Danish - Lithuanian Environmental Co-operation 1991-2000
Chapter 1
The Danish support for improving the environment in Central and Eastern Europe
Since 1991, Denmark has supported Central- and Eastern Europe in the effort of improving the current state of the environment and to avoid degrading of the future environment. Through a serie of co-operative environmental programmes, Denmark has donated more than DKK 3.1 billion (EUR 0.42 billion) in environmental assistance to the Central- and Eastern European Countries.This makes Denmark one of the largest donor to environmental improvement in Central- and Eastern Europe. The environmental effects of the more than 1200 Danish projects are substantial. EU accession and fulfilment of Environmental EU legislation and requirements are given high priority in the DANCEE programme, especially in EU applicant countries.
Denmark adopted its first law on environmental support to Central- and Eastern Europe in 1991. Today, more than 1200 environmental projects have been initiated in more than 13 Central- and Eastern European countries. It has become part of Denmark's international policy to be in front of the global battle for protection of the environment. In 1992, the UN Conference on Environment and Development in Rio formulated the strategy of sustainable development: That environmental concerns must be integrated as an equal element in development projects and in development processes in general.
The Danish environmental assistance policy is based on the knowledge that environmental problems cannot be isolated nationally. What others are doing has an impact on us and vice versa. By helping others, we are helping ourselves. This is especially true in relation to nations which share a common sea - the Baltic - and to some extent the ambient air. Therefore, the Danish environmental assistance to Central- and Eastern Europe has mainly been directed towards the countries around the Baltic.
The Danish Environmental Objectives and Priorities
Denmark's environmental assistance policy in Central- and Eastern Europe is carried out through different programmes and agencies. The main programme, adminstered by the Danish Environmental Protection Agency, is the Danish Co-operation for Environment in Eastern Europe - DANCEE.
In terms of geography, the DANCEE programme covers the following areas:
 | EU candidate countries in the Baltic Sea Region and Russia |
| Selected EU candidate countries in Centraland South Eastern Europe |
| Selected CISs (countries) |
| The Balkans |
The general objectives for DANCEE are:
| Support the Central- and Eastern European EU accession countries in their efforts to implement the EU's requirements in the field of environmental protection and those of international environmental conventions; |
| Contribute to the political and economic development in the direction of environmental sustainability; |
| Promote the use of Danish environmental expertise and technology for the benefit of the areas covered by the DANCEE support programme. |
The main five target areas by sectors are:
| Water management |
| Air quality |
| Solid and hazardous waste management |
| Chemicals |
| Biological diversity and sustainable forestry |
Three cross cutting issues are prioritized in the DANCEE programme:
| Institutional strengthening and EU accession. |
| Public participation in decision making |
| Involvement of the private sector |
DANCEE's support is directed according to a list of priorities and bilaterally agreed country programmes.
The DANCEE projects take two forms. The first is the investment projects which typically include support for project design, construction and supply of equipment. The second is the technical assistance projects which include areas as planning and analysis, monitoring, feasibility studies and institutional strengthening.
The Danish Project Criteria
The selection of environmental projects is based on the objectives and priorities mentioned above, but other considerations also play an important role.
A central criterion for the selection of DANCEE projects is the demonstration value. Most Central- and Eastern European countries are in a period of restructuring and development of the economy, and projects which demonstrate both the environmental and economic effects of using new technologies are therefore given high priority. In the same manner, projects of general interest and utility, possessing the potential for being replicated are given preference.
A second criterion is the requirement for cofinancing. The funding is required as a means for promoting self-support, and it is therefore normal that the recipient country provides most of the funding for the project. The principle of financial participation secures the involvement by the beneficiary as well as the continuity of the project.
It is a key criterion that the support conforms to the requirements of the environmental legislation in the country. It is, of course, also of vital importance that the project actually brings about reduction of pollution. Projects showing a significant quantitative and/or qualitative improvement of the environment and health standards are therefore given high priority.
Finally, environmental problems are not only about reducing pollution, they are just as much about conservation of raw materials, energy, water and the protection of natural resources. This perspective is very important in the fast developing Central- and East European economies. Therefore, DANCEE has focused on pollution prevention, conservation, cleaner technologies and recycling, rather than on the reduction of existing pollution.
Danish environmental assistance programmes
There are several Danish environmental assistance programmes for Central- and Eastern Europe. The main programme is the Danish Co-operation for Environment in Central- and Eastern Europe (DANCEE) formerly called the Danish Environmental Support Fund for Eastern Europe (DESF). The programme is administered by the Danish Environmental Protection Agency (DEPA).
The sector-integrated environmental assistance focuses on special areas or issues and involves different Danish ministries and agencies. Since 1998, this kind of assistance has been part of the Government's Baltic Sea Initiative within the environment sector.
The Green Investment Facility is part of the Investment Fund for Central- and Eastern Europe (the MIØ Fund).
The Environmental Soft Loan Programme for Eastern Europe (MKØ), administered by the Danish State Export Credit Agency (EKF) in cooperation with DEPA.
The central co-ordinator and administrator of the programmes is DEPA. DEPA prepares the guidelines on the environmental approach and discusses the sector programmes with the various ministries and agencies which then implement them.
Denmark has donated more than DKK 3 billion (EUR 0.4 billion) to environmental assistance to Central- and Eastern Europe in the years 1991- 2000. The Danish support has again generated the co-financing of more than DKK 10 billion (EUR 1.3 billion), making the total financial value of the Danish launched project as much as DKK 13 billion (EUR 1.75 billion).
Environmental programmes for Central- and Eastern Europe
The DANCEE and the sectorintegrated environmental assistance are presented elsewhere. Therefore, only the Environmental Soft Loan Programme for Eastern Europe MKØ) and the Green Investment facility (the IØ Fund) is mentioned here. In 1998, the Danish Environmental Soft Loan Programme was established with the purpose in promoting investments in environmental projects in Eastern and Central Europe by means of longterm, subsidised credits. The programme is established and managed by Eksport Kredit Fonden (EKF), jointly with the DEPA.
The Danish Soft Loans are funded by annual subsidy grants on the Finance Act. At present, the programme can arrange about DKK 180 million (EUR 24.17 million) annually with a total donor element of about DKK 60 million (EUR 8.06 million). They are typically granted through banks by direct loans to the buyers in the recipient countries. The subsidies are granted by EKF's paying a financing subsidy of typically 25 per cent of the financed amount for the purpose of softening the conditions of repayment for the borrower.
The Danish Soft loans may be used mainly to finance environmental projects within alternative energy, water, waste management, waste treatment, and district heating. Normally, the projects must amount to more than DKK 20 million (EUR 2.69 million) in order to be eligible for soft loan support. Potential project recipients in the Central- and Eastern European countries, consultants and suppliers may apply for the support under the programme by submitting project proposals to the Danish Environmental Protection Agency, DEPA.
Another environment-related sectoral assistance programme is the Green Investment facility under the Investment Fund for Central and Eastern Europe, the IØ Fund. The fund promotes private sector co-operation between Denmark and recipient countries for projects, which also have environmental benefits.