1. Tenth meeting of the EAP Task Force’s EECCA Environmental Finance Network Environmental Financing Trends in South Eastern Europe Joanna Fiedler Senior project manager Environmental financing

2. www.rec.org Outline Introduction to the report, status of work; SEE region context; Key messages; Domestic environmental expenditures; International flows to environment; Financial mechanisms in use.

3. www.rec.org Introduction to the report Category II document for Belgrade Ministerial conference. Follow up to the “Environmental financing trends report” for Kiev conference http://www.rec.org/REC/Programs/SofiaInitiatives/Enviro. Finance.in.CEE.pdf http://www.rec.org/REC/Programs/SofiaInitiatives/Enviro. Finance.in.CEE.pdf The main goal of the report is to propose recommendations for decisions-makers in the region so that they could take action and ensure more environmental funding schemes and resources for environmental actions.

4. www.rec.org Major economic and environmental trends which were influencing the situation on environmental financing in the SEE between 2001 and 2005; Presenting trends in domestic environmental expenditures in the SEE; Analyzing international financing flows to the region including bilateral and multilateral sources; Analyzing established and emerging financing mechanisms in the region and their development potential in the future; Identifying new possible financing mechanisms which could be developed in the future; Providing recommendations to decision makers on improving effectiveness of environmental financing from both domestic and external financing sources.

5. www.rec.org Trends in bilateral donors commitments Source: OECD DAC data base

6. www.rec.org Recipients of assistance Source: OECD DAC data base

7. www.rec.org Preliminary trends in assistance Source: OECD DAC data base

8. www.rec.org Importance of different sources of finance for infrastructure projects over the time

9. www.rec.org Key messages Environment low on political agenda on central and local levels Decentralisation process not supported by allocation of fiscal means Low level of domestic financial resources for environment EU role is increasing, bilateral donors role decreasing, IFIs – struggling (borrowing legislation) Important role of economic instruments

10. www.rec.org Key messages Potential for innovative financial mechanisms (private sector, carbon finance etc) Presenting environmental projects as contributors to growth and employment Creating favorable conditions for borrowing, Important role of capacity building and technical assistance Assistance needed on project preparation Need for diversification of sources of finance

11. Thank you for your attention Joanna Fiedler Senior project manager Environmental financing and economic instruments Environmental Policy Programme Regional Environmental Center for Central and Eastern Europe jfiedler@rec.org