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Implementing Financing Strategies for Water and Environmental Infrastructure
In the previous work programme on environmental finance, a methodology and a computer-based model – FEASIBLE – were developed and applied in several EECCA countries with the aim of preparing realistic financing strategies. With substantial support by the Danish government, the model was applied to the urban water supply and sanitation, and subsequently, to the solid waste management sectors.
Environmental Financing Strategy (EFS) is a standardised methodological framework supported by a computer model to prepare realistic multi-year implementation programmes for those environmental sectors that require investment-heavy public infrastructure. This methodological approach targets medium and large countries/regions where central planning and micro-management of project-specific pipelines of investments are neither feasible nor desirable. The standardised methodological approach to financing strategies, developed within the framework of the EAP Task Force, is tailored to the needs of public sector officials from the ministries in charge of the environment and other national or regional government authorities responsible for environmental and water infrastructure. The methodology and computer tool’s can be download here.
Until now, five EECCA countries (Armenia, Georgia, Kazakhstan, Moldova and Ukraine) and six regions (Kaliningrad, Novgorod, Pskov, Rostov and Yaroslavl in Russia, and Eastern Kazakhstan) have (for the first time) systematically calculated expenditure needed to operate, maintain, rehabilitate and develop urban water, sanitation and municipal waste infrastructure. Using the FEASIBLE model, these expenditure requirements were systematically compared with available sources of financing. Additional financial needs were quantified, and realistic, affordable measures to mobilize necessary finance were identified. All reports are available here. Thus, EECCA countries have acquired a practical tool which could help them develop realistic, strategic investment and financial plans for the governments managing transition from centrally-planned to a market economy. Lessons learned from these experiences have been synthesized in a Policy Brief.
The focus of the new 2004-2006 Work Programme on environmental finance is placed on implementation of already developed financing strategies in the water sector. More experience with preparing financing strategies for the municipal solid waste sector will be generated. In addition, the FEASIBLE model is envisaged to be further expanded to cover water supply and sanitation in rural areas as well as the district heating sector. While the model is designed to explicitly account for the ability to pay at both national and household levels, more work will be done to calculate the willingness-to-pay for municipal services. In this context, the major activities envisaged in the new Work Programme, include:
• Deriving Rural Water Supply and Sanitation Cost Functions for EECCA (English, Russian)
• Implementing Financing Strategies for Water and Environmental Infrastructure (English, Russian)
• Lessons Learnt from the Financing Strategies for the Municipal Solid Waste Sector (English, Russian)
• Training of EECCA Experts in Strategic Investment and Financial Planning of Large-Scale Infrastructure Development (Applying Computerised FEASIBLE Model) (English, Russian)
For more information on the individual activities, with their objectives, specific tasks, outputs and benefits, please click on the respective link. In addition, you may contact Alexander MARTUSEVICH at alexandre.martoussevitch@oecd.org
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