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Following the November 2000 workshop on environmental financing the OECD, in co-operation with the State Environmental Protection Administration (SEPA) and the Chinese Research Academy of Environmental Sciences (CRAES), launched a project to assist China in developing an environmental financing strategy (EFS) in the urban water supply and sanitation sector for implementation within the framework of China's 10th Five-Year Economic and Social Development Plan.
The project analyses financial viability and affordability and aims to device a realistic strategy to finance the development of the wastewater treatment infrastructure in the Sichuan Province, in the area that will have impact on the water quality in Three Gorges Dam (up to 26 municipalities at the prefecture level). The project uses a methodology developed at OECD which includes an interactive computer model to simulate in quantitative terms the consequences of different policy choices.
SEPA found the computer-aided methodology for water sector financing strategies particularly useful as it assesses the investment costs of achieving specific environmental goals, compares these with current expenditure levels and sources of finance and analyses the resultant "financing gap". The EFS helps decision-makers to assess how to use the limited public sector funds to mobilise financing from private and foreign sources and help to establish a continuous dialogue between the Environment Ministries, Health Ministries, Ministries responsible for urban water infrastructure and the Ministries of Finance and Economy.
Read the final report: Financing Strategy of the Urban Wastewater Sector in Selected Municipalities of the Sichuan Province in China
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