The Danube River and Black Sea GEF Financed Investment Program The GEF/WB Nutrient Reductions Partnership

October 2000GEF Int. Waters. Budapest2 The Environmental Challenge The Black Sea and the Danube River are facing a Potential Ecological Disaster from Nutrification –Ten fold drop in fish catches. From 26 to 6 viable species. Over $300 million/year decline from mid 1980s to –Loss of 10,000 km 2 of ecologically most valuable algae beds. Bloom of exotic species. Anchovy catches down 80% or 400,000 t/y –Tourism revenue losses (400 million $/year) and poor environmental conditions (over 20,000 water related illnesses). The severity of current degradation will be aggravated with the economic recovery A regional solution is required Despite knowledge and awareness, lack of financial resources to solve regional environmental problems (mainly in Black Sea)

October 2000GEF Int. Waters. Budapest3 The Solution Challenge: Translate Theory and Planning into Action Mobilize Investment Funds and Translate Regional Priorities into National Investment Plans Strategic Intervention with Grants, Externally Funded Develop Policies –Nutrient’s market, cost sharing formulas, etc. Further Knowledge Development –Monitoring and evaluation, New Emerging Challenges Further Awareness. Public Outreach

October 2000GEF Int. Waters. Budapest4 The GEF/WB Partnership The GEF Council approves a $70 million Grant Fund on a one time basis to finance incremental costs for nutrient’s reduction Projects in Pollution Reduction Programs of Danube and Black Sea Commissions –Waste Water Treatment Plants –Wetlands restoration –Agriculture Reform About 5 million US$ per project

October 2000GEF Int. Waters. Budapest5 The GEF Program The Instrument to Pass from Planning into Action Priority Investment Projects Identified by the Danube River and Black Sea Regional Programs Danube Commission’s Regional Project Black Sea Commission’s Regional Project GEF/WB Partnership for Nutrient Reduction

October 2000GEF Int. Waters. Budapest6 Characteristics of the World Bank/GEF Partnership Predictable and easy access by countries to a pre-approved envelope of GEF grant funds Grant funds used to attract co-financing Simple eligibility criteria responding to regional priorities Streamlined processing by GEF Opportunistic/Competitive selection

October 2000GEF Int. Waters. Budapest7 Impact of Declaring a GEF/ World Bank Partnership Sends signal to governments that grant money is available GEF/Bank Partnership will help steer co- financing by others to nutrient reduction objectives of the Partnership Would catalyze private sector interest and action A model arrangement with GEF; other regions may follow

October 2000GEF Int. Waters. Budapest8 READY FOR QUESTIONS, THANKS FOR YOUR ATTENTION, … and NOT FALLING ASLEEP!

October 2000GEF Int. Waters. Budapest9 Substantial Progress by the Work of the two Commissions There is an Assessment of the Situation –Identified Possible projects –Defined Regional Priorities Awareness has been Raised –Mobilized support –Mobilized funding Developed Cooperation among Countries –Commission/Secretariat functioning and funded –Pollution reduction targets established However, Limited Investments until Now

October 2000GEF Int. Waters. Budapest10 Large Benefits of the Investment Programme Total investments identified of 1.9 B$ Very conservative cost-benefit analysis yields a 23-76% ERR Needed to reverse degradation associated to expected economic recovery Partnership would leverage additional investments and help catalyze the Full Investment Program

October 2000GEF Int. Waters. Budapest11 Commitment from WB Management Maintain Bank’s role in Regional Programs Support for awareness raising of Black Sea/Danube problems Readiness to play a central role in a Regional Investment Program Mandate to work with other IFIs and pass on GEF funds when applicable

October 2000GEF Int. Waters. Budapest12 World Bank’s Role Finance Priority investments at National Level Demonstrate to National Governments the Benefits of Participating in Regional Programs Help seek international financing to support these countries combat pollution in regional hot spots Together with the UNDP, the EU and other IFIs, help develop the framework for a coordinated action with other regional activities The EU is the appropriate institution to play the leading role in mobilizing political support

October 2000GEF Int. Waters. Budapest13 Who adds what to the Partnership Political leadership: comes from the countries, through both Commissions, and the EU Bank would: –provide support in assessing investment priorities and policy reforms as part of our country dialogue. –directly finances high priority investments. –convenes regional actors –attracts and leverages other sources of financing. UNEP/UNDP would provide support to the Commissions GEF would provide Grant funds and adm. budget Countries, Donors, IFIs would bring add. financing