Danish-Polish Environmental Co-operation 1991-2000
Chapter 2
Helping Eastern Europe - and ourselves
| The Danish Environmental Assistance |
Danish environmental assistance
Since 1991, Denmark has supported Eastern Europe in solving the serious environmental problems caused by the politics of the former regimes of the East bloc countries. Through a series of cooperative environmental programmes, Denmark has donated more than DKK 3 billion (USD 0,34 billion) in environmental assistance to the Central and Eastern European Countries. The environmental effects of the 1200 Danish projects are tangible and has helped to prove that environmental concerns can go hand in hand with social and economic development. Today, an important objective of the Danish environmental assistance is to help a number of Eastern European countries to fulfil the environmental requirements for the EU accession.
There are several reasons why Denmark plays a leading role in the environmental assistance to Eastern Europe. Denmark has long been preoccupied with environmental problems and set up its Ministry of Pollution Control, today called the Ministry of Environment and Energy, already in 1971. Compared to other countries, this was early. Thirty years of experience has given Denmark a valuable know-how that can now be offered to other nations.
Having the know-how, it has become part of Denmark's international policy to be in front of the global battle for the 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. Denmark supports the strategy of sustainable development and has committed itself to gradually increase its total budget for environmental and disaster assistance until 2005, when it reaches the level of 0.5% of the Danish GDP. At present, Denmark is running environmental assistance programmes in a number of developing countries, in the Arctic and in 13 Eastern European countries.
Finally, 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 the nations who share a common sea - the Baltic - and to some extent the ambient air. Therefore, the Danish environmental assistance to Eastern Europe has mainly been directed towards the countries around the Baltic.
The Danish environmental objectives and priorities
The Danish environmental assistance to Eastern Europe has its overall focus on a number of areas. These are the Baltic Sea Region, EU accession, the implementation of the international conventions and the strengthening of environmental awareness in the countries. In the new strategic plan for 2001-2006, an increasing effort is put on the Newly Independent States (NIS-countries) in order not to create a 'silver curtain' between these countries and the countries on their way to the EU.
Denmark's environmental assistance policy in Eastern Europe is carried out through different programmes and agencies. The main programme is The Danish Co-operation for Environment in Eastern Europe - DANCEE.
The overall objectives for DANCEE are to:
 | make the greatest possible contribution to the protection of the environment in Eastern Europe by supporting the Eastern European countries that have applied for EU membership in their efforts to implement the EU's demands in the environmental area and those of international environmental conventions, |
| help the CIS countries and other non-EU preaccession countries in their approach to an enlarged EU and to reduce the pollution which has a harmful impact on the health of the public; reduce the cross-border pollution that has an impact on the EU countries; protect nature and biodiversity and implement international environmental conventions. |
| help to ensure that political and economic developments move in the direction of environmental sustainability, especially by supporting market-based development and the promotion of democracy, also including encouraging a sense of responsibility in the private sector, involving the public and NGOs in decision-making processes in the environ mental area, and increasing the integration of environmental considerations in other sector policies, |
| promote the use of Danish environmental expertise and technology for the benefit of the areas covered by this programme. |
DANCEE's support is directed according to a list of priorities. These are: Water pollution, air pollution, solid and hazardous waste, biological diversity and sustainable forestry, institutional strengthening and EU accession.
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 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 DANCEEprojects is the demonstration value. Most 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 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 to Eastern Europe.
| As mentioned, the main programme is the Danish Co-operation for Environment in 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 focus 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). |
| Finally, there is the Environmental Soft Loan Programme for Eastern Europe (MKØ), administered by the Danish State Export Credit Agency (EKF) in co-operation with DEPA. The central co-ordinator and administrator of the programmes is DEPA. DEPA prepares the guidelines on the environmental approach, discusses the sector programmes with the various ministries and agencies which then implement them. In the figure below, the distribution of environmental assistance is shown within the different programmes. |
Denmark has donated more than DKK 3 billion (USD 0,34 billion) to environmental assistance to Eastern Europe in the years 1991-2000. The Danish support have again generated a cofinancing of more than DKK 10 billion (USD 1,23 billion), making the total financial value of the Danish launched projects as much as DKK 13 billion (USD 1,5 billion).
Environmental programmes for 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 a purpose to promote investments in environmental projects in Eastern and Central Europe by means of long-term, 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 (USD 21 million) annually with a total donor element of about DKK 60 million (USD 7 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 (USD 2,3 million) in order to be eligible for soft loan support.
Potential project recipients in the 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 is designed to help to improve the environment in Central and Eastern Europe by cofinancing joint venture projects in the private sector of particular relevance to the environment. The programme is administered by the IØ Fund and DANCEE is consulted on the environmental aspects of the projects.
Grants to environmental assistance in eastern europe from 1996 to 2000