Project Preparation Committee Project Financing Workshops Olga Troitskaya (ot@cowi.ru) Promoting Russia Country Dialogue on Sectoral Policy in WSS regarding financing municipal water and environmental Infrastructure Joint Minregion/Rosstroy – OECD Event Moscow, 01-02 June 2006

Content Purpose of Project Financing Workshop Tasks of PFW Learning objectives of PFW and target group Content of PFW Two tools developed PFW Agenda PFW implementation in 2006 Overall objective of the presentation is to provide information on PFW, its purposes and tools for learning, learning objectives, target group, agenda, organisation and methods

Project Financing Workshops: purpose (I) The Project Preparation Committee (PPC) has been involved in the identification and preparation of environmentally-related investment projects since 1993 PPC experience has shown that one of the main barriers to accessing project finance is the ability of municipalities to prepare project concepts that provide all the information required by financial institutions

Project Financing Workshops: purpose (II) The PPC is implementing a programme of Project Financing Workshops (PFW) designed to: reduce the time needed to initiate and prepare a project concept facilitate and enhance communication between project proponents and financial institutions Expectations of PPC: by the end of the workshop participants will be able to prepare a sound project financing concept ready for discussion with IFIs, donors and commercial banks in the format and structure acceptable to those financing institutions.

Objectives of the PFW To introduce the project financing options available for municipal, environmentally oriented, financially viable stand alone investment projects and also… … to provide an overview of the IFIs To mention the barriers for establishing a constructive dialogue between municipal project proponents on one side and IFIs and donors on the other side and… … to highlight two tools aimed at facilitating this dialogue What to be done during the Workshop

PFW in EBRD Project Cycle Identification Concept Clearance/Preparation Appraisal Negotiations Implementation Evaluation PF Workshop While preparing the concept one should consider and remember all stages of the Project Cycle. Good project concept is a starting point for a sound and reasonable investment project. It basically guides the future process. If good it saves time and decreases risks It is also important that project financing options should be dealt with at all stages of the project cycle, also at the initial stages

Training Objectives Knowledge: to know specific information on IFIs& donors, financing options available and their applicability Skills: to use tools developed to facilitate a constructive dialogue with an investor/donor, increased capacities to prepare sound and acceptable project concept Attitude: to be better prepared to communicate with IFIs & donors to justify the project; overcome the barriers What to reach through training session during 2 days regarding the participants’ capabilities

Participants and types of projects targeted Participants: representatives of municipal or other sub-sovereign investment project proponents in EECCA and (non-accession) SEE Projects: municipal, environmentally oriented, financially viable stand-alone investment projects for which co‑financing from IFIs, donors and/or commercial banks is sought Typically, representatives of around six municipalities will be invited per country workshop, with a mix of staff from municipalities and public utilities

PFW participants (I) Up to 12 participants representing 4-6 municipalities Project proponents – at least 2 from each municipality, one – from municipal utilities, another – from local/regional administration Preparation to workshop is needed (home- work)

PFW participants (II) Project proponents – the authors of elaborated investment project ideas Who received 3 weeks before workshop pre- workshop information and Task Pack Who thoroughly read the Task Pack and filled in the Project Concept Data Sheet (in draft) Self committed to work hard during 2 days

PFW – Two Tools Project Concept Data Sheet Action Plan

PFW – Project Concept Data Sheet (I) Provides the proponent with a tool assisting in presenting a project concept in a way, which facilitates a constructive dialogue with IFIs and donors It is comprehensive and includes all major aspects required for project identification by IFIs and donors

PFW – Project Concept Data Sheet (II) PCDS consists of 6 sections Key project information Long-term planning Socio-economic data Current service data Key financial data Supplementary project information Explanatory notes are attached Participants are provided with explanatory notes on filling PCDS and the example for WS project as well

PFW – Action Plan (I) Provides you with a tool assisting you in moving your project concept further during the next 6 months Key question to answer: What to do in order to get full support from municipal, regional and national authorities?

PFW – Action Plan (II) Structure is very simple Structure is simple. Three columns, two parts

PFW – Plenty of barriers On both sides of the table to get into constructive dialogue Types of barriers - in the eyes of IFIs and donors Attitude (project ownership and organisation culture) Knowledge of IFIs and donors Financial issues Risk management Institutional and organisational issues Types of barriers - in the eyes of applicants – speak out opinion Workshop aims to help project proponents and IFIs overcome these barriers Workshop discusses both views on barriers: Participants are given with a chance to present their point of view Facilitators (or representatives of IFIs) will present major barriers in the eyes of IFIs ad donors

PFW - Agenda 2 training days with coffee-breaks and lunches Day 1 is devoted to presentation of project financing options, IFIs, discussion of ‘home- work’ (prepared draft Project Concept Data Sheet), presentation of case-study Day 2 is devoted to discussion of main barriers in eyes of participants and IFIs, group work on Action Plan and two business plays

PFW – Training methods Participatory approach with high level of participant involvement Presentations, group work, business plays Case study

PFW – Case-Study Host institution and local IFIs representatives are welcome to suggest case study for each particular workshop To demonstrate experience – better positive (best available experience in the region), if negative then – major reason for failure Major reasons for success (best case study) to demonstrate: Creditworthiness of the city Political will and readiness for reforms City financed feasibility study itself Project has impacts on the whole reform process

PFW: implementation in 2006 Workshops are already planned for summer-autumn 2006 Georgia, Armenia, Moldova Russia (Volgograd oblast) Ukraine

PFW: coordination Workshop is implemented by 2 trainers-facilitators Close working coordination with PPC Executive Secretary IFIs (EBRD, WB and others) will be involved in workshop planning and implementation Strong commitments from the country host organisation: - draft list of participants - venue for workshop and 4-6 PCs - formal invitations for participants - practical arrangements (logistics) - technical support during training