; in 1996, 74% went to five countries – Poland, Russia, Hungary, the Czech Republic and Kazakstan;
A review conducted at an OECD workshop suggested that environmental liability had not been a major impediment to FDI, in part because of policies put in place. However, there is some evidence that concerns about environmental liability have deterred investors and delayed deals in some sectors.

3. Demand for Environmental Financing

Demand for environmental financing reflects the willingness and ability of polluters and users of environmental resources to pay for investments to resolve environmental problems. It is shaped by the level of economic development and the stringency with which envi- ronmenal standards are set and enforced. Demand will also reflect the perceived and actual severity of environmental problems. Generally, demand in CEEC is still low compared with that in OECD countries. In the NIS, the demand is even lower and, in some cases, virtually non-existent. The supply of finance mirrors these situations.
In many CEEC, there has been a recent shift in demand for environmental investments. In most countries: economic growth has resumed, generating resources for investment; macroeconomic stabilisation has helped reduce interest rates and inflation; the reduction in subsidies on energy, water and other resources has created incentives for greater efficiency; new trade relations have required exporters to pay more attention to environmental issues; new policies, including NEAPs, and instruments have promoted better implemen- tation of the Polluter-Pays Principle (PPP); decentralisation is creating demand for better environmental services at local level; public awareness and, in some cases, willingness-to-pay for environmental improvements is increasing; and obligations under regional and global environmental conventions are leading to investments, often with international assistance.
Accession to the EU will transform the demand for environmental investments in the countries concerned. It has been estimated that the total investment costs for the 10 accession countries to comply with EU Directives for air, urban and industrial wastewater and solid and hazardous waste management are on the order of 122 billion ECU. This is equivalent to investments several times higher as a proportion of GDP than in most OECD countries and more on a per capita basis. There may also be important distributional and social issues to address as prices for water and other environmental services increase. While these figures require careful interpretation, and do not address the benefits of expenditures, they far exceed current levels of expenditures and the resources which might be made available by the EU. Designing cost-effective strategies which strike a realistic balance between the demand for, and supply of, finance therefore will be a massive challenge.
No equivalent demand exists in the NIS: several are classified as developing countries; and in the others, generally low personal and co-orporate wealth levels contribute to low-level demand for environmental investments; high inflation and stringent lending conditions discourage most types of investment; enterprises and local governments are still heavily subsidised; NEAPs are under development and have yet to be implemented; public demand for environmental improvement is weak; the “implementation gap” to objectives in regional and global environmental conventions is greater than in CEEC. The low demand for environmental improvements has made it difficult secure financing within the state budget and to establish new domestic financing mechanisms.

4. Specific Issues in Environmental Financing

(i) Enterprise Sector

EBRD estimated that by mid 1997, the private sector accounted for 50% or more of GDP in all CEEC and six out of 12 NIS. However, privatisation has not necessarily led to better economic or environmental performance in enterprises. In some countries governments hold minimum shares in enterprises and sometimes provide credits and subsidies that shield these enterprises from competition. In other countries, the new owners are former managers from the period of state ownership who have found it easier to maximize personal wealth by selling corporate assets and obtaining subsidies than by improving corporate performance in the marketplace. In addition, political will to enforce environmental requirements has been weak in many countries.
Even allowing for weaknesses in the existing incentive structure, “win-win” investments are not occurring at the rate originally hoped for. In addition to a weak policy framework they are constrained by limited availability of affordable investment capital, and lack of information and skills in enterprises and financial institutions to develop and implement projects. Cleaner Production programmes and related financing mechanisms can play a useful, though probably modest, role in overcoming these obstacles in CEEC and some NIS. More substantial investments will be required to comply with EU standards. Strengthening environmental management in enterprises and undertaking win-win investments, nevertheless, are important first steps. The most important needs in most countries are to strengthen demand for better environmental performance by subjecting enterprises to budgetary, policy and other incentives which promote efficient use of resources, and to pursue effective environmental compliance.

(ii) Municipal Environmental Finance

In the transition, responsibility for the provision of a variety of environmental services has been decentralised. Local or regional authorities inherited a backlog of unfinished projects, infrastructure in varying states of disrepair, and, frequently, sharp declines in support from central budgets to finance new and replacement capital. Where these services generate pollution as a by-product (e.g., district heating and wastewater collection, treatment and discharge) existing pollution control or treatment systems were most often outdated, inefficient or non-existent.
Demand for environmental services is closely related to the process of (fiscal) decentralisation and the ability of communities to cover costs through user charges or local taxes. Generally, operation and maintenance costs for municipal services are covered by annual user fees. Capital costs can be substantial and unless they are financed over 15 to 20 years they may require significant increases in user changes. This, in turn, may exceed the ability of some households to pay for basic services like water or energy. The revenue base for municipal services is particularly weak in the NIS where household incomes significantly lag those in most CEEC. Yet, the capital requirements in the NIS are substantial because infrastructure is in a serious state of deterioration and resulting, inter alia, in increased risk of water-borne disease.
Subsidies have played an instrumental role in the development of municipal environmental infrastructure in CEEC/NIS, and OECD countries, often representing more than three-quarters of capital outlays. While subsidies reduce the revenue requirements that must be covered from user chargers (thereby shifting the costs of services to a broader range of taxpayers), they often engender perverse effects, encouraging end-of-pipe investments at the expense of pollution prevention and providing incentives for oversizing of infrastructure. They have also promoted overuse of energy and water, thus exerting upward pressure on user fees once financial support from central budgets was withdrawn or reduced.
Across-the-board subsidies are blunt instruments to treat cases of social hardship. Support targeted on the most needy households is more efficient if decoupled from the pricing of services. Subsidies can also be useful to support project preparation for capital investments, or public-partnerships. They should not discourage energy and water conservation or public-private partnerships.
As the demand in the advanced transition countries for better quality environmental services rises and municipalities invest in controls to achieve EU environmental quality standards, new mechanisms will be needed to finance the higher investment costs. Indeed, encouraging new initiatives are already underway in some of the advanced transition countries. Support should be given to efforts to develop least-cost solutions and creative financing arrangements, such as those involving public-private partnerships, issuance of municipal bonds, and the use of municipal guarantees.
In the NIS, the most immediate need in the municipal sector is to restore or improve the quality of basic services. The institutional capabilities to manage these services and place them on a firmer financial foundation also need to be strengthened. Subsidies and external financing will be needed to catalyse improvements in the environmental performance of the municipal sector in the NIS in the absence of rapid increases in per capita incomes and affordability of services.

(iii) National Budgets

Despite significant decentralisation in some CEEC, the national budget continues to be a major source of environmental expenditures. In some of the Baltic States, for example, Public Investment Programmes have prioritised environment and this has helped leverage donor grants and IFI loans. Some CEEC have also become more effective at linking their environmental programmes with the national budget cycle. However, in many CEEC/NIS, there is much inertia in the budget process, with resources sometimes allocated on the basis of precedence rather than efficiency considerations. In many NIS, allocations for the environment have fallen significantly. In some cases, extra-budgetary funds are financing monitoring equipment and other services normally provided by the state budget. As the transition progresses, there is a need to promote greater involvement of the private sector in environmental investments.
Protection of biodiversity has traditionally been financed from the public sector. In many CEEC/NIS, it was a positive legacy of the former regimes. However, demand for biodiversity has been low in most, though not all, CEEC/NIS during the transition. Frequently the demand has come from international or external sources. Further efforts are needed to stimulate domestic demand, for example through public information and awareness campaigns.
Financing biodiversity projects is difficult because they tend to be small, geographically dispersed and lacking revenues which could be used to repay loans. However, efforts are being made to integrate biodiversity into economic activities, e.g. agriculture and tourism. Experimentation with a range of user fees is increasing e.g. timber sales, hunting permits, sale of seedlings, revenue for recreational activities. A group of experts recently proposed that a Pan-European accreditation scheme should be established to help identify biodiversity projects. This should be linked with efforts to strengthen project preparation capacity and the development of mechanisms to “bundle” small projects into packages which could be supported by financing institutions. Alternatively, mechanisms should be established specifically to finance small projects; the Global Environment Facility’s Small Grants Programme provides one model. Public-private partnerships may also provide opportunities to expand financing e.g. by allowing private sector partners to develop non-sensitive areas in return for services provided in protection areas.

5. Environmental Financing Mechanisms

Substantially more experience has been gained with environmental financing mechanisms since the Sofia Conference. Donors and IFIs have helped to supplement domestic sources of capital and to transfer know-how. Domestic financing mechanisms have evolved in CEEC, but there is a continuing challenge to ensure that soft financing is used transparently and in the most cost-effective manner and that it does not inhibit the emergence of more market-based mechanisms. This is also true for finance provided directly from the State budget. Strengthening financing mechanisms in the context of higher costs of compliance with EU legislation and the potential benefits of facilitating access to EU sources of financing will become the major challenge in accession countries. For the NIS, establishing financing mechanisms in the current state of low demand will be the main challenge. It is unlikely that such mechanisms will be established without external finance and/or technical assistance. In both groups of countries, new opportunities will arise as a result of the Kyoto Protocol.

(i) Environmental Funds

Environmental funds, capitalised largely by environmental charges and taxes, continue to play an important role in CEEC. They are strongest in Poland where expenditures from the National Fund were nearly $500 m in 1996, and the contribution from all funds accounted for about 40% of domestic environmental expenditures. New funds have been established in several countries since Sofia and the capacities of some existing funds strengthened. The revenue base of funds has improved and new disbursement mechanisms have developed. However, substantial further efforts are required in most funds to meet the recommendations in the St. Petersburg Guidelines. If this could be achieved, environmental funds could play an important role in the EU accession process.
In the NIS, the institutional base and legal foundations of funds are much weaker. In Russia, the expenditure of the Federal Environmental Fund in 1996 was about $14 m. The fees and fines which generate the Fund’s revenues are much lower than in CEEC. For example, the charge for one ton of SO₂ in Russia is $1.22, compared to $20.80 in Estonia and $82.61 in Poland. Failure to recirculate revenues and their diversion for non-environmental purposes has undermined collection efforts. Overall the capacities and effectiveness of funds in the NIS are weak. However, in Russia the system of environmental funds is being consolidated and strengthened with Danish support. The experience from this project will provide valuable lessons for other NIS.

(ii) Environmental Funds Capitalised by Donors and IFIs

Four types of funds have been established, capitalised by donor grants and/or IFI loans:

Debt for environment swaps (Switzerland agreed a swap with Bulgaria at the time of the Sofia Conference; Poland had previously concluded swaps with several donors);
Environmental Investment Funds (in Lithuania and Latvia capitalised by PHARE grants);
Environmental Development Fund (a joint stock company owned by the Slovenian government, operating as a non-profit organisation);
Pollution abatement facility capitalised by an IFI loan (the National Pollution Abatement Fund in Russia was capitalised by $55m loan from the World Bank and a $13m Swiss grant).

All of those funds, with the exception of the Polish EcoFund, operate on a revolving basis, providing soft loans for priority projects. As a review of the Polish EcoFund illustrated, institutions established by donors and/or IFIs can have a catalytic effect in mobilising other resources and enabling the establishment of solid institutional capacity that encourages greater financial discipline and improved accountability and transparency. The opportunities for replicating financing mechanisms using IFI loans and/or donor grants are probably greater across the region than the opportunities for establishing new mechanisms based on debt for environment swaps.
A second stage of the National Pollution Abatement Facility in Russia is under development which would involve a more region-oriented approach, with loans on-lent through financial intermediaries (e.g. banks, environmental funds) with repayment guarantees provided by regional governments. This type of approach could be promising in other NIS, provided there is adequate capacity to prepare projects and manage the project cycle, adequate demand for financing, and adequate supply of co-financing.

(iii) Mechanisms Established in Existing Financial Institutions

IFIs and donors have established credit lines for environmental investments in co-operation with financial intermediaries in the region. With the local partner sharing the credit risk, these credit lines can reduce the costs of preparing projects and conducting financial appraisals of borrowers, and facilitate IFI support for smaller loans than would be available directly from the IFI. In addition, this co-operation often contributes to the strengthening of the local financial intermediary, particularly in appraising environmental projects and non-environmental projects with environmental components, and demonstrating the financial attractiveness of win-win environmental investments.
A similar approach is represented by the Cleaner Production Revolving Facility established by NEFCO with Norwegian support to provide co-financing for investments in Northwest Russia and the Baltic countries, primarily Lithuania. For this facility, NEFCO relies on local Cleaner Production Centres to assist project promoters in the identification and preparation of projects.

(iv) Support from EU Institutions

As part the EU’s approach to enlargement, the European Commission is now reorienting the PHARE Programme. This reorientation has two key objectives – to better facilitate the EU applicant countries’ efforts to adopt, implement and enforce the acquis communautaire, and to further decentralise the management of PHARE programmes to the EU applicant countries themselves. A key feature of this reorientation is an increase in PHARE’s level of investment support and a refocusing of its technical assistance and institution building support onto those critical weaknesses in applicant countries’ accession strategies. The result of this reorientation is a significantly enhanced level of support for the environment sector.
As well as innovative institution building support mechanisms (such as civil servant exchanges and access for applicant countries to internal EU programmes like LIFE), the reorientation will see a concentration in the investment support area on four critical aspects of enlargement: direct promotion of compliance with EU norms; integra- ted regional development programmes; support for the banking sector to better meet the needs of small and medium enterprises; and, support to large scale infrastructure projects.
In addition, a centrally managed Large Scale Infrastructure Facility will be established, with 150 mecu for 1998-99, to co-finance investment projects with the IFIs, solely in environment and transport. A second centralised facility is now being established to address the needs of applicant countries which will not start accession negotiations in 1998 (i.e. Lithuania, Latvia, Romania, Bulgaria and Slovakia). This second facility will focus on privatisation, SME development and border control.
In the period 2000-2005, support from the Commission to central Europe will expand. A facility with 1 billion ECU per annum will be established focusing on financing accession-related investments in environment and in transport. In addition, a separate agricultural facility of 500 mecu per annum will assist the applicant countries’ in integrating their agricultural policies with those of the EU. Lastly, the PHARE programme, with a budget of 1.5 billion ecu per annum, will continue its support for general approximation and other critical areas such as regional development.
The European Investment Bank (EIB), the EU’s long-term financing institution, will also expand its efforts to support the accession process. The EIB has been active in CEE since 1990, signing loans to a total value of about 6.4 billion ECU in its ten countries of operation (the Bank does not lend in the NIS). In the period to the year 2000, the EIB has a mandate to lend 3.5 billion ECU in the 10 accession countries; in addition a special “Pre-adhesion Facility” of 3.5 billion ECU has been established to support the accession process. Within this financial framework totalling 7 billion ECU, EIB will seek to increase lending to help accession countries comply with the environmental acquis of the European Community; recent studies suggest that the needs are particularly large in the fields of water, wastewater, air pollution and solid waste though considerable preparations will be necessary to establish viable projects for financing. In stepping up its environmental activity in CEEC, the EIB expects to work closely with the services of the European Commission as well as other multilateral and bilateral sources of finance.

(v) Commercial Banks

With the exception of credit lines established by IFIs, commercial banks have not played a significant role in environmental financing in CEEC or NIS. This is because of the low demand for financing, the more attractive lending opportunities available to banks and lack of knowledge of environmental financing. However, there are some promising developments involving banks co-operating with environmental funds in financial appraisals of investments, management of loans, and/or co-financing. Allocation of costs and risks are the key factors in these arrangements.

(vi) Green Equity, Loan Guarantees, and Leasing

Green equity schemes were one of the initiatives proposed at Sofia. Such schemes are used to invest in start-up companies or companies expanding into the environmental goods and services industry. After Sofia, there appears to have been different expectations among donors, IFIs and CEEC, concerning the objectives and organisation of green equity schemes. As a result, only one scheme has come to fruition and several others have stalled. Existing venture capital funds may in some countries provide a sufficient source of equity for companies entering the environmental goods and service industry. However, green equity schemes could also play a potentially useful role in helping to support the broadest possible scope of environmental investments.
The main experiment with loan guarantees appears to have been in the Czech Republic, where the US supported a domestically owned and operated Municipal Infrastructure Financing Company which guaranteed loans for, inter alia, environmental investments (often co-financed by the State Environmental Fund). Another important development concerned an EBRD loan in St. Petersburg for a water pro- ject; the first IFI supported project where the guarantee was provided by a municipality rather than the central government.
There is an increasing market for environmental leasing arrangements, whereby private firms provide equipment that is needed in the provision of environmental services. Typically, leasing involves vehicles or equipment used in solid waste collection, transport, and disposal. Such arrangements enable municipalities to spread costs out over a longer period and mitigate the need for capital financing.

(vii) Global Environmental Financing Mechanisms

The Kyoto Protocol to the Framework Convention on Climate Change (FCCC) provides for several co-operative mechanisms. These will be discussed further at the Conference of Parties in Buenos Aires in November 1998. If the operational rules of these mechanisms are agreed, there would seem to be considerable scope for CEEC/NIS to benefit from the opportunities provided. The mechanisms would allow:

Annex I countries to fulfil their reduction obligations as a group rather than one by one. Countries can agree among themselves how they wish to distribute the burdens and choose whichever mechanisms they see fit. All such arrangements must be announced at the time of ratification of the protocol. Emissions “bubbles” cannot be created at a later stage unless the parties to the FCCC agree to modify the rules.
Joint implementation between the industrialised countries. This means that cross border investments reducing greenhouse gas emissions among parties listed in Annex I of the FCCC will count towards meeting the obligations of the country where the investment originates. Pilot projects have been carried out and systems of verification and certification are being developed.
Trading emission rights between countries with quantified emissions commitments. At the moment only Annex I countries have taken on such commitments, and the rules for emissions trading are still to be developed. If countries agree that private companies can invest – subject to general rules and controls – the reduction units may become the property of companies and like all other property, it can be bought and sold.
Annex I countries investing in emission reductions outside their group through the Clean Development Mechanism (CDM). Such reductions may be credited from the year 2000, and these credits can be accumulated to meet future obligations. A share of the proceeds for project activities should be used to contribute to adaptation measures in the countries concerned, probably through some sort of fee for CDM approval. Consequently, the “price” of certified emissions reductions will be higher than the cost of the climate gas reductions themselves. The role of the CDM awaits clarification, but there seems to be general agreement that the CDM is neither a fund nor a new institution. The CDM would rather be a regulatory mechanism controlled by the parties to the Kyoto Protocol charged with ensuring proper certification, and serving in a clearing-house function to the extent requested.

As of March 1997, the Global Environment Facility (GEF), managed by the World Bank, UNDP and UNEP, has allocated 223.3 million USD in the CEEC/NIS region, which represents 16.6% of total GEF allocations throughout the world. Within its main program areas, the GEF has allocated 57.1 mUSD to reduce greenhouse gases, 109.3 mUSD to reduce emissions of ozone-depleting substances, 33.4 mUSD to protect biological diversity, and 23.5 mUSD to address water pollution problems of international water bodies. The GEF could play an expanded role, particularly in the NIS, provided there are increased efforts to strengthen project identification and preparation capabilities. The “Capacity 21 Fund”, managed by UNDP, could play an important role in this regard, particularly in the NIS, as well as in developing the human resources necessary for preparing and implementing national “Agenda 21” and environmental action plans.

6. Recommendations

In all countries of the region, there is a need to strengthen the demand for environmental financing and to better integrate environmental considerations into economic and financial sector reforms. In addition:

There is now a pressing need in the NIS to develop or strengthen the policy and institutional frameworks required in order to mobilise and channel domestic financial resources more effectively. Technical assistance can play an important role in this respect. IFIs and donor financial resources can also play a crucial catalytic role in supporting the establishment and development of domestic mechanisms to finance pilot and demonstration environmental projects.
CEEC will need to strengthen domestic mechanisms in order to finance the investments required to comply with EU environmental standards. Mechanisms also will be needed to ensure that the substantial resources provided by EU institutions (PHARE, EIB) will be used to address priorities in a cost-effective manner.
Within their mandates, the EAP Task Force and PPC should work to implement these recommendations. Concerted action will be needed by all partners; CEEC/NIS, IFIs, donors and increasingly the private sector. A report assessing progress should be prepared for the next Environment for Europe Ministerial Conference.

More specifically:

Both CEEC and NIS should develop environmental financing strategies adapted to their particular circumstances. These strategies will be most effective when they establish clear targets, address both the demand for and supply of finance, and integrate policy, institutional and investment measures. They should also consider social and distributional issues. Donors and IFIs can provide valuable support in assisting CEEC/NIS to develop strategies at the national, regional, and sectoral levels. The financing strategy developed by Lithuania provides a useful model, but further work is needed to develop methodologies for preparing such strategies.
CEEC/NIS should strengthen project preparation capacity, though the needs are different among countries. In many CEEC, considerable progress has been made in establishing capacity in this area; the lessons from the US-supported EAPS Programme are helpful in this respect. However, there are still major capacity gaps in municipalities, enterprises and communities which could create important bottlenecks and inefficiencies in EU accession investment programmes. Further analysis of the obstacles should be undertaken to help design capacity building programmes. In the NIS, there is a widespread need to strengthen capacity for, and understanding of, the investment project cycle. In some NIS, establishing effective project implementation units to assist in implementing NEAPs could be a useful first step.
In the enterprise sector, financing mechanisms which provide capital on affordable terms to support win-win investments can play an important role in most CEEC/NIS. Experience is being gained with various approaches and this should be assessed and shared. As foreign investment flows increase, their positive and negative environmental impacts should be monitored and measures to maximise their environmental benefits identified. More generally, there is a need to strengthen incentives for private sector investments.
Efforts to develop more market-based schemes to finance municipal environmental services have been successful in some CEEC and NIS and should receive greater support (e.g. municipal bond and guarantee schemes). The results of these efforts should be assessed and disseminated widely. Factors which either promote or impede public/private partnerships in the provision of municipal environmental services, including the role of subsidies, should be analysed, and work carried out to develop projects demonstrating the potential of such partnerships.
Expansion of capacity to identify and prepare biodiversity projects is a important need. Awareness programmes should be strengthened, and incentive measures which can help raise revenues introduced. Mechanisms either to help “bundle” groups of projects into financeable packages, or to support small projects should be developed.
Further efforts should be made to strengthen the capacities of Environmental Funds in CEEC to help them meet the recommendations of the St. Petersburg Guidelines; if this could be achieved, they could play an important role in channelling domestic and external resources for investments linked to EU accession. In some CEEC, particularly where private capital markets are developing quickly, greater efforts should be made to ensure that funds, through their provision of subsidised finance, do not inhibit the emergence of more market-based financing mechanisms. As the legal, institutional and revenue base of Environmental Funds in the NIS is clarified and strengthened, donor assistance could provide important institutional support and co-financing opportunities.
Promising forms of environmental financing mechanisms capitalised by IFI loans and/or donor grants should receive further support. In most cases, this type of approach will be easier to replicate with IFI loans and/or donor grants than debt for environment swaps. Alternative models, and key factors in their successful application in different countries, should be assessed.
Experimentation with a range of other facilities, revolving funds and credit lines should be continued. These mechanisms can contribute to the transition to more market-based financing in the municipal sector and help finance win-win investments in the enterprise sector.
Experience with equity, guarantee and leasing schemes in the region is limited, thus the role to be played by such schemes requires further analysis. Nevertheless, they can be useful in specific circumstances and their further development should take account of experience to date.
Opportunities for making more effective use of global financing mechanisms should be further examined in the appropriate forums. There is an important potential for the Global Environmental Facility to seed the development of environmental financing capacity in the NIS. A high priority should be given to developing concrete means for realising the important opportunities provided by the Kyoto Protocol for enhancing financial and technology flows from advanced industrial countries to CEEC/NIS.
There is a need to reinforce co-operation and the exchange of experience on environmental financing among CEEC/NIS. More effective ways should be found to share the positive experiences of CEEC with NIS. Partial untying of aid to enable donors to hire CEEC experts to participate in NIS programmes would help. The countries engaged in EU accession would benefit from sharing their experiences in developing and implementing environmental finance strategies. The EU should help them to do so.
A better understanding and analysis needs to be developed of the opportunities for, and constraints to, environmental financing. This is particularly true in environment ministries which generally do not control the financial means, but need to improve their understanding of, and influence over, the main financing mechanisms. To assist in these tasks, better information should be collected, analysis deepened, and indicators for the demand and supply sides developed. In particular, CEEC/ NIS need to develop better indicators of their environmental expenditures. An agreed methodology should be developed to assess the environmental components of non-environmental projects. Further analysis of the application of economic instruments in CEEC/ NIS, both as incentives for pollution reduction and revenue-raising instruments, should also be conducted.

Appendix 1: Selected data on domestic and external environmental finance in CEEC/NIS

Table 1. Domestic pollution abatement and control investments in selected CEEC/NIS, as a share of GDP, 1990-96 (in per cent)

	1990	1991	1992	1993	1994	1995	1996
Georgia	-	-	-	-	-	0.00	0.00
Hungary	-	0.39	0.66	0.52	0.80	0.55	0.61
Lithuania	-	-	-	0.87	1.03	0.79	0.46
Poland	0.70	1.01	1.04	0.97	1.01	1.11	-
Russia	-	-	0.28	0.34	0.39	0.39	0.36
Slovenia	-	-	0.16	0.30	0.61	0.44	-
Netherlands	-	0.55	0.62	-	-	-	-
Portugal	0.48	-	-	-	0.40	-	-
Germany	-	-	-	0.54	-	-	-

OECD defines pollution abatement and control (PAC) activities as “purposeful activities aimed directly at the prevention, reduction and elimination of pollution or nuisances arising as a residual of production processes or the consumption of goods and services. This definition specifically excludes expenditure on natural resource management and activities such as the protection of endangered species (fauna and flora), the establishment of natural parks and green belts and activities to exploit natural resources (such as the supply of drinking water).” (OECD, Pollution Abatement and Control Expenditure in OECD Countries, 1998.) This methodology has been used to collect comparable data from the six case study countries, as national definitions of environmental expenditures vary. OECD regularly collects data on Member countries using this methodology.
External assistance and finance are, in principle, not included in this table or in figures 1, 2 and 3 which concern domestic finance.

Source: OECD and COWI based on national statistics.

Figure 1. Trends in domestic pollution abatement and control investments, 1990-96. (Index using constant domestic prices, with 1993 = 100)

Source: COWI based on official national statistics.

Figure 2. National pollution abatement and control investment per capita, 1996 (in US$, using PPP exchange rates)¹

1995 data has been used for Poland. Source: COWI based on national statistics.

Figure 3. Share of Environmental Fund spending in total PAC Investments, 1990-96

For Slovenia, 1996 data are estimates. Georgia does not have an environmental fund. Sources: COWI.

Table 2. Trends in Donor/IFI Commitments for Environmental Assistance and Finance

	Type^a	1994	1995	1996	1997¹	Total
Bilateral Donors Japan² Norway Switzerland United States	G / L / O G .. G	130.7 5.9 19.4 70.5	93.3 11.0 17.4 41.1	9.4 10.8 28.0 19.0	1.4 9.1 9.8 ..	234.9 36.7 74.6 130.5
Austria Denmark³ Finland France Germany Netherlands Sweden⁴ United Kingdom⁵ EC-DG I Phare⁶ Tacis EC-DGXI Sub – Total EU	.. G G G / S .. G G G G G G	14.1 32.9 7.7 7.0 18.0 16.1 27.39 3.6 138.9 .. 1.6 239.8	3.4 54.2 9.7 2.1 28.5 11.1 .. 4.2 142.1 12.0 0.8 268.0	5.4 41.6 14.5 2.5 47.5 16.8 18.12 3.0 134.1 24.0 0.9 290.2	.. 68.0 14.0 9.5 26.4 26.8 13.05 3.2 166.1 28.5 0.9 343.4	22.9 196.7 46.0 21.0 120.4 70.7 58.57 13.9 581.2 64.5 4.2 1141.4
International Financial Institutions Asian Development Bank⁷ EIB⁸ EBRD – environmental projects only NEFCO GEF NIB World Bank – environmental projects only⁹	G L L / G E / G / L G L L	0.0 95.0 322.2 19.4 5.5 41.5 155.1	0.4 200.0 62.0 6.1 28.5 0.3 204.3	0.0 15.0 96.2 11.4 24.5 9.0 88.6	1.1 0.0 93.9 12.5 10.2 118.2 66.2	1.5 310.0 574.3 49.4 68.7 169.0 514.1
EBRD – env. components of non-env. projects¹⁰ EBRD – energy efficiency projects WB⁹ – non-env. projects with env. components¹¹ WB – projects with significant env. benefits		.. .. 851.4 ..	157.1 64.1 739.8 ..	200.6 71.0 99.1 288.0	113.1 60.4 222.5 716.6	470.7 195.6 1912.8 1004.6

..data not available. a) G-grants; L-loans; S-soft loans; E- equity; O-export credits and other forms of assistance.

Some responses are incomplete for 1997.
1994: 123 mECU loans; 1995: 20.3 mECU export credits.
1995 data include grant equivalent of soft loans. Data do not include the Danish environmental investment facility, created in 1995. Through 1996, the facility provided 3.7 mECU in equity and 6.6 mECU in loans.
Preliminary data for the Swedish EPA and Swedish International Development Agency only. Includes some energy projects. Due to a change in fiscal year, part of 1995 data are included in 1996; not included in subsequent figures and tables.
Data include only technical assistance grants through the Environmental Know How Fund.
Preliminary data. May include some double counting.
Technical assistance only.
EIB signed 555 mECU of projects with significant environmental benefits in 1997, including 425 mECU for flood damage reconstruction. Data on such projects in previous years are not available.
World Bank loans to Turkmenistan not included.
Values of environmental components only, as calculated by EBRD. 1994 data are not available.
Total values of loans with environmental components.

Source: OECD, based on donor and IFI data.

Figure 4. Trends in External Environmental Assistance and Finance to CEECs and NIS ^a

Totals are larger than sum of technical assistance and investments, as some donors did not classify commitments.
Includes EC. Some responses are incomplete for 1997.
Environmental projects only.

Source: OECD, based on donor and IFI data

Table 3. Donor/IFI Commitments for Environmental Investments by Sector (mECU)

	1994	1995	1996	1997¹
Air/energy	488.93	384.84	53.99	94.87
Water	143.10	133.09	198.01	177.79
Waste	58.76	0.43	10.04	12.96
Biodiversity	6.86	5.16	39.56	5.31
Other²	5.65	15.08	31.86	67.49
Total	703.30	538.60	533.46	358.42

Preliminary data
Includes commitments to environmental funds

Source: OECD, based on donor and IFI data.

Table 4. Donor/IFI Commitments of Environmental Assistance and Finance to CEECs and NIS³ by Recipient Country (1994-1997)

Partner Country	Technical Co-operation		Invest- ments	Total^b (mECU)	Total per capita (ECU)
Partner Country	Policy Department	Investment preparation	Invest- ments	Total^b (mECU)	Total per capita (ECU)
Albania Bosnia & Herzegovina Bulgaria Croatia Czech Republic Estonia FYROMc Hungary Latvia Lithuania Poland Romania Slovak Republic Slovenia Region wide – CEE Total CEEC	20.7 0.3 20.2 0.9 39.8 7.5 1.3 16.1 9.5 15.7 34.6 12.4 9.6 19.1 12.6 220.3	0.9 0.9 3.0 1.2 5.0 7.1 0.0 0.5 7.0 10.7 18.2 25.1 2.2 0.3 16.6 97.6	24.9 32.2 90.1 88.8 313.5 73.5 5.4 172.9 96.5 86.9 339.3 169.3 132.1 20.2 23.0 1668.6	60.5 33.5 136.3 90.9 397.3 132.1 10.3 208.4 123.9 138.5 603.5 249.4 145.2 43.9 107.2 2486.1	17.9 9.3 16.0 20.2 38.5 88.8 4.8 20.4 48.8 37.1 15.6 11.0 27.2 22.8 20.9
Armenia Azerbaijan Belarus Georgia Kazakhstan Kyrgyzstan Rep. of Moldova Russian Federation Ukraine Uzbekistan Region wide – NIS Total NIS	0.1 0.4 3.2 42.0 14.5 3.0 4.8 103.0 22.2 11.6 36.5 240.3	0.3 0.3 3.2 0.4 1.1 0.0 1.3 17.7 11.7 8.4 0.0 44.5	0.0 63.4 1.0 18.0 0.0 0.0 1.4 94.6 22.8 67.5 0.0 268.8	0.4 64.0 7.4 60.4 15.6 3.0 7.5 375.2 56.7 87.4 36.5 714.2	0.1 8.5 0.7 11.1 0.9 0.7 1.7 2.5 1.1 3.8 2.6
Region CEE + NIS TOTAL	11.6 472.2	2.2 144.3	0.0 1937.4	13.7 3305.2	8.4

Preliminary data.
Totals are larger than sum of technical assistance and investments, as some donors did not classify commitments.
Former Yugoslav Republic of Macedonia.

Source: OECD, based on donor and IFI data.

Table 5. Foreign Direct Investment to CEEC/NIS:
The five main recipient countries

	FDI inflows 1996 (million US$)	FDI inflows per capita 1996 (US$)	Cumulative FDI inflows 1989-96 (million US$)
Czech Republic	1.264	123	7.120
Hungary	1.986	195	13.260
Poland	2.741	71	5.398
Kazakhstan	1.100	67	3.067
Russia	2.040	14	5.843
Total - 5 main reciept. countries	9.131	41	34.688
Total for all CEEC/NIS	12.330	31	43.888

Source: EBRD

Appendix 2: Key References

EBRD (1997), Transition Report 1997. EBRD, London.

OECD (1998), Pollution Abatement and Control Expenditures in OECD Countries. OECD, Paris.

OECD (1998, forthcoming), Pollution Abatement and Control Expenditures in Central and Eastern Europe. Document prepared by COWIconsult for the OECD/EAP Task Force Secretariat. OECD, Paris.

OECD (1998, forthcoming), Sourcebook on Environmental Funds in Countries in Transition (working title). Prepared by the EAP Task Force Secretariat in co-operation with EU’s Phare Programme. OECD, Paris.

OECD (1998, forthcoming), Swapping Debt for the Environment: The Polish EcoFund. Prepared by the EAP Task Force Secretariat in co-operation with EU’s Phare Programme. OECD, Paris.

Project Preparation Committee, (1998), PPC Report. Document submitted to the “Environment for Europe” Ministerial Conference, Arhus, June 1998.

Notes:

Annex C
Feature article in the Danish newspaper “Berlingske Tidende”,
November 5, 1998
Miljųdanmark, December 1998, vol. 12, no. 6
The United States of America cannot agree to the first two sentences in paragraph 11.
General reservation by Turkey.
Austria, Denmark, Iceland, Ireland, Italy, Latvia, Luxembourg, Norway and Sweden reaffirm their position that the use of nuclear energy in general should be phased out in the long term. This position is shared by Cyprus.
During the Conference, one more country reserved its position on the target date.
Canada and the United States of America strongly support energy efficiency as a major tool for reducing greenhouse gas emissions. They are firmly committed to continuing to increase energy efficiency. The endorsement of the Policy Statement on Energy Efficiency and the Guidelines on Energy Conservation in Europe would be inconsistent with a fundamental tenet of the Kyoto Protocol, to permit countries to meet environmental goals in accordance with national circumstances. Therefore, Canada and the United States of America cannot support paragraphs 31, 32 and 35.
Even though Turkey is not a signatory to the Kyoto Protocol, it has similar concerns to those of the United States and Canada. Therefore, it cannot support paragraphs 31, 32 and 35 either.
The United States of America welcomes and supports most elements of the Resolution on Biological and Landscape Diversity.
Germany is not able to sign the Convention at this Conference. The decision on the signature will be taken within the time provided in article 17 of the Convention. Therefore, Germany is not in the position to support paragraphs 40, 41 and 42. Azerbaijan, Turkey and Uzbekistan are in a similar situation.
General reservation by Armenia.
Reservation on the last sentence by Cyprus and Greece.
* Adopted by the Executive Body for the Convention at its special session at the Aarhus Conference on 24 June 1998.

[Front page] [Top]

Environmental Assistance to Eastern Europe Annual Report '98

Contents

Perspectives for Danish environmental assistance in Eastern Europe

Environmental assistance under scrutiny

Largest environmental conference in Denmark

Part of the “Environment for Europe” process

Results of former conferences – in a historical perspective

Ten items on the agenda of the Aarhus Conference

The Publicity Convention

NGO’s on the rostrum

Increased action in the NIS

Environmental financing

Two air pollution protocols

Phasing out leaded petrol

Recommendations for energy efficiency

The Pan-European Biodiversity and Landscape Strategy

Role of private enterprises

Importance to Denmark

DEPA’s follow-up on the assessment

Environmental Soft Loan Programme (MKŲ)

Stock-taking

Experience

Sector-integrated environmental assistance in the Baltic Sea region

Declaration

A. Preamble

B. The ECE region and The Global Environment

The State of The European Environment

C. Implementation of The Environmental Programme for Europe

Air Pollution Prevention

Strategy to phase out leaded petrol

Energy Efficiency[8],[9]

Pan-European Biological and Landscape Diversity Strategy

Public Participation and The Role of NGOs

D. Environmental Action Programme for Central and Eastern Europe (EAP)

Refocusing on the NIS

Environmental Financing and Economic Instruments

National Environmental Action Programmes (NEAPs)

Project Preparation Committee

Business and Environment

Regional Environmental Centres (RECs)

E. Future of the Environment for Europe Process

On the Phase-out of Added Lead in Petrol

Ministerial Declaration on Long-Range Transboundary Air Pollution

ENVIRONMENTAL FINANCING IN CEEC/NIS; CONCLUSIONS AND RECOMMENDATIONS

Background and Introduction

(i) CEEC/NIS Environmental Expenditures

(ii) External Environmental Aid and Finance

(iii) Foreign Direct Investment

(i) Enterprise Sector

(ii) Municipal Environmental Finance

(iii) National Budgets

(i) Environmental Funds

(ii) Environmental Funds Capitalised by Donors and IFIs

(iii) Mechanisms Established in Existing Financial Institutions

(iv) Support from EU Institutions

(v) Commercial Banks

(vi) Green Equity, Loan Guarantees, and Leasing

(vii) Global Environmental Financing Mechanisms

Environmental Assistance to Eastern Europe
Annual Report '98

Energy Efficiency^[8]^,^[9]