The Environmental Challenge

1. The Danube River and Black Sea GEF FinancedInvestment ProgramThe GEF/WB Nutrient Reductions Partnership

2. 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 km2 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) GEF Int. Waters. Budapest

3. The Solution Challenge:Translate Theory and Planning into ActionMobilize 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 GEF Int. Waters. Budapest

4. 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 GEF Int. Waters. Budapest

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

6. Characteristics of theWorld 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 GEF Int. Waters. Budapest

7. 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 GEF Int. Waters. Budapest

8. READY FOR QUESTIONS, THANKS FOR YOUR ATTENTION, … and NOT FALLING ASLEEP! GEF Int. Waters. Budapest

9. 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 GEF Int. Waters. Budapest

10. 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 GEF Int. Waters. Budapest

11. 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 GEF Int. Waters. Budapest

12. 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 GEF Int. Waters. Budapest

13. 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 GEF Int. Waters. Budapest