1. June, 2001GEF Int. Waters. Washington1 The Danube River and Black Sea GEF Financed Investment Program PRESENTER:Manuel Marino, Lead Water and Sanitation Specialist, World Bank CONFERENCE:International Waters Workshop - A CEO Dialogue Jointly Organized by GEF and WFEO/FIDIC LOCATION: Washington, DC, USA DATE:June 7-8, 2001 CONTACT: IW:LEARN 4211 N. Fairfax Dr. Arlington, VA 22207 USA Tel: +703-522-2190 Fax: +703-522-2191 info@iwlearn.org

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

3. June, 2001GEF Int. Waters. Washington3 What Do I Want to Tell You in 10 minutes? The purpose of the Partnership and the Investment Fund How we see the Impact of GEF grant funds Advances to date How we see the future

4. June, 2001GEF Int. Waters. Washington4 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 1990. –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)

5. June, 2001GEF Int. Waters. Washington5 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

6. June, 2001GEF Int. Waters. Washington6 The GEF/WB Partnership The GEF Council approves a $70 million Grant Fund in three tranches to finance incremental costs for nutrient’s reduction Projects in Pollution Reduction Programs of Danube and Black Sea Commissions –Waste Water Treatment Plants –Wetlands restoration –Agriculture Reform About 5-7 million US$ per project

7. June, 2001GEF Int. Waters. Washington7 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

8. June, 2001GEF Int. Waters. Washington8 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

9. June, 2001GEF Int. Waters. Washington9 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

10. June, 2001GEF Int. Waters. Washington10 Advances to Date Three Projects under Active Preparation –Rostov Wastewater treatment –Romania Agriculture Improvement –Bulgaria Wetlands recovery Several Projects Identified –Budapest, Sebastopol, Zagreb Wastewater –Gemenc (Hu), Romania, wetlands –Turkey agriculture Where is the Private Sector?

11. June, 2001GEF Int. Waters. Washington11 How can we Attract Additional Financing (Private Sector)? Consulting Companies –Changing From Clients to Partners – Identifying Business Opportunities –Identifying reforms needs that make trans- boundary investments sustainable Operators/Production –Grants mobilized by the credibility of GEF intervention –Investments feasible by grant contribution –Investments facilitated by reduction of risks –Investments accelerated by reforms brought by GEF Other you can Suggest?

12. June, 2001GEF Int. Waters. Washington12 THANKS FOR YOUR ATTENTION, READY FOR QUESTIONS, … and We have many questions too!

13. June, 2001GEF Int. Waters. Washington13

14. June, 2001GEF Int. Waters. Washington14 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

15. June, 2001GEF Int. Waters. Washington15 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

16. June, 2001GEF Int. Waters. Washington16 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

17. June, 2001GEF Int. Waters. Washington17 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

18. June, 2001GEF Int. Waters. Washington18 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