Slovenia: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
ANNEX 1
LOGICAL FRAMEWORK
Hierarchy of Objectives Key Indicators Means of Verification Critical Assumptions
Project Goal
Reducing trans-boundary
water pollution in the
DRB.
Aggregate total of
emissions of nutrients
and priority substances
from point sources in the
DRB declines.
National/EU/ICPDR/DRP
reports on water
emissions in the DRB.
Project Purpose Key Indicators Means of Verification Critical Assumptions
Reduction of industrial,
municipal and agricultural
point-source water
pollution (nutrients and
toxic substances) in
Slovenia.
Demonstration of project
concept based on financial
intermediary/private
sector partnership in
pollution reduction.
Total volume of
emissions reduction from
projects financed by the
Credit Facility.
Number of projectsupported
companies and
municipalities assisted in
achieving compliance
with national/EU
legislation on water
pollution in Slovenia.
Number of similar
financing facilities
created in Slovenia and
other DRB countries.
Project progress,
evaluation and
completion reports.
National/EU/ICPDR/DRP
reports on water
emissions in Slovenia.
National/EU/ICPDR/DRP
reports on progress
towards compliance with
EU acquis.
Gains in the emission
intensity of industrial
operations are not offset
by the overall increase in
industrial activity (and
improvements in
municipal wastewater
treatment are not offset
by population growth).
DRB governments’
continued commitment to
protecting the river basin
and implementing related
policies.
DRB governments’
continued commitment to
maintaining an attractive
climate for private
investments.
Complementary national
and regional programmes
to address diffuse
pollution, wetlands
protection, awarenessraising,
capacity-building,
etc. are implemented.
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
2
Outputs Key Indicators Means of Verification Critical Assumptions
Increased investments in
water pollution reduction
in Slovenia.
Early compliance by
borrowers with
national/EU water
pollution legislation.
A wide range of water
pollution reduction
technologies
demonstrated.
Increased participation of
local FIs in financing and
risk sharing of water
pollution investments.
Enhanced awareness of
the project and its results.
Number and volume of
loans from the Credit
Facility.
Number of borrowers
achieving emission
standards/conditions
before deadlines.
Number of technologies
used in the investments
financed from the
Facility.
Number of FIs
participating in the
Credit Facility.
Number of visitors on
Project website; number
of responses to
information
requests/comments.
Lending reports of
participating FIs.
Progress reports.
Progress reports.
Progress reports.
Progress reports.
Enhanced availability of
financing for water
pollution reduction in
Slovenia leads to
increased investments in
water pollution reduction.
Investment in water
pollution reduction
reduces emissions of
nutrients and/or toxic
substances from the plant
concerned.
Demonstration of
technologies leads to their
increased adoption
through increased user
confidence and cost
reductions.
Participation of local FIs
in the project will lead to
increased awareness of
the opportunities of
lending for water quality
projects.
Dissemination activities
lead to replication of
project approach in
Slovenia and other DRB
countries.
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
3
Activities Project budget (USD,
000)
Means of Verification Critical Assumptions
Component 1. Credit
Facility
Establishment of the
Credit Facility;
Presentation of loan
applications by subborrowers;
Review of loan
applications against
environmental and
financial eligibility
criteria;
Disbursement of loans
and subsidies;
Environmental and
financial monitoring,
reporting and
evaluation.
Component 2. Technical
Assistance
Environmental Expert
Technical assistance
and training
Marketing
Information
dissemination
US$ 9,000
US $907
Disbursement and audit
reports.
Disbursement and audit
reports.
Local FIs provided with
sufficient incentives to
participate in the Credit
Facility and make full use
of its resources.
Borrowers provided with
sufficient incentives to
invest in water pollution
reduction (existence and
enforcement of emission
standards, effluent
conditions, wastewater
tax, etc.).
Existing supply of
financing for water
pollution reduction
insufficient to meet the
demand.
EBRD and local FI
general loan terms and
conditions acceptable to
borrowers.
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
4
ANNEX 2
DETAILED PROJECT DESCRIPTION
INTRODUCTION
1. The European Bank for Reconstruction and Development (EBRD) in co-operation
with the Global Environment Facility (GEF) plans to initiate a project to contribute to the
reduction of trans-boundary water pollution in the Danube River Basin (DRB). The specific
objectives of the project are to:
(i) support the reduction of nutrients and toxic substances discharged by industrial,
municipal and agricultural polluters in the Slovenian portion of the DRB, and;
(ii) develop and demonstrate an innovative concept of financial intermediary/private
sector partnership in water pollution reduction, with a view to facilitating its
subsequent replication elsewhere in the DRB.
2. These objectives will be accomplished through the creation of a subsidised credit
facility (the “Facility” or “CF”) to be channelled through local Slovenian financial intermediaries
(the local banks or FIs) in Slovenia with the aim of financing investments that reduce water
pollution in the DRB. The CF will be supported by a Technical Assistance (TA) component.
3. This annex presents a detailed description of the project’s two components, Credit
Facility and Technical Assistance. The Credit Facility is the project’s main component. It will
provide subsidised loans through local banks to industry, smaller municipalities, and livestock
farms in Slovenia for the implementation of water pollution reduction projects. The TA
component will support the implementation of the CF through providing: (i) environmental expert
advice to participating banks; (ii) technical advice and training to potential sub-borrowers; (iii)
marketing; and (iv) information dissemination activities. The other activities that would be
expected to be included in a national GEF project which addresses water pollution are being
supported through ICPDR and GEF regional initiatives (see Attachment 2 accompanying the
Main Document).
PROJECT COMPONENTS
Component 1. EBRD/GEF Environmental Credit Facility (Total: US$ 54.0 million; GEF:
US$ 9.0 million; EBRD US$ 45.0 million)
4. Under the EBRD/GEF Environmental Credit Facility, the EBRD would establish a
credit facility where local financial institutions will work as intermediaries to channel money to
private sector companies and smaller municipalities planning to undertake investments to reduce
water pollutants entering the Slovenian portion of the Danube River. The involvement of local
private FIs is crucial to the success of the project given that (i) EBRD is unlikely to directly
finance projects less than US$ 5 million and cannot therefore reach the target clients; and (ii)
through their existing client base, extensive branch network, and their marketing capabilities,
local banks are capable of reaching a large number of potential borrowers in the country.
5. In direct response to the estimated demand from Slovenian industrial and municipal
sectors for the financing of water pollution reduction investments, the overall size of the Facility
is proposed to be approximately US $ 54 million. This amount is based on the Demand Study
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
5
completed by the Business Advisory Service (BAS) programme in Slovenia in July 2002 (see
Annex 6). EBRD’s total commitment for the CF will be approximately US $ 45 million, which
will be blended with a US $ 9 million GEF grant. Under the Facility, EBRD will offer credit lines
to commercial banks in Slovenia (“the local banks” or “FIs”) which will then on-lend funds to
private entities in the industrial sector, smaller municipalities and large livestock enterprises (the
“sub-borrowers”) for investment projects (the “sub-projects”). The Facility will be demand-driven
and EBRD funds will be allocated to local banks on a “first come first serve” basis. Following the
internal approval process at the EBRD, it will sign loan agreements with each participating local
bank.
6. Funds will be available under the Facility for drawdown for 2 years from the signing
of the loan agreement. During the two years local banks will draw down the funds in accordance
with the terms agreed in the loan agreement and use the proceeds to finance eligible subprojects.
There will be an interest charge on all amounts drawn down by the local banks whilst a
commitment fee will be charged on the amounts committed but not drawn down. It is expected
that EBRD loans to participating local banks will have a maturity of between 5 and 7 years with a
2 years grace period and equal repayments following the grace period.
7. The proceeds of the GEF grant funding would be used to:
(i) subsidise loans to local private companies and smaller municipalities to undertake
water pollution reduction projects before the legislative deadlines, and projects that
reduce emissions beyond national requirements and/or demonstrate innovative
technologies to reach these objectives (see Annex 5); and
(ii) provide incentives to FIs to participate in this project. Incentives are required
because the FIs are being asked to embark upon a new financing instrument and
activities, which they would not undertake, purely on their own.
8. It is expected that the sub-borrowers will receive two thirds of the grant funding made
available by the GEF whilst the participating banks will receive one third.
9. FIs would receive a yearly subsidy in the form of a reduction in the interest rate,
which would be applied to the portfolio of sub-loans extended to eligible sub-borrowers. In
addition, banks would receive a one-time payment upon successful completion of the sub-project.
It is anticipated that the mechanism of charges and incentives will positively encourage
participating FIs to lend money from the facility.
10. The subsidy to borrowers would be awarded as a cash advance/lump sum payment
upon successful completion of the sub-project, i.e. when the technology is in place. The subsidy
would be released only when the borrower can demonstrate that pollution reduction objectives
have been achieved and when the EBRD and the local bank have received a satisfactory
monitoring report (“project completion test”) from the Environmental Expert. An advantage of
this approach is the incentive created for the borrower to comply with the commitment of
pollution reduction.
11. The approach will be finalised in negotiations between EBRD and FIs prior to project
effectiveness.
12. In order to foster portfolio diversification, the availability of, and access to, the CF
will be advertised through a number of different routes across different sectors. Potential
marketing routes include participating FIs, TAM/BAS programme, trade associations, and the
Chamber of Commerce. FIs will offer loans targeting different enterprises defined by size, sector,
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
6
level of wastewater pollution, etc. Pricing of the CF will be determined by EBRD for individual
local banks based on credit risk. The level of subsidy will be the same for each bank. All FIs will
be required to meet and maintain EBRD’s standard financial performance criteria and must
comply with corporate governance and transparency standards. The FIs must be willing and able
to follow sound banking principals and act in close co-operation with the Environmental Expert in
order to lend efficiently to the right target.
13. Loans to FIs will be funded from EBRD’s own resources. In selecting FIs, the EBRD
will follow the same prudent and sound banking principles that have been used in the analysis and
review of all projects in the financial sector of the EBRD’s portfolio. FIs will have to demonstrate
financial health, sustainability, quality and dynamic management, satisfactory credit policies and
approval procedures and quality of clients. The appraisal criteria are broadly the following:
(i) financial criteria from the core basis, i.e. in terms of:
- audited accounts according to international accounting standards;
- sound credit policies and approval procedures;
- capitalisation, size and capability adequacy;
- asset quality and acceptable provisioning levels;
- profitability;
- portfolio diversification;
- funding constraints;
- good management track record;
- good corporate governance and integrity of main shareholders;
- commitment to manage and market the facility to make it a success.
(ii) other aspects, such as background and history, reputation, growth dynamics,
private versus state ownership, relationship with local private enterprise sector,
chances for occurrence of take-over, merger or acquisitions etc.
14. A summary of the participating banks’ financial status and historic performance will
be presented to EBRD’s managers at the Operations Committee upon the discussion of the project
by the Bank’s management. Candidate banks have been identified and included in Attachment 1.
15. The Facility will disburse in tranches depending on the demand from the FIs. The
relationship with each FI will be managed and monitored separately.
16. Due to the specific nature of the Facility, FIs will co-operate closely with the
Environmental Expert selected by EBRD and responsible for the technical evaluation (screening)
of the loan applications (see component 2).
17. The mechanics of the proposed Facility are the following
Step 1: Potential sub-projects can come to local banks through one of three mechanisms:
(i) through internal marketing by the local bank itself, sub-projects may emerge either
from the local banks’ existing or future portfolios. This has a clear advantage of an
established relationship with the local bank, which will make the due diligence
process simpler.
(ii) sub-projects may emerge from the TAM/BAS programme which has a large
database of information on companies in Slovenia. Companies working with the
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
7
TAM/BAS programme are encouraged to undertake a process and resource efficiency
review and identify areas where improvements could be made. At some stage in this
process, some companies may identify a need for investment in new equipment, and
the TAM/BAS programme could direct such companies to local banks participating in
the Facility.
(iii) sub-projects may come to local banks directly from companies or municipalities
who have learned about the Facility through the marketing campaign to be undertaken
by the project.
The TAM/BAS programme will provide advisory services to potential sub-borrowers
interested in assistance in structuring project proposals which satisfy the GEF criteria and the
information requirements of the Environmental Expert and the local banks. It will not be
compulsory for a company wishing to apply for a loan to go through the TAM/BAS
programme but if a company has difficulties in structuring an idea, TAM/BAS assistance will
be available to it. Local banks will also be able to refer companies to the TAM/BAS
programme for assistance.
Step 2: All loan applications that come to the local banks will undergo an initial screening to
ensure that they are eligible for inclusion in the Facility. This initial screening will consist of
basic questions to establish that:
(i) the sub-project can be characterised as a water pollution reduction project;
(ii) the polluter is located in the Slovenian portion of the Danube River Basin, and;
(iii) in the case of smaller municipality wastewater treatment plants, the volume of
emissions to be treated does not exceed 40,000 person equivalent.
Step 3: If the project passes the initial screening stage, a more detailed due diligence will be
undertaken by the local banks and by the Environmental Expert. The local banks will
concentrate on the financial aspects of the sub-project to establish that the sub-borrower is a
creditworthy company. The Environmental Expert will check the sub-project against the
eligibility criteria as outlined in Annex 5 of this project brief. The Environmental Expert will
provide their sign-off to the local bank within 10 working days of receiving the loan
application. Sub-projects cannot be financed under the Facility without the sign-off of the
Environmental Expert.
Step 4: Having received the sign-off of the Environmental Expert and completed their own
financial and legal due diligence, the local banks can proceed to final loan approval, including
definition of the grant portion of the loan.
Step 5: Having structured and approved the loan, the local bank disburses the funds (from its
own resources) to the company to allow sub-project implementation. The company is
responsible for the implementation of the sub-project for which the funds are provided.
Step 6: Disbursements from EBRD to the local banks would be made once a local bank has
disbursed an agreed number (tentatively 5) sub-loans. A disbursement request will be sent to
EBRD to reimburse the local bank for those loans. Similarly, the incentive fee will be granted
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
8
each year as a percentage of the amount disbursed to companies. These procedures intend to
minimise the administrative burden for the local banks and the EBRD.
Step 7: The grant portion of any disbursement would not be sent to the sub-borrower until
completion of the sub-project. Completion is defined as the point where the equipment
financed by the loan has been installed and confirmed to be operating within the required
parameters. Sub-project completion will be confirmed by the Environmental Expert who will
send this second sign-off to the local FI, EBRD, and the company concerned.
Step 8: EBRD will disburse the GEF grant directly to the company.
Component 2. Technical Assistance (Total: US$ 1,749,650; GEF US$ 907,650)
Sub-component 1. Environmental Expert Advice
18. Past experience has shown that in the case of environmental credit lines, it is
important to “outsource” the environmental due diligence to technical experts, given that the FIs
do not normally have the resources to provide an independent technical-environmental review of
project proposals and undertake post-loan technical monitoring. Furthermore, as the Facility
offers a subsidy element for both FIs and sub-borrowers, it is essential to delegate the checking of
eligibility of sub-loans to an independent third party.
19. For the purpose of the CF, an Environmental Expert (which could be an individual or
firm) will therefore be contracted to review loan applications. The Environmental Expert will be
selected through a competitive tendering process in accordance with EBRD’s public procurement
rules. In order to safeguard the Environmental Expert’s independence, the Expert will be
contracted by EBRD. The contract will include an agreed budget for fees and reimbursable
expenses. EBRD will disburse payments for services undertaken against invoices from the Expert.
20. Following the initial screening of a loan application by the FI, it will be the task of the
Environmental Expert to review the application on behalf of the CF applying pre-developed GEF
eligibility criteria and making an assessment on how the associated requirements of costeffectiveness,
provision of an environmental monitoring plan, and compliance with health, safety
and environmental regulations, have been addressed (see Annex 5).
21. It would also be the same Environmental Expert’s responsibility to confirm and signoff
on the completion of the sub-project (defined for the purposes of this project as the point of
successful installation and confirmed operation of the loan-financed equipment) as and monitor its
continued operation in accordance with the aforementioned environmental monitoring plan. The
objective of loan-specific monitoring would be to ensure that compliance with GEF eligibility
criteria was achieved and maintained during the life of the loan (LOL). Monitoring by the
Environmental Expert would assess the degree of achievement of EU and national emission
standards associated with the loan-supported technology purchased by the borrower. For purposes
of the present project, monitoring would be limited to equipment conformity with technical
specifications, successful implementation and operation, and maintenance over LOL. Estimated
level of effort per sub-project is two site visits to confirm project completion and monitor
continuing performance, respectively.
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
9
Table 1: Estimated Budget for Environmental Expert (see details in attachment 4)
Cost Category Unit Costs (US$) Quantity Subtotal (US$)
Successful project applications
- Project Review Standard 2,000 1 27 54,000
- Project Review Complex 3,250 2 9 29,250
- Completion Test 1,500 3 36 54,000
- Monitoring 1,500 3 36 54,000
Unsuccessful project applications
- Project Review 2,000 1 36 72,000
Variable costs (per diem, local travel) 27,000
Sub-total 290,250
Contingency 5% 14,500
Total 304,750
1 Estimated on the basis of 4 days with a daily consultancy rate of 500 USD.
2 Estimated on the basis of 6.5 days with a daily consultancy rate of 500 USD.
3 Estimated on the basis of 3 days with a daily consultancy rate of 500 USD.
Sub-component 2. Technical Assistance and Training
22. Not all firms have equal access to the technical resources and information to evaluate
if an existing or new technology is in conformity with BAT criteria, appropriate for the size of the
company, and/or is economically sustainable. Many potential sub-borrowers also have difficulties
with formulating investment proposals and loan applications that would satisfy the CF criteria.
The Technical Assistance and Training activities of the project will address the following needs
identified during project preparation:
(i) lack of familiarity of potential sub-borrowers with the structure and procedures
associated with the proposed credit facility;
(ii) sub-borrowers’ lack of understanding of real investment needs and lack of ability
to ensure cost-effectiveness in selection of the most appropriate technology;
(iii) the need for assistance in the process of loan application and formulation of
technical proposals to ensure conformity with GEF, EU, and national environmental
criteria;
23. For those companies that request it, support will be made available through individual
consultations, to offer advice in identifying the appropriate technology suitable for the firm’s
production process while meeting the GEF eligibility criteria and, if needed, in formulating the
loan application. These activities will be undertaken by the TurnAround Management
(TAM)/Business Advisory Service (BAS) Programme which is already actively engaged in
providing advisory services, including on environment, health and safety, to Slovenian
companies. A description of these programmes and their activities is in Attachment 2.
Table 2: Estimated Budget for Technical Assistance and Training
Cost Category Unit Costs (US$) Quantity Subtotal (US$)
BAS Intervention 6,000 70 420,000
TAM Intervention 60,000 2 120,000
Total GEF-financed 540,000
BAS Intervention
- company contribution*
6,000 70 420,000
TAG operating costs Slovenia/year*
- financed by other donors
211,000 2 422,000
Total financed from other sources 842,000
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
10
* See also Attachment 2
Sub-component 3: Marketing
24. Past experience derived from working with FIs and the private sector in the
implementation of new financial modalities, such as the EBRD/GEF Credit Facility, have
demonstrated that there are a number of barriers, at least initially, in the development of a loan
portfolio. This is largely due to the lack of experience on both the part of the FIs and the
borrowers with the new lending instrument exacerbated by an understandable reluctance to enter
into a financial commitment without a full understanding of the respective responsibilities and
lending conditions. Past experience has also demonstrated that much of the confusion and
misunderstanding can lead to delays in disbursement though this can be addressed through
providing quick and ready access to information to institutions in the loan chain. As a result,
besides the regular marketing channels of participating banks, special marketing efforts will be
incorporated in the project to extend its client base. The purpose of these activities will be to
inform potential borrowers in the industrial, agricultural and municipal sector about the CF, and to
put them into contact with participating banks and, if needed, with the TAM/BAS Programme
experts providing technical assistance for loan applicants.
25. The activities will include:
(i) preparation and dissemination of a CF information sheet to potential clients through
government authorities and interest groups such as Chamber of Commerce, and trade
associations;
(ii) organisation of workshops for potential borrowers to inform them of the Facility,
its benefits and mechanisms for making and application and receiving a loan;
(iii) preparation of a simple standard environmental section for loan applications to the
Facility, to be attached to participating banks’ regular loan application formats, and its
distribution to interested borrowers.
Table 3: Estimated Budget for Marketing
Cost Category Unit Costs (US$) Quantity Subtotal (US$)
- Preparation of a Credit Facility
information sheet
1 10,000 10,000
- Preparation of standardised loan
sections
5,000 1 5,000
- Marketing workshops
(preparation, organisation, venue,
etc.)
4,000 4 16,000
- Sub-total 31,000
- Contingency 5% 1,500
Total 32,500
Sub-component 4: Information dissemination (see also Annex 4)
26. Several complementary aims for information dissemination activities have been
defined together with project stakeholders. First, the sub-component aims at informing a wide
range of stakeholders and the general public on the project to promote public awareness and
ensure transparency in the use of public funds. Second, its purpose is to promote the replication of
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
11
the project concept - public/private partnership in financing pollution reduction - and the
innovative technologies demonstrated by the project. Third, the component aims at establishing an
interactive communication channel between the project and its stakeholders in order to consult
stakeholders during project implementation, and to share experiences and lessons learned with
them. By pursuing these objectives, the component will enhance the impacts, ownership and
sustainability of project outcomes.
27. Information dissemination activities will make use of a range of different channels
and means, primarily a website and e-mail box; other channels may include brochures, articles,
presentations and discussions, and organisation of company visits. The implementation of these
activities will be ensured by TAM/BAS programme, which already undertakes various
information dissemination activities in Slovenia.
28. At the DRB level, the project will build on the linkages established during project
preparation with the ICPDR and the UNDP/GEF Danube Regional Project (DRP) with the aim of
promoting replication and sharing lessons learned with key DRB stakeholders throughout the
region. Existing information channels, such as the ICPDR and DRP websites, as well as the
DRP’s communication and awareness-raising activities would provide a comprehensive
framework for regional information dissemination on the project and ensure cross-learning and
complementarity between GEF-funded projects.
29. At the international level, information dissemination will be promoted by EBRD who
will share its experiences on the project through its established links with governments and
financing institutions, and through co-operation fora such as the Project Preparation Committee of
the Environmental Action Programme for Central and Eastern Europe, in order to promote
replication.
Table 4: Estimated Budget for Information Dissemination
Cost Category Unit Costs (US$) Quantity Subtotal (US$)
- Brochure printing and
dissemination
1.5 10,000 15,000
- Round tables (preparation,
reporting, organisation etc)
4,500 2 /1 9,000
- E-mail address for the project - 1 -
- Website establishment 5,000 1 5,000
- Sub-total 29,000
- Contingency 5% 1,400
Total 30,400
/1 In the context of mid-term review and final evaluation.
Project budget and duration
30. An overall budget for the project is presented in Table 5.
Table 5: Estimated Project Costs for EBRD and GEF (millions of US $)1
Component Indicative Costs Financing Plan
Amount
(millions US$)
Share of Total EBRD GEF Total
Credit Facility 54,000,000 98.35 % 45,000,000 9,000,000 54,000,000
1 This does not take into account the TA contributions from other sources as set out in table 2 above.
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
12
Technical
Assistance
907,650 1.65 % 0.00 0.90 0.90
Total 54,907,650 100.00 % 45,000,000 9,907,650 54,907,650
31. The period of disbursement of GEF funds under the project is estimated to cover four
years starting January 2003. The Credit Facility is expected to disburse all sub-loans within two
years from project start, i.e. during 2003-2004. The investments financed with the sub-loans are
expected to be completed, and GEF grants disbursed to sub-borrowers, within four years from
project start, i.e. during 2003-2006. The incentive fees to participating FIs will be disbursed
during the same period. Activities under the sub-components of technical assistance/training and
marketing are expected to be completed during the first two years of the project. Most of the
activities under the sub-component on environmental expert advice will be completed by end-
2006 although some monitoring activities will continue until the end of the maximum sub-loan
payback period (2011). Similarly, most of the information dissemination activities will take place
during the years 2003-2006.
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
13
Attachment 1. Candidate Participating Banks
EBRD has an established relationship with the four largest banks in Slovenia. All these banks
have a good track record, lending capability, financial performance and extensive branch
network for which reason they will be proposed to participate in the Facility. The EBRD
monitors these banks continuously, and the performance to date has been good.
The list consists of the following banks:
Nova Ljubljanska Banka;
SKB Banka d.d.;
Nova Kreditna Banka Maribor d.d.; and
Banka Koper.
The EBRD will also contact other local banks, which would be eligible to participate in the
Facility.
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
14
Attachment 2. Description of the TAM and BAS Programmes
The TurnAround Management Programme (TAM)
The TurnAround Management (“TAM”) Programme was created in 1993 by UNDP, EU
PHARE Programme and EBRD as a response to the pressing need for industrial restructuring
in the transition countries of Central and Eastern Europe. TAM was designed to respond
directly to enterprises’ needs, avoiding many of the pitfalls of conventional enterprise
assistance and placing a high level of conditionality on the performance of the enterprises
themselves. Acknowledging the importance of small and medium-sized enterprises (SME) to
economic growth, TAM was directed mainly towards SME, though the Programme has also
supported some larger industries in special circumstances.
Objectives and structure
TAM provides industry-specific advisors to potentially viable SME, enhancing the
knowledge, confidence and capabilities of their management and assisting them in transition
to market-driven economy. TAM projects improve cash flow, quality, productivity, design,
and local and export marketing, and also enhance profitability. These actions create
sustainable employment opportunities and considerably reinforce management skills in the
regions concerned.
The Programme has a single “not for profit” management system, the TurnAround
Management Group (TMG), hosted by EBRD. TMG coordinates an international network of
‘industry-specific’ senior advisors and technical experts who are able to “talk the industry
language” with the enterprise management. This structure optimises the use of multiple
donors funds, allowing effective support of large numbers of enterprises with relatively
simple procedures.
TAM assistance involves a high degree of conditionality on enterprise performance. Advice to
unresponsive enterprises is stopped, reducing the exposure and potential waste of donor
funds.
Activities and Implementation
A TAM project is carried out by a team of specialists lead by a Senior Industrial Advisor
(SIA) selected from the same industry sector as the beneficiary company. The SIA are
typically former chief executives and senior operational directors of industrial companies
who, during their successful careers, have already confronted and solved many problems
similar to those facing the beneficiary enterprises. They have a high level of commercial
experience and in-depth knowledge in their sector, good interpersonal skills and the authority
to influence top management in beneficiary companies.
Selection of TAM team members is based upon industry relevance and commercial
experience. TAM projects are undertaken on a fixed, non-negotiable, fee rate basis, which
ensures that team selection is based on technical rather than financial criteria.
TAM projects aim at helping the enterprise to understand its problems and to make the
management and cultural changes necessary to create a profitable, stand-alone private
enterprise.
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
15
In particular, the TAM team:
- builds the confidence of enterprise managers in their own ability to manage their
businesses successfully in a market-driven economy and to adapt to the demands of
international markets;
- assists enterprises to comply with the industrial legislation in their export markets and to
develop sound environmental practices;
- helps management prepare a three-year business plan based on best international business
practices to establish strategic direction and attract external investment and finance;
- advises how to update design and production capabilities to be comparable with those of
international competitors;
- shows how the competitive position of the enterprise can be improved by specific and
general marketing strategies;
- helps enterprises establish a network of international contacts with customers, suppliers,
distributors, investors and foreign partners.
The changes are implemented by the enterprise's own management. The TAM team aims at
transferring skills and know-how, and avoiding creating dependency.
For a typical enterprise, a TAM team normally undertakes a 60 workday plan over 12 to 18
months. The SIA provides at least 32 workdays of advice, usually including 6-8 on-site visits.
Results
TAM is currently active in 26 countries. Grant funding of more than Euro 62 million has been
provided by 27 donors, enabling the Programme to undertake appr. 733 projects. Aggregate
turnover for enterprises assisted by TAM amounts to US $ 16.9 billion, and their total staff to
677,000 people. TAM has a success rate of circa 80% in transforming enterprises to
profitability. It is considered to achieve sustainable impacts through a highly cost-effective
delivery mechanism.
For more information, see http://www.ebrd.com/about/index.htm - Apply for financing -
Special Programmes – TAM Programme.
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
16
The Business Advisory Service (BAS)
The first Business Advisory Service (BAS) Programme was established in the Baltic States in
1995 through the Baltic Technical Assistance Special Fund (BTASF), created by EBRD and
the Nordic countries. The main objective of the Baltic BAS is to promote the development of
SME in the Baltic’s through providing them with practical business advice on clearly-defined
projects, with rapid pay-back periods.
The Baltic Programme has operated successfully for 7 years, and is now being replicated in
other CEE countries. Funding for BAS programme has been provided by a wide variety of
donors – BTASF, European Union, United Kingdom (DFID), Japan, Central European
Initiative (CEI), Sweden, Finland, Norway, Denmark, Germany, Austria, Switzerland, and
Balkan Region Special Fund.
Objectives and structure
BAS co-funds specific consultancy projects with micro, small and medium-sized enterprises,
improving their quality and competitiveness. It introduces management and quality systems in
enterprises, improving their management skills and profitability, creating sustainable
employment and facilitating the transition to market economy. BAS focuses on practical
inputs with clear objectives, providing benefits with a relatively short ‘pay-back’ time.
Assisted enterprises typically recoup costs in about one year.
Using predominantly local consultants, the Programme also serves to increase the capacity
and competence of the local consultancy industry so that they can provide for an increasing
proportion of enterprise consultancy needs.
Like TAM (see above), BAS is managed by the TurnAround Management Group (TMG),
hosted in EBRD. This single “not for profit” management system aims to ensuring optimal
use of resources and effective support of large numbers of enterprises with relatively simple
procedures.
BAS relies largely (>75%) upon local, “BAS accredited” consultants to deliver services. In
certain cases, where local consultants do not have the capacity to undertake an assignment,
foreign consultants may be brought in to complement their knowledge. The Programme
facilitates and monitors the consultancy work undertaken.
Activities and Implementation
To initiate a BAS project, a Grant Agreement is agreed between BAS and the CEO of an
enterprise. This agreement commits the BAS programme to providing up to 50% of the costs
of business support to the enterprise in question. BAS may support micro, small and mediumsized
enterprises although certain sectors are ineligible for assistance (tobacco production,
gambling or financial services companies).
Typical BAS assignments include upgrading management information systems, accounting
systems and financial information systems, cost and engineering studies, restructuring and
reorganisation, market research, planning and development, quality management systems and
certification, proposals for finance, business partner and investor search, and preparing
business plans and strategic development plans.
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
17
Each project is tailored to the specific needs of the enterprise. BAS does not fund any
hardware or equipment requirements.
Results
BAS operates in the Baltic States, Russia (St Petersburg and Samara), Southeast Europe
(Slovenia, Croatia, Bulgaria, Bosnia & Herzegovina, FYR Macedonia, Montenegro), Central
Asia (Kazakhstan and Uzbekistan) and South Caucasus (Georgia and Azerbaijan). Its total
funding since 1995 is Euro 26 million. As of 30 June 2002, BAS had initiated 2,049 projects
of which 1,572 have been successfully completed. Its cost-effectiveness in changing business
culture and creating a sustainable impact in the micro and SME sector is widely recognised.
In Slovenia, between January 2001 and June 2002, 124 projects were undertaken of which 38
successfully completed. Total funds committed for Slovenia are Euro 1.7 million.
Slovenian BAS Programme Running Expenses for 12 Months
EUR
Opex 2500 per month 30,000
Rent 3222 per quarter 16,000
Contracts Programme Director 50,000
National Programme Director, local 60,000
Project Officer, local 40,000
Assistant, local 15,000
Total Programme Operating Expenses 211,000
For more information, see http://www.bas-slo.net/indexEng.htm
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
18
Attachment 3. Assumptions used to estimate number of loans from the Facility
1. Total Facility size: US$ 45 million;
2. Maximum loan size under the Facility: 10% of total Facility size, i.e. US$ 4.5 million;
3. For the purposes of this estimate only, a minimum loan size of US$ 100,000 (no minimum
loan size will be established for the Facility);
4. On the basis of experience from other SME credit facilities, it is assumed that there will be
a larger number of smaller loans and only one, or possibly two, loans up at the maximum
loan limit;
5. The BAS programme can manage at maximum 10 projects/month. It is estimated that, of
this total, 3 projects/month may be environmental projects seeking funding under the
Facility. On this basis, the number of loan applications to the CF is estimated at 36 per
year and at 72 over the two years life of the Facility. Of those, it is assumed that 50%, i.e.
appr. 36 projects, will pass the eligibility review of the Facility and thus receive the loan.
6. TAM projects are much larger than BAS projects and require more time. It is assumed
that TAM-type projects may represent possibly two projects under Facility.
Table 1 below presents a summary of projects listed in the Demand Study produced by the
Slovenian BAS programme (see Annex 6), and gives indications on the likely distribution of
loans under the Facility.
Table 1: Summary of projects listed in the Demand Study
Investment size (US$) Number of projects
100,000 –499,000 12
500,000 – 999,000 11
1,000,000 – 1,999,000 8
2,000,000 – 2,999,000 5
3,000,000 – 3,999,000 1
4,000,000 – 5,000,000 2
Total 39
Based on the above estimations, the likely structure of the Facility is presented in table 2
below.
Table 2: Likely structure of the Facility
Investment size (US$) Number of loans Total amount /1
100,000 – 499,000 14 3,500,000
500,000 – 999,000 10 7,500,000
1,000,000 – 1,999,000 6 9,000,000
2,000,000 – 2,999,000 4 15,000,000
3,000,000 – 3,999,000 1 3,500,000
4,000,000 – 4,500,000 1 4,250,000
Total 36 42,750,000
/1 Assuming mid-point of investment size category as loan size.
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
19
Attachment 4. Detailed cost estimate of Environmental Expert
Time (days) Estimated
Cost (US$)
Costs
Standard
Costs
Complex
Total
EFFORT PER SUB-PROJECT
Sub-project approval (standard – 75% of projects)
Review proposal 0.5 250
Prepare site visit 0.5 250
Conduct site visit 2 1,000
Project report 1 500
Sub-total 4 2,000 2,000
Sub-project approval (complex – 25% of projects)
Review proposal 2 1,000
Prepare site visit 0.5 250
Conduct site visit 3 1,500
Project report 1 500
Sub-total 6.5 3,250 3,250
Project completion (all projects)
Prepare site visit 0.5 250
Conduct site visit 2 1,000
Monitoring report 0.5 250
Sub-total 3 1,500 1,500 1,500
Monitoring
Prepare site visit 0.5 250
Conduct site visit 2 1,000
Monitoring report 0.5 250
Sub-total 3 1,500 1500 1,500
Total per project 10-12.5 5,000 6,250
OVERALL EFFORT
27 standard projects
assessed and considered
eligible
270 500 135,000
27 standard projects
assessed but considered
ineligible
108 500 54,000
9 complex projects
assessed and considered
eligible
112.5 500 56,250
9 complex projects
assessed but considered
ineligible
36 500 18,000
Sub-total 189,000 74,250 263,250
Variable costs (per diems [EU per diem for Slovenia], local travel costs [cost
per km petrol]) etc.
27,000
Contingency 5% 14,500
TOTAL COSTS 304,750
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
20
ANNEX 3
INCREMENTAL COST ANALYSIS
INTRODUCTION
1. The European Bank for Reconstruction and Development (EBRD) in cooperation
with the Global Environment Facility (GEF) plans to support the National Pollution Reduction
Project in Slovenia. The objective of the project is to demonstrate the use of financial
intermediaries in achieving the reduction of industrial, municipal, and agricultural point source
water pollution in the country. This will be accomplished through the creation of a partly
subsidised credit line facility (the “Credit Facility”) to local financial institutions (FI) in Slovenia
with the aim of financing investments leading to the reduction of water pollution in the Danube
river basin (DRB).
CONCEPTUAL APPROACH
2. This document presents the Incremental Cost Analysis (ICA) associated with the
project which consists of comparing the costs and benefits associated with the baseline scenario
(“business as usual”) with those derived from the GEF Alternative. Only costs able to generate
incremental global environmental benefits were considered for GEF funding. The baseline
consists of a number of relevant on-going activities, which address the reduction of nutrients and
other water pollutants affecting trans-boundary water bodies with sources in Slovenia.
3. The GEF Alternative complements the baseline and is based on increasing the supply
of “soft” funding to private firms and municipalities to support water pollution reduction
investments. The Alternative mainly supports complementary activities and will contribute to
further reduce trans-boundary pollution originating from nutrient and other priority substance
sources in the DRB. Global environmental benefits are already being generated by the baseline
but in limited quantities and at a slower pace than desired. The additional reduction of nutrient
pollution brought about by the Alternative will be achieved through supporting: (i) the accelerated
adoption of pollution reduction actions required by the relevant EU/national legislation; and/or (ii)
actions that reduce emissions beyond the standards required by relevant EU/national legislation.
In addition, the use of GEF funding to support public-private sector partnerships in the
International Waters (IW) Focal Area (FA) represents per se a potential benefit of the project.
This approach is expected to lead to a better allocation of resources and logistic efficiency. It
should be noted that the increased adoption of new technologies for water pollution reduction
likely to be derived from the project represents the only substitution activity in the GEF
Alternative. These new technologies will generate benefits that fall under the same categories of
those mentioned above (i.e. faster and/or greater achievement of water pollution reduction as
compared to relevant national and EU requirements) but in a more cost effective way. This should
be considered as an economic benefit. In addition, further replication benefits are expected to be
generated by the demonstration of these technologies.
4. The description of the GEF activities is presented in the section describing the GEF
Alternative and the methodology used to estimate its costs is presented in the baseline description
presented below. The ICA covers the period 2003-06. For the purposes of the ICA, the duration of
the GEF project is defined as the period of disbursement of GEF funds, and is expected to cover
four years starting January 2003 (see Annex 2).
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
21
BASELINE SCENARIO
5. The baseline consists of a number of relevant activities which support the reduction
of nutrient and other water pollution in Slovenia for the period covering 2003 to 2006. In the
accompanying ICA matrix (Matrix 1), these have been grouped into two categories which reflect
the Alternative’s components, namely infrastructure investment funding (the Credit Facility) and
technical assistance/information dissemination. Relevant baseline activities were identified from
the following programs/projects:
European Union supported initiatives consisting of: Pre-accession Assistance for
Central and Eastern European Countries (PHARE) Cross Border Co-operation (CBC)
providing co-financing for water and nature conservation activities, the PHARE
National (PN) providing for environmental institutional building, the Large Scale
Infrastructure Facility (LSIF) for waste and wastewater sectors investments, and the
Instrument for Structural Policies for Pre-Accession (ISPA) which is supporting the
implementation of relevant EU legislation in the transport and environmental sectors;
Ekofund is a State-owned, non-profit oriented financial institution, which provides
loans for environmental protection investments in Slovenia at favorable interest rates.
Ekofund lending is oriented by the National Environment Protection Act (EPA)
priorities. Water pollution is one of its main fields of operation;
Private firms’ own funds targeting water pollution reduction;
Public (State, municipalities, wastewater tax revenues) funds used for infrastructure
investments for water pollution reduction;
The GEF/UNDP Strategic Partnership on the Danube/Black Sea Basin (Danube
Regional Project – DRP, 2001-2006), a regional project aimed at reinforcing the
capacities of the participating countries in developing effective mechanisms for the
protection of international waters and sustainable management of natural resources
and biodiversity. A breakdown of these costs is provided in the ICPDR matrix (see
Attachment 2 in the Main Report).
The GEF/World Bank Black Sea/Danube Strategic Partnership - Investment Fund for
Nutrient Reduction which supports nutrient reduction investments in the restoration
and creation of wetlands, reform or improvement of agriculture and land management
practices and wastewater treatment in communities and industries. Funding will be
mostly targeted towards improvements in poorer countries in the Danube river basin.
Although Slovenia is not part of this initiative, it has been included in the baseline, as
the country will benefit from the demonstration effect of activities carried out in other
countries. Nevertheless, no cost has been included in the baseline against these
“positive externality” benefits.
6. The specific contributions of these initiatives to the baseline cost have been estimated
according to the methodology described below.
EU PHARE contributions were projected over the years 2003-2005 based on
disbursement data provided by the CBC, PN and LSIF for the period 1994-2000. Only
the average of 1999 and 2000 disbursements were used for this projection, as LSIF
projects were not implemented before 1999. PHARE projections do not cover the year
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
22
2006 since the programme is likely to be discontinued (with a transitory period) after
Slovenia's EU accession, expected to take place in January 2004;
EU ISPA contribution estimates were based on the financing breakdown of priority
ISPA investments for the period 2000-2006 contained in the "National ISPA Strategy
of Slovenia, 1999.” and converted to current US$. Only investments from 2003 were
taken into consideration. ISPA funds were projected for the period 2003-2006 since
ISPA is expected to be replaced by EU cohesion funds upon Slovenia's EU accession;
Ekofund contribution is based on an Ekofund communication containing loan
disbursements over the period 1996-2000. Average loan disbursements over the last
six years (1996-2001) in current SIT were converted to current US$ and projected out
to 2006 assuming a constant disbursement pattern;
State, municipal and wastewater tax fund estimates are based on the financing plan of
the first phase (2003-2006) of the National Programme for the Construction of
WWTP, adopted by MOEPP in 2001. The estimates were adjusted on the basis of
assumptions on the municipalities’ actual investment capacities, made in the Demand
study undertaken for the preparation of this project (see Annex 6, chapter 3.1);
Private firms’ own funds have been assumed to represent 40% of total investment
needs of these companies to comply with relevant EU/national legislation (this
percentage is based on the estimated average of the firms’ own contributions to
Ekofund-supported projects for industry and agriculture). The estimate of private
firms’ total investment needs is derived from the Demand study undertaken for the
preparation of this project (see Annex 6) in which these investment needs were
estimated at Euro 384 million during the project period;
The DRP contribution has been estimated by dividing the cost of the relevant
components by the number of countries participating in the project (11).
Global Benefits
7. The baseline is currently generating global environmental benefits in the form of
reduction in trans-boundary water pollution in the DRB. Other global environmental benefits
include improving the general ecological status of the river and some of its upper tributaries, and
the conservation of globally important biodiversity in Danubian ecosystems, in particular
wetlands. However, the extent of these benefits is limited by constraints on investment funding.
Domestic Benefits
8. These include the conservation of river and wetland ecosystems, the protection of
groundwater, the enhanced compliance with environmental legislation which in time will
contribute to the State being able to enforce the highest international environmental standards, and
greater willingness and capacities of Slovenian companies and municipalities to undertake
environmental investments.
9. In addition, socio-economic benefits such as reduced water treatment costs for
municipalities and firms, reduced costs of compliance with national/EU environmental standards,
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
23
enhanced public health (through cleaner drinking and bathing waters), reduced health costs, and
improved quality of life in neighbouring communities should also accrue over time.
GEF ALTERNATIVE
10. The GEF Alternative includes two complementary activities: (i) the creation of the
Credit Facility (jointly funded by EBRD and GEF); (ii) technical assistance, including
environmental expert advice to participating FIs; technical assistance and training for potential
sub-borrowers; marketing; and information dissemination. For the Credit Facility, GEF funding
will be on the order of US$ 9 million which will be blended into resources provided by EBRD
(US$ 45 million). The technical assistance component, with total costs of US$ 1,7 million, will be
financed by GEF (US$ 0.885 million), multi-donor Business Advisory Service (BAS) Programme
(US$ 0.422 million) and the beneficiary companies (US$ 0.420 million). The Credit Facility will
be complementary to existing environmental funding sources. It will be on-lent to commercial
banks, which in turn will market these “soft funds” through their own network as well as other
channels such as the Slovenian Chamber of Commerce and the MOEPP. A Demand study for
water pollution reduction investments carried out during project preparation (see Annex 6)
indicated that the Credit Facility was unlikely to significantly reduce demand for environmental
grants and loans from specialised loan facilities (Ekofund) or regional/national public entities such
as EU.
Global Benefits
11. In addition to the global environmental benefits generated by the baseline, the GEF
Alternative will achieve additional reductions in nutrients and priority substances contamination
in the DRB through: (i) accelerating compliance with national standards before the deadline(s)
established in legislation; and/or (ii) promoting emission reductions beyond national/EU
requirements; and/or (iii) demonstrating innovative nutrient pollution reduction technologies with
replication potential in the DRB. In addition, greenhouse gas emissions reduction through
promoting the use of waste to produce renewable energy (e.g. biogas production in livestock
farms) and biodiversity conservation benefits may also result from the project.
Domestic Benefits
12. Additional (as compared with the baseline) domestic benefits associated with larger
emission reductions as well as more cost-effective ways of reducing water pollution and
complying with national and EU legislation through the adoption of new technologies will accrue
to municipalities and firms and society as a whole. The value added generated by the services
needed for the adoption and use of these new technologies as well as the strengthened role of local
FIs in the Slovenian economy should be considered as economic benefits.
13. The main environmental and socio-economic benefits as well as the baseline and GEF
alternative costs are presented in the Incremental Cost Matrix below.
Slovenia: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
Components Baseline Alternative Increments
A. Credit Facility
Global
Environmental
Benefits
Limited reduction in trans-boundary nutrient-based water
pollution in the Danube river basin. Other limited global
environmental benefits will include improving the status or
the Danube River, its tributaries in the Slovenian portion of
the basin and the conservation of globally important
biodiversity in Danubian ecosystems, in particular
wetlands.
In addition to the global benefits generated by the baseline,
the alternative would include (i) the compliance with
national standards before the deadline(s) established in
legislation and corresponding licences (minimum 1 year);
and (ii) nutrient pollution reduction beyond national
standards or polluter-specific effluent conditions
established in legislation and corresponding licences.
Domestic Benefits Conservation of river and wetland ecosystems, protection
of groundwater, the enhanced compliance with
environmental legislation which will contribute to its
updating and enforcement to respond to highest
international environmental standards, greater willingness
and capacities of Slovenian companies and municipalities
to undertake environmental investments. In addition,
socio-economic benefits such as reduced water treatment
costs for municipalities and firms, reduced costs of
compliance with national/EU environmental standards,
enhanced public health (through cleaner drinking and
bathing waters), reduced health costs, improved quality of
life in neighbouring communities and strengthened role of
private local FIs in the Slovenian economy should also be
accounted for.
Additional (as compared to the baseline) domestic benefits
associated with more cost-effective ways of reducing
water pollution through the adoption of new technologies.
Value added generated by the services needed for the
adoption and use of new technologies.
Costs for 2003-2006 (million current US$) 1/
GEF 0.0 9.0 9.0
EBRD Credit Facility 0.0 45.0 45.0
EU
PHARE 2/ 63.2 63.2 0.0
ISPA 3/ 16.9 16.9 0.0
Ekofund subsidised
loans 4/
6.6 6.6 0.0
Public funds 5/ 185.8 185.8 0.0
Private firm funds 6/ 153.6 153.6 0.0
Subtotal 426.1 480.1 54.0
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
2
Components Baseline Alternative Increments
B. Technical Assistance
Global
Environmental
Benefits
Limited capacity to manage trans-boundary ordinary and
emergency water pollution situations. Limited contribution
to building public awareness of globally relevant transboundary
nutrient pollution reduction.
Increased institutional capacity to address and achieve
globally significant water pollution reductions. Increased
contribution to building public awareness of globally
relevant trans-boundary nutrient pollution reduction.
Domestic Benefits Limited knowledge and capacity to use BAT for water
pollution reduction; strengthened NGOs for water
pollution reduction activities; improved public structures
and mechanisms for water pollution reduction; improved
cost recovery for water tariffs for nutrient reduction;
improved system of water pollution charges and
incentives.
Limited environmental public awareness through
community based small grant system, mass media
campaigns and publication of basin-wide documents
More efficient use of subsidised funds for water pollution
reduction as compared to the baseline; more reliable
system of procurement of water pollution reduction
equipment and improved monitoring of environmental
performance of water pollution reduction investments.
Contributing to building public awareness on domestic
nutrient pollution reduction.
Costs for 2003-2006 (million
current US$) 1/
GEF 0 0.885 0.885
BAS Programme 7/ 0 0.422 0.422
Beneficiary companies
8/
0 0.420 0.420
UNDP/GEF Danube
Regional Project 9/
- Stakeholders
capacity
building
0.103 0.103 0
- Institutional
strengthening
0.080 0.080 0
- Policy
development &
implementation
0.315 0.315 0
- Awareness
raising
0.309 0.309 0
- Pilot projects on
non-point
sources
0.074 0.074 0
- Information
dissemination
0.063 0.063
- Monitoring and
studies
0.102 0.102 0
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
3
Components Baseline Alternative Increments
Subtotal 1.0 2.8 1.7
Total Costs for 2003-2006 (million current US$) 1/ 427.1 482.9 55.7
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
4
1/ Physical and price contingencies are included.
2/ Based on disbursement data provided by the EU Delegation for PHARE Cross Border Cooperation (CBC), PHARE National (PN) and Large-Scale infrastructure Facility (LSIF) for 1994-2000. Only the average of 1999 and 2000 disbursements were used for projection as LSIF
projects were not implemented before 1999. ISPA funds were projected for the period 2003-2006 since ISPA is expected to be replaced by EU cohesion funds upon Slovenia's EU accession. For PHARE, funds were projected for the years 2003-2005 since the programme is likely
to be discontinued (with a transitory period) after Slovenia's accession to EU, expected to take place in January 2004.
3/ Based on the financing breakdown of priority ISPA investments for 2000-2006 contained in the "National ISPA Strategy of Slovenia, 1999, table 7.3.1. converted to current US$.
4/ Based on Ekofund communication dated March 2002 containing loan disbursements over 1996-2000. Average loan disbursements of the last six years (1996-2001) in current SIT were converted to current US$.
5/ Based on the financing plan of the first phase of the Slovenian National Programme for the Construction of WWTP (2003-2006). The total costs of the investment programme in the Slovenian portion of the DRB are estimated at Euro 383 million of which more than half are
expected to be covered by public sources (40% by water pollution tax, 3,5% by State budget and 10% by municipal sources). Given the limited investment capacities of Slovenian municipalities, the Demand study undertaken during the preparation of this project (see Annex 6)
estimates that municipalities will be able to cover only 5% of total costs, which will bring the total share of public sources to 48,5% of the investment costs. The figures were converted to US$ with an estimated 1:1 exchange rate.
6/ Representing 40% (this percentage is based on average own funds contribution in Ekofund projects contained in a specific communication from Ekofund dated March 2002) of the total industry and agriculture investment needs estimated at US$ 384 million (derived from the
Demand study carried out for the formulation of this project). The figures were converted to US$ with an estimated 1:1 exchange rate.
7/ Under the GEF Alternative, technical assistance to beneficiary companies will be provided by multi-donor financed Business Advisory Service (BAS) Programme in Slovenia. The regular operating costs of the BAS Programme, financed by other donors, are estimated at Euro
211,000/year. During the first 2 years of the GEF project, i.e. the period when the EBRD/GEFCredit Facility will be available on the market, a large share of BAS activities will be related to the TA component of the GEF project (see Annex 2). BAS regular operating costs for
these years are therefore counted as co-financing for the GEF Alternative. BAS will continue to support GEF project activities beyond the first 2 years but the level of effort will be considerably lower. BAS operating costs for years beyond 2004 are thus not considered as cofinancing.
The figures were converted to US$ with an estimated 1:1 exchange rate.
8/ BAS requires that the beneficiary company covers minimum 50% of the costs of BAS intervention. Total costs of one BAS intervention under the project are estimated at US$ 12,000/company. Total number of TA requests to BAS under the project is estimated at 70.
9/ DRP is a regional project. The portion of cost relevant to Slovenia has been derived by dividing by the number of participating countries.
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
5
ANNEX 4
PUBLIC INVOLVEMENT
INTRODUCTION
32. This annex presents the public involvement strategy for the project, prepared with the
support of Regional Environmental Centre for Central and Eastern Europe - Country Office
Slovenia (REC Slovenia) and the minutes of a public involvement workshop held during project
preparation (Ljubljana 17 June 2002), prepared by Ms Milena Marega, Director, REC Slovenia.
The workshop minutes together with workshop presentations have also been published on the
REC Slovenia website at http://www.rec-lj.si/FAO/default.html. A list of participants to the
workshop is attached (Attachment 1).
PUBLIC INVOLVEMENT STRATEGY
33. The preparation of the public involvement strategy for the planned EBRD/GEF
National Pollution Reduction Project in Slovenia has followed the principles of the UNECE
Convention on Access to Information, Public Participation in Decision-making and Access to
Justice in Environmental Matters (Aarhus Convention), Slovenian national legislation, which
increasingly reflects EU standards, as well as the guidelines on public involvement in GEF
projects (GEF/C.7/6). The strategy has also benefited from lessons learned in the recently
finalised project on NGO participation in the Danube River Basin Management Plans,
implemented by REC Slovenia, as well as from other experiences on public participation in
environmental decision-making that REC Slovenia has gained during the implementation of the
Strategic Environmental Assessment of the Preliminary National Development Programme 2000-
2001 and other related projects.
34. The need for the present strategy is supported by several factors. Environmental
awareness in Slovenia is being strengthened, and the Slovene public is increasingly interested in
environmental pollution from industrial and other sources. The public, represented inter alia by
environmental NGOs, interest groups and concerned individuals, require more reliable and
complete information on environmental pollution as well as more effective and transparent
environmental enforcement and monitoring. In addition, until today, public involvement in
environmental decision-making in Slovenia has been limited, in particular in larger projects.
Finally, public involvement in environmental impact assessment, required by the Slovene law, is
often not used effectively as a public participation mechanism.
35. Reflecting the above-mentioned needs, the proposed strategy is based on the
principles of transparency and openness, and the avoidance of unrealistic expectations as well as
of any activities that might be perceived as manipulation.
Main goals
36. The main goals of public involvement in the design, implementation and evaluation
of the planned project are the following:
a) to inform the public about the objectives, activities, methods, and expected results and
impacts of the project. This will contribute to the following:
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
6
- promoting public awareness on the project and ensuring transparency in the use of public
funds for the project;
- promoting replication of project concept in Slovenia and in other countries of the Danube
River Basin;
- disseminating information on innovative technologies demonstrated by the project;
b) to establish interactive communication channels with stakeholders to solicit their opinions
and cooperation. This will aim specifically at:
- sharing experiences and lessons learned with the main stakeholders;
- gaining suggestions and additional data that can be used for improvement of the project;
- making use of skills, experiences and knowledge of different groups of stakeholders;
- identifying potential partners for implementation and evaluation of the project.
c) to enhance ownership and sustainability of the project results.
Targeted audience
37. The target audiences of the public involvement strategy are the following (see also
sub-section on target population and stakeholders in section 3 of the Project Brief):
(i) participating local banks and other public and private financial institutions in Slovenia.
These include Slovenian commercial banks, and foreign banks present in the country as well
as the Slovene Ekofund;
(ii) potential borrowers from the industrial, agricultural and municipal sectors;
(iii) public agencies, in particular MOEPP and other national environmental authorities as
well as the Ministry of Economy, Ministry of Finance, National Agency for Regional
Development and Regional Development Agencies in Slovenia;
(iv) national interest groups, in particular the Chamber of Commerce, Chamber of Agriculture
and Forestry, trade associations, Association of Slovenian Municipalities and Towns,
Farmer’s union, and Slovenian Association of Banks;
(v) environmental technology firms, including both manufacturers of water pollution
reduction equipment and technologies and companies which provide related consultancy
services;
(vi) regional and international agencies, including ICPDR, UNDP DRP, WB IF, and EU, in
particular EU Commission Delegation in Slovenia;
(vii) regional and national NGOs, in particular those grouped under the Danube
Environmental Forum; and
(viii) general public in Slovenia and in other countries of the DRB.
Stakeholder information
38. Information to be made available to stakeholders will be as follows (see also the
description of component 3 in Annex 2):
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
7
a) project-related:
- project context: GEF, ICPDR, EU and national policies;
- project concept and structure, main goals and objectives, methods;
- project activities;
- project results and impacts;
- experiences, best practices and lessons learned from the project and other similar projects
in Slovenia;
- innovative technologies;
- tools for, possibilities of, and progress in, replication of the project in Slovenia and other
countries of the Danube River Basin (including information useful for concept replication
such as training modules, marketing strategy outlines, etc)
b) public involvement strategy:
- approach, schedule, deadlines and methods of public involvement in the project.
39. Channels for information dissemination may include:
- project website and e-mail box;
- brochures;
- articles in specialised/generalist journals and periodicals;
- press releases;
- presentations and discussions;
- company visits.
40. At the national level, BAS programme (see Attachment 2 to Annex 2) will have the
main responsibility for information dissemination activities. At the DRB level, information
dissemination activities will be coordinated with ICPDR and UNDP DRP activities in the same
field. EBRD headquarters in London and local office in Ljubljana will promote the project
through their contacts and information activities with local FIs, IFIs and potential borrowers.
Information will also be available in regular public information ‘corners/points’ of Slovenian
institutions such as Europe Center, Ministry of Environment and Spatial Planning, Ministry of
Economy, National Agency for Regional Development, Regional Development Agencies and
other authorities at regional and local level, Chamber of Commerce, Chamber of Agriculture and
Forestry, Association of Municipalities and Towns in Slovenia, and Jozef Stefan Institute.
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
8
Interactive communication, consultation and stakeholder participation
41. In addition to general dissemination of information, project stakeholders will be
provided with opportunities to gain information about the project and participate in its design,
implementation and evaluation. Different techniques will be used, as described in the below table:
Project activity Public Involvement
I. Project design
Preparation of draft project
proposal, including
identification of
environmental eligibility
criteria
Workshop to inform the public and receive their comments and
suggestions on project design and implementation plans.
Before the workshop:
General and individual invitations;
Information on the draft project concept and on the public
involvement strategy;
After the workshop:
Preparation of draft workshop report and its publication on
REC Slovenia website for possible comments;
Finalisation of the report and its dissemination through REC
Slovenia website.
Finalisation of project
proposal
Information to workshop participants and other key
stakeholders on the publication of the Project Brief on GEF
website. Invitation to comment on the Project Brief before its
submission for GEF CEO endorsement and EBRD Board
approval.
II. Project implementation
Project launch Preparation and distribution of an information sheet and a
brochure. Press release.
Project website establishment. Publication of the final project
document on the website.
Marketing campaign to reach potential clients.
Selection of final
beneficiaries
Competitive public tender for the selection of the
Environmental Expert. Announcement of the results on Project
website;
Documentation of the decision-making process: eligibility
check sheet (format to be developed) to be filled in by the local
FI and the Environmental Expert for each application;
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
9
Information to rejected applicants on the reasons for rejection;
Periodic announcement of names of final beneficiaries on
Project website;
Information dissemination through articles, press releases, and
other information channels.
Midterm review Participatory round table to report on project implementation,
receive broader feedback from stakeholders, and discuss on
possible modifications in project design;
Publication of midterm review report, and related public
comments, on Project web-site;
Information dissemination through articles, press releases, and
other information channels.
III. Project evaluation
Final evaluation Participatory round table to gather stakeholder comments and
discuss lessons learned;
Publication of evaluation report, and related public comments,
on Project web-site.
Final project report with
integrated report on public
involvement
Dissemination of final project report through all information
channels;
Public presentation event of final project report.
Consideration of public comments
42. Public comments will be treated in a transparent manner. All written comments will
be forwarded for consideration to the relevant project implementation partner(s) (local FI, EBRD,
GEF, TAM/BAS, Environmental Expert). The comments will be subsequently made available to
the public on the project website, together with a description of how they have been considered in
the project design, implementation or evaluation, and with appropriate explanation from the
partner in question.
Report on the effectiveness of public involvement
43. In the context of the final evaluation, the effectiveness and impacts of public
involvement through the whole process will be evaluated and results presented in the final project
report. This assessment will consider, inter alia, participation and contribution of various
stakeholder groups, general awareness-raising, experience-sharing, establishment of privatepublic
partnership, commitment, ownership and satisfaction with project results. Best practices
and lessons learned will be identified and incorporated into design of future projects.
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
10
REPORT ON PUBLIC INVOLVEMENT WORKSHOP
Location and date
44. A stakeholder workshop on the planned EBRD/GEF Slovenia Water Pollution
Reduction project was organised in Ljubljana on 17 June 2002 by FAO in cooperation with the
Regional Environmental Centre for Central and Eastern Europe - Country Office Slovenia (REC
Slovenia). The workshop was held in the premises of the Slovenian Chamber of Commerce and
Industry. Invitations were sent by REC Slovenia to all major institutions and individuals
representing all stakeholder groups: local FI, potential borrowers in the municipal, industrial and
agricultural sector, government institutions, EC Delegation, regional development agencies,
interest groups and organisations, other donors, environmental consultancy companies, as well as
NGOs, individual experts and media.
45. Registered participants were provided with a short project description and a workshop
invitation outlining the goals of the workshop. The workshop aimed at: (i) informing potential
beneficiaries and other stakeholders about the project and its status of preparation; (ii) discussing
the project objectives and approaches with the stakeholders to reflect their needs and priorities in
the project design; (iii) getting stakeholders feedback on project design, planned implementation
and evaluation, as well as lessons learned from similar projects in Slovenia; (iv) identifying
potential interested beneficiaries, other possible partners for project implementation and target
audiences for future information dissemination;
46. Besides project formulation team members the workshop was attended by 39
participants, representing all target groups:
- 13 enterprise representatives,
- 5 consultancy organisation representatives,
- 8 municipality representatives,
- 3 environmental NGO representatives,
- 6 bank representatives,
- 2 ministry representatives,
- 1 Ekofund representative.
- 1 Delegation of the European Commission in Slovenia representative
Workshop proceedings
47. The workshop was opened by Ms Milena Marega, Director of REC Slovenia, who
presented the goals of the workshop, the Aarhus Convention on public access to environmental
information, public participation and access to justice, as well as EU, national and GEF policies
on the same subject and their relevance to the strategy on public involvement in the planned
project.
48. Mr Mitja Bricelj, Adviser to the Government, Ministry of Environment and Physical
Planning, presented the policies and programmes of ICPDR, recent activities and reports that were
prepared in Slovenia within the Danube Pollution Reduction Programme, Slovenian legislation
related to water pollution and present and future activities of Slovenian government on protecting
the Danube River Basin.
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
11
49. Mr Ivan Zavadsky, Project Manager, UNDP DRP, presented GEF Strategic
Partnership in the Danube/Black Sea Basin focusing on UNDP DRP, its objectives and current
status of implementation, financial mechanisms, as well as on its NGO-oriented activities.
50. Ms Nadja Cvek, Associate Banker, EBRD Slovenia Office presented EBRD strategy
and activities in Slovenia focusing on the environmental sector.
51. Mr Vlaho Kojakovic and Ms Mari Linnapuomi, Project Formulation Team, FAO
Investment Centre, presented EBRD/GEF Slovenia Water Pollution Reduction Project as it is
currently seen by the project formulation team, emphasising the need to receive stakeholders’
feedback and discuss the project proposal in that light.
52. In the discussion, moderated by Ms Milena Marega, the following points were raised:
Needs for environmental investments and barriers faced
53. There is an increasing need for environmental investments in Slovenian industrial and
municipal sector in order to comply with national legislative deadlines and EU requirements for
emissions reduction. But there are several barriers that both sectors face in accessing financing:
a) according to Slovenian legislation municipalities are allowed to borrow only 10% of
the yearly budget and several municipalities are already overdebted; furthermore,
b) many Slovenian municipalities are small in size and for this reason have particular
problems with financing big investments. The process of establishment of regions is
too slow
c) interest rates are high and standard loan repayment periods are too short for
environmental investments;
d) many investors, in particular SMEs and small municipalities, have difficulties with
providing satisfactory collateral;
e) many support schemes/state subsidy schemes are difficult to use because of extensive
and complex application procedures;
f) new State Aid regulations restrict the financing of industrial pollution reduction
investments with wastewater tax reduction funds.
Relation of the proposed project with other relevant support schemes
54. The planned project aims to be complementary to the existing programmes but, to
ensure this, the relationship and linkages with other relevant support schemes should be clarified.
This applies, in particular, to Ekofund, with which the proposed Credit Facility risks to compete.
The need for clarification also concerns EU programmes, especially with regard to co-financing
possibilities. Finally, it applies to ICPDR work to which the proposed project should contribute
and from which a formal approval should be sought. Ekofund and ICPDR issues were raised in
particular by the representative of the MOEPP who strongly criticised the project for lack of
cooperation with, and lack of involvement of, the Government authorities in the preparation
process. Project Formulation Team responded with the argument that MOEPP and ICPDR are
aware of the project and have been consulted several times during project preparation.
55. Regarding the relations with and use of experiences of Ekofund, the Project
Formulation Team stated that the results of a recent demand assessment show that the need for
investment funding is considerably higher than available funding supply. Considering this fact the
new Credit Facility will increase the availability of environmental funding possibilities and will
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
12
decentralise the system with the involvement of local banks who have ability to approach the
customer via the extensive network of their branch offices.
56. During the development of project concept the communication with Ekofund was
established and their experiences considered in project formulation. The planned Credit Facility
aims to be complementary to Ekofund and should be implemented in partnership.
57. According to Ekofund representative, the planned project could be complementary in
case that the credit line will not be classified as State Aid (see below). Otherwise it will clearly
become a competing activity.
State aid regulation and its applicability to the proposed project
58. The issue of State Aid regulation and its applicability to the proposed project was
raised several times. Workshop participants commented that because of GEF involvement in the
project, it is very probable that the credit line will be implemented with the involvement of the
government and considered as State Aid. EBRD representative assured that the credit line will not
be classified as State Aid, but Project Formulation Team will request further clarification from the
State Aid Commission of the Ministry of Finance.
Technical assistance, procedures
59. Investors (SME and small municipalities) need technical assistance in preparing
bankable investment plans and in technical preparation of investments. In order to help investors,
procedures for acquiring credits should be simple and clear.
Eligibility of environmental investment projects
60. As a reply to a participant’s question related to eligibility of projects, the project
formulation team explained that applications will be assessed on the base of set of criteria that
include environmental dimensions. Priority will be given to projects that will significantly
contribute to pollution reduction, use of innovative technology, etc.
61. Participants raised additional questions related to (i) eligibility of the Adriatic
drainage area; (ii) whether a maximum size for eligible companies would be established; (iii)
whether activities addressing indirect (diffuse) pollution, such as landfills, would be eligible; (iv)
whether public works aiming at removing polluted sediments from rivers would be eligible.
Clarification was sought from the Project Formulation Team.
Loan price
62. As a reply to the EBRD representative’s question related to the maximum loan price,
the workshop participants responded that the highest acceptable is the actual loan price offered by
Ekofund.
Announcement and information dissemination, selection of local banks,
63. Information was requested on how EBRD will select participating banks, and how the
launching of the Credit Facility will be announced. Reference was made to established Ekofund
practice of publishing calls for tender. The Project Formulation Team explained that special
criteria would be defined for the selection of local banks. Information on the Credit Facility will
be disseminated through EBRD information channels, through local banks involved in the
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
13
scheme, and through other information points that are planned in the project. For the
announcement also the Official Journal and main newspaper Delo will be used.
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
14
Public involvement and role of NGOs
64. Questions on further public involvement and the role of NGOs in the project were
posed. REC's participation in the preparation of a public involvement strategy for the project was
explained and the principles of the strategy briefly presented. Due to the fact that public
involvement in project design, implementation and evaluation is new in Slovenia, workshop
participants were not clear enough about their role and their expected contribution. REC Slovenia
representative repeated the intention of the project formulation team to prepare a strategy on
informing and involving public. Main steps in implementation of this open and transparent
strategy will be prepared in co-operation with REC Slovenia. NGOs are invited as one of most
important stakeholders groups and should play their role in the project. It was advised to reserve
some funding in project budget for participation of NGOs.
Experiences in Slovakia
65. A precedent case of an EBRD attempt to establish an environmental credit facility in
Slovakia in the early 1990s was raised in the margins of the workshop. Lessons learned from this
unsuccessful experience include that (i) the subsidy element, if not well designed, risks to be
absorbed by participating local FI, without benefiting the end-user. This results in an expensive,
i.e. unattractive, financial product and consequently to slow/no disbursement of the funds; (ii)
local FI are not interested in substantial in-house capacity-building in environmental matters but
rather contract this work out. The related procedures should be as simple as possible.
Next steps
66. The project formulation team informed participants on next steps, namely, finalisation
of the project proposal, including incorporation of workshop results, and its submission to GEF
Council and EBRD Board of Governors. If these bodies agree with the proposed approach,
approval is expected by end-2002. The approval is likely to be followed by an
information/marketing workshop as well negotiations between EBRD and local banks interested
in participating to the project. The project formulation team will keep participants updated on
progress in project preparation.
67. A workshop report will be prepared by REC Slovenia. Participants will be provided
with an opportunity to comment on the draft report before its finalisation and circulation on the
REC Slovenia website. Workshop presentations will also be made available on the website.
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
15
Attachment 1. List of participants
Organisation Category Name Town
Delamaris d.d. company Andrej Poljak Izola
Delegacija evropske komisije ECD Emil Treteuiamm Ljubljana
Društvo za varstvo voda "Dreta" NGO Franc Bastl Gornji grad
Ekološko razvojni sklad Republike Slovenije d.d. Ekofund Igor Čehovin Ljubljana
E-NET consultancy Jorg Hodalič Ljubljana
Evropska banka za obnovo in razvoj bank Nadja Cvek Ljubljana
Evropska banka za obnovo in razvoj, BAS Programme bank Miha Švent Ljubljana
Farma Stična company Janez Ponebšek Stična
GZS - ZTOUPI Jadranka Manasovič Ljubljana
Henkel Slovenija d.o.o. company Otilija Čuček Maribor
Inštitut za geografijo consultancy Aleš Smrekar Ljubljana
Javno podjetje Vodovod - kanalizacija company Aleš Hojs Ljubljana
Komunala Radovljica company Drago Finžgar Radovljica
Lek d.d. company Martin Rahten Ljubljana
Limnos d.o.o. consultancy Bogdan Macarol Ljubljana
Luka Koper INPO d.o.o. company Zlatko Fuks Koper
Mestna občina Ljubljana, Zavod za varstvo okolja municipality Dušan Ciuha Ljubljana
Mestna občina Ljubljana, Zavod za varstvo okolja municipality Marjana Jankovič Ljubljana
Ministrstvo za kmetijstvo, gozdarstvo in prehrano ministry Suzana Stražar Ljubljana
Nacionalni inštitut za biologijo consultancy Ciril Krušnik Ljubljana
Nova ljubljanska banka d.d. bank Maja Gazvoda Ljubljana
Nova ljubljanska banka d.d. bank Predrag Milenkovič Ljubljana
Nova kreditna banka Maribor d.d. bank Matjaž Južnič Ljubljana
Nova ljubljanska banka d.d. bank Jelka Nučič Ljubljana
Občina Grosuplje municipality Jože Petarka Grosuplje
Občina Kamnik municipality Franc Resnik Kamnik
Občina Slovenska Bistrica municipality Tomaž Pristovnik Slovenska Bistrica
Občina Škofja Loka municipality Boštjan Coznar Škofja Loka
Občina Trzin municipality Marta Gregorčič Štok Mengeš
Oikos d.o.o. consultancy Katja Podlipnik Vir pri Domžalah
Paloma tovarna lepenke Ceršak d.d. company Alfred Pfifer Ceršak
Pomurke mlekarne d.d. company Ludvik Bratuša Murska Sobota
R.Z.S. - kom. consultancy Anton Privošnik Gomilsko
Regijsko društvo ekološkega gibanja Ivančna Gorica NGO Franc Hegler Ivančna Gorica
Regionalni center za okolje za srednjo in vzhodno Evropo REC Milena Marega Ljubljana
Ribiška zveza Slovenije NGO dr. Miha Janc Ljubljana
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
16
RZS, KGZNG, Občina Ilirska Bistrica municipality Zlatko Janko Ilirska Bistrica
Slovenske železarne Acroni d.d. company Banko Banko Jesenice
TSP tovarna sukancev in trakov d.d. Maribor company Dolores Tručl Maribor
UNDP/GEF Danube Project Ivan Zavadsky Wien, Austria
Ministry of Environment and Spatial Planning ministry Mitja Bricelj Ljubljana
Unior d.d. Zreče company Janez Sevšek Zreče
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
17
ANNEX 5
ENVIRONMENTAL ELIGIBILITY CRITERIA
INTRODUCTION
68. The European Bank for Reconstruction and Development (EBRD) in cooperation
with the Global Environment Facility (GEF) plans to support the National Pollution Reduction
Project in Slovenia. The objective of the project is to demonstrate the use of financial
intermediaries in achieving the reduction of industrial, municipal, and agricultural point source
water pollution in the country. This will be accomplished through the creation of a partly
subsidised Credit Line facility (the “Facility” or CF) to local financial intermediaries (FI) in
Slovenia with the aim of financing investments that reduce water pollution in the Danube river
basin (DRB).
69. This document presents the environmental eligibility criteria and associated
procedures to evaluate investment project proposals submitted for consideration for funding under
the Facility. The eligibility criteria ensure that the GEF resources which complement EBRD
resources provided through the Facility, finance the incremental costs of generating global
environmental benefits as described in the GEF Operational Strategy and Operational Program 8
in the International Waters Focal Area2. The proposed criteria do not cover the financial or other
loan-related criteria that local FIs, the Government of Slovenia (GOS), and/or the EBRD might
apply to evaluate loan applications.
70. The eligibility criteria are consistent with the requirements and objectives of
Slovenian and EU policies and legislation which cover water quality and wastewater treatment as
well as with relevant strategies and programs of GEF, EBRD and International Commission for
the Protection of the Danube River (ICPDR).
OBJECTIVES
71. The objective of the EBRD/GEF Credit Facility is to provide financial support for the
implementation of trans-boundary pollution reduction investment projects. The project aims to
support private and public sector investments that would reduce pollutants (nutrients and toxic
substances) that are responsible for the degradation of the aquatic environment in the Danube
River Basin and the Black Sea. The international cooperation efforts in the Danube basin are
based on the “Convention on Co-operation for the Protection and Sustainable Use of the Danube
River” (Danube River Protection Convention). The Convention became legally binding for the
entire region in October 1998. The implementation of the Convention is carried out under the
guidance of the ICPDR. The policy documents agreed under the auspices of the ICPDR, in
particular the Strategic Action Plan or SAP (1995 and 1999 revision) and the Joint Action
Programme or JAP (2000), as well as earlier and ongoing GEF programmes supporting ICPDR
work, namely Danube Pollution Reduction Programme or DPRP (1997-1999) and the GEF
Strategic Partnership on the Danube/Black Sea Basin (2001-2007), have served as the overall
framework for the project3.
2 “The overall strategic thrust of GEF-funded international waters activities is to meet the agreed incremental costs of: ... (c)
implementing measures that address the priority transboundary environmental concerns” (GEF Operational Strategy, chapter
4; see: http://www.gefweb.org/).
3 For ICPDR and related GEF programmes, see http://www.icpdr.org/pls/danubis/DANUBIS.navigator.
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
18
72. ICPDR programmes divide pollution reduction projects in the DRB into four groups:
industrial, municipal, agricultural and wetlands projects. While the proposed EBRD/GEF Credit
Facility would focus on private sector projects in industry it would not exclude municipal and
large-scale agricultural projects. Industrial projects provide significant opportunities for water
pollution reduction in the DRB but their implementation to date has been constrained by, amongst
other things, the lack of an appropriate and affordable funding mechanism.
73. In line with ICPDR policies and DPRP results, the Credit Facility would emphasise
reducing nutrient pollution but would also be available to “hot spot” polluters identified in the
ICPDR/GEF Slovenian National Review under the DPRP (1998)4 and other industries discharging
permanent toxic pollutants.
74. Examples of possible sub-projects to be funded through the Facility include:
Industry:
- construction, restoring and upgrading of industrial sewer systems and
wastewater treatment plants (WWTP);
- upgrading of industrial processes with best available technologies
(BAT) to minimise toxic/nutrient release;
- expansion of discharging facilities;
- industrial retrofitting to optimise feed stock inputs and minimise
process waste;
- proper storage, treatment disposal and recording of hazardous
substances;
- prevention of water pollution from landfills;
- reduction of the risk of spills and accidental discharges;
- re-use and recycling projects.
Agriculture:
- proper treatment of wastewater discharges by farms;
- construction of WWTPs;
- re-use / recycling of agricultural waste;
- agricultural use of slurry.
Municipalities
- construction of WWTPs;
- construction/extension/renovation of sewer systems.
75. Of the total investment cost estimated for each sub-project, the incremental cost
associated with the generation of global environmental benefits would be provided by GEF in the
form of a grant. The rest, considered as basic investments (baseline costs), is expected to be
provided from the loan component of the Credit Facility, provided by EBRD, as well as from
domestic or other international financial sources, (company’s own resources, national
environmental funds, commercial loans, EU funds etc.). Loans from the Credit Facility would be
disbursed directly by local FIs participating in the Facility. The GEF component would be
included as a cash advance/lumpsum payment disbursed upon completion of the environmental
investment.
4 See http://www.icpdr.org/pls/danubis/DANUBIS.navigator.
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
19
ORGANISATION AND SCOPE
76. The proposed eligibility check described below would serve to identify potential subborrowers
among applicants soliciting loans from the Credit Facility who would qualify for GEF
funding in support of investments which generate global environmental benefits. For this purpose,
the proposed criteria would enable the selection of investments which:
(i) are consistent with Slovenian and EU policies and legislation as well as with
the policies and programmes of ICPDR, GEF and EBRD; and
(ii) contribute to reducing trans-boundary water pollution associated with nutrient
sources and selected priority substances, principally toxic substances, when
appropriate.
The achievement of global benefits in the form of a reduction of pollution in the Danube
River basin would be ensured through investments which would lead to:
(i) environmental benefits that would be achieved sooner than those resulting
from compliance with national/EU requirements;
(ii) environmental benefits that are greater than those resulting from compliance
with national/EU requirements; and/or
(iii) demonstration of innovative technologies with potential for replication.
77. The criteria consider both national emission standards and stricter emission
conditions, which apply to industries discharging into ecologically sensitive waterbodies (see
Attachment 1), based on water quality objectives for these water bodies. Water quality
considerations have been included in the proposed selection criteria to reflect EU and national
policies on environmentally sensitive water bodies.
78. A step-wise procedure for the eligibility check, with participation of both the local FI
and an independent Environmental Expert, is proposed. This procedure, described below, would
consist of: (i) a preliminary screening of the loan applications by the relevant local FI to establish
that basic pre-conditions are met; (ii) an evaluation of the applications by the environmental
expert; and (iii) a final decision by local FI.
ELIGIBILITY CRITERIA
79. This section presents the proposed eligibility criteria in the form of matrices
including, for each criterion, a description and/or background, a field of application, and an
indication of how compliance with the criterion should be demonstrated. Pre-conditions (i.e.,
screening criteria) are presented (Matrix 1) followed by evaluation criteria (Matrix 2).
80. The local FIs will screen all loan applications they receive for consideration of
support under the Credit Facility to ensure that the pre-conditions listed below are met. Noncompliance
implies that the application is not suitable for further consideration.
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
20
Matrix 1: Environmental Screening Criteria
Criterion Description/Background Demonstration of meeting the criterion
1) Characterised as a Water Pollution
Reduction Project
Only borrowers that apply for funds for
investment projects which lead to a
reduction in water pollution will be
further considered.
Suitable projects include:
Industry
construction, restoring and upgrading of industrial sewer
systems and WWTP;
upgrading of industrial processes with BAT to minimise
toxic/nutrient release;
expansion of discharging facilities;
industrial retrofitting to optimise feed stock inputs and
minimise process waste;
proper storage, treatment disposal and recording of
hazardous substances;
prevention of water pollution from landfills;
reduction of the risk of spills and accidental discharges;
re-use and recycling projects;
Agriculture
proper treatment of wastewater discharges by farms;
construction of WWTPs;
re-use and recycling of agricultural waste;
agricultural use of slurry;
Municipalities
construction of WWTPs;
construction/extension/renovation of sewer systems.
2) Location of the polluter in the
Slovenian portion of the Danube river
basin
The Credit Facility operates in the
context of ICPDR and GEF Strategic
Partnership in the DRB whose main
objective is the reduction of water
pollution in the DRB.
Address(es) of the enterprise as given in the registration form. A map of
Slovenia depicting the location(s) of the enterprise will be provided.
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
21
3) In the case of Municipal WWTPs,
the volume of emissions to be treated
should not exceed 40,000 PE5
Improving wastewater treatment in big
municipalities is prioritised in national
programmes and EU accession –related
support schemes because these
municipalities need to comply with the
EU Urban Wastewater Directive in the
shortest deadlines. To ensure
complementarity, the Credit Facility
will target smaller municipalities.
Estimate of the size of the municipality in PE.
Matrix 2: Environmental Evaluation Criteria
81. These criteria will be applied by an Environmental Expert contracted under the project to advise the local FIs on the suitability of a
proposed investment project for partial GEF financing. At least one of the following three criteria needs to be satisfied for the investment proposal
to qualify for the Credit Facility.
Criterion Field of application Description/Background Demonstration of meeting a
criterion
1) Investment will help the
borrower to come into
compliance with national
standards before the deadline(s)
established in legislation and
corresponding licences
(minimum 1 year before)6.
A) Polluters which are not in
compliance with national
emission standards on nutrient
pollution;
B) Polluters which are not in
compliance with national
emission standards on priority
For Category A and C borrowers, reduction in
nutrient (N, P) pollution is prioritised in ICPDR
programmes, in particular in the DPRP.
For Category B borrowers, a list of priority
substances will be established by ICPDR (see JAP,
p 23) taking into account EU requirements. Before
For Category A and B borrowers:
- Comparison of technically
certified estimated emission
reductions with standards
established by the relevant
legislation; and
5 In order to support cooperation between municipalities, this limitation will not apply to cases where several small municipalities construct a common WWTP.
6 A common deadline for investments to be financed from the Credit Facility cannot be established since the legislative deadlines are mostly based on sectoral decrees and
thus vary from sector to sector. In addition, even if EU-harmonised legislation is already in force for the majority of industries, in some sectors, regulations are still
under development.
7 Or, in the case of pollution “hot spots” and other industries discharging permanent toxic substances (see Attachment 1 to Main Report), priority substances.
8 In some cases, exceptions to these deadlines are granted for polluters, which have difficulties in achieving compliance. These companies are normally required to
present a time-scheduled plan for achieving standards. An investment that accelerates the implementation of this plan would also be eligible under this criterion.
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
22
substances, and are listed as
pollution “hot spots” in the
DPRP (see Attachment 1 to
Main Report) or other industries
discharging permanent toxic
substances;
C) Polluters which are in
compliance with national
emission standards but are
required to meet stricter effluent
conditions on nutrients7 because
they discharge – directly or
indirectly – into sensitive
waterbodies for which water
quality standards on nutrients
have been established
this list is established, EU lists of priority
substances will be used (see Attachment 2).
Emission standards for big industrial and
agricultural polluters are established in the IPPC
directive. The directive is expected to apply to 130
companies in Slovenia. The deadline for achieving
compliance with IPPC is year 2007, when
Slovenia should fully implement the Directive.
Fifteen companies have a company-specific
extension until 2011.
Other national and EU legislation establishes
emission standards and related deadlines, mainly
on a sectoral basis, for smaller industrial and
agricultural enterprises as well as for
municipalities (see Attachment 3). These form the
basis for company-specific licences.89
Concerning Category C borrowers, water quality
standards have been or are in the process of being
established on the basis of national and EU
legislation for specific waterbodies related to their
ecological characteristics or their use (examples
include: sensitive areas as defined in EU Water
Framework Directive (WFD), wetlands, habitats of
endangered species, drinking water sources,
bathing waters, significant impact areas as defined
by ICPDR). See Attachment 1.
- An implementation schedule
attached to the loan application
committing the borrower to an
investment programme which
will achieve the required
standards one year before the
deadlines (or earlier).
For Category C borrowers,
- Demonstration that specific
effluent conditions, and related
deadlines, apply to the
borrower; and
- Demonstration of how the
investment would contribute to
meeting these conditions; and
- Implementation schedule for
the proposed investment (and
possibly other related
measures) demonstrating that
the conditions will be achieved
before the deadline.
9 In some cases, national emission standards may not apply to indirect dischargers. However, municipalities have established standards, based on national guidelines, for
effluents discharged in their sewage system. An investment that would accelerate the achievement of these standards would also be eligible under this criterion.
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
23
2) Investment will help the
borrower to reduce nutrient
pollution beyond national
standards or polluter-specific
effluent conditions established
in legislation and corresponding
licences.
In the case of DPRP “hot spots”
and other industries discharging
permanent toxic substances (see
Attachment 1 to Main Report),
reductions in emissions of
priority substances would also
be eligible.
This criterion allows the Credit
Facility to reach polluters which
are already in compliance with
national standards but are
interested in exceeding them in
order to improve downstream
water quality.
Improvement of water quality is a strategic priority
for Slovenia established e.g. in the National
Environmental Protection Programme (NEPP).
This criterion also reflects Slovenian commitment
to the ALARA principle (As Low As Reasonably
Achievable), involving both technological
approach (BAT) as well as siting of activities
(physical planning).
- Demonstration that the
borrower is in compliance with
national emission
standards/polluter-specific
effluent conditions;
-
- An investment programme,
with a technically certified
estimate of emission reductions
demonstrating that the
borrower will exceed relevant
national standards/effluent
conditions.
3) Introduction of innovative
technology reducing nutrient
pollution
In the case of DPRP “hot spots”
and other industries discharging
permanent toxic substances (see
Attachment 1 to Main Report),
reductions in emissions of
priority substances would also
be eligible.
All borrowers. This criterion is satisfied if the loan will be used to
invest in the application of new, environmentally
sound, and innovative technology which has
significant potential for nutrient pollution
reduction as well as replication potential in the
DRB.
Both process-related and end-of-pipe technologies
are eligible under this criterion.
- Comparative technology
assessment supported by
scientific/empirical data on
successful pilot or industrial
scale implementation; and
- Demonstration of replication
potential based on specified
criteria (e.g. the number of
potential users of the proposed
technology in the DRB)
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
24
OTHER REQUIREMENTS
82. In addition to meeting one or more of the criteria cited above, to qualify for a GEFsupported
loan from the Credit Facility, a sub-borrower would have to satisfy the following two
conditions. The fulfilment of these conditions will be assessed by the Environmental Expert.
(i) Cost-effectiveness. The proposed investment should be, in the long term, the least-cost
option for achieving intended emission reductions or, alternatively, it should generate
additional environmental or other benefits, which justify higher costs. This condition will be
assessed by: (a) estimating the volume of nutrients and other water pollution reduction per
$US of funds invested and per year of operation; (b) providing a description of alternative
emission reduction measures (related e.g. to management, operation and maintenance, or – for
end-of-pipe investments – cleaner production) considered during the preparation of the
investment proposal, and reasons for rejection; and, when applicable, (c) including a
description of additional environmental or other benefits from the proposed investment.
(ii) Monitoring of Effluent Quality. To ensure that the Credit Facility leads to intended
pollution reduction, each investment will need to be carefully monitored. This will be ensured
by requiring an Environmental Monitoring Plan specifying how effluents will be monitored.
The plan should cover: the water pollution parameters to be monitored (such as BOD, COD,
suspended solids and toxics), monitoring frequency, monitoring methods and responsibilities,
measures in case of unsatisfactory monitoring results, and provision of monitoring
information to the Credit Facility. If needed, the sub-borrower should revise the plan on the
basis of comments from the Environmental Expert. After the sub-project is operational, the
Environmental Expert will undertake a site-visit to ensure successful project completion
(defined for the purposes of this project as the point of successful installation and confirmed
operation of the loan-financed equipment). The Environmental Expert will continue
monitoring the environmental performance of the sub-project throughout the loan payback
period and will have the right to make a short-notice site visit to any company to verify the
reported results.
(iii) Compliance with health, safety and environmental (HSE) requirements. The loan
applicant has to demonstrate compliance with HSE regulations (or present an action plan with
allocated resources to achieve compliance within a specified time frame) in areas other than
water pollution.
PROCEDURES FOR GEF ELIGIBILITY CHECK
83. A step-wise procedure is proposed for checking the eligibility of loan applications:
(i) Loan applications, together with supporting information, are presented by the
sub-borrower to a local FI participating to the Credit Facility. To minimise additional
paperwork, the applications should be presented using the normal loan application
form of the local FI, complemented with a short environmental section (standard
format to be developed) for the purpose of the GEF eligibility check.
(ii) Local FI undertakes a preliminary assessment of the applications using the
environmental preconditions presented in Matrix 1. Loan applications that are
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
considered potentially eligible, together with supporting environmental information,
are sent to the Environmental Expert.
(iii) The Environmental Expert checks the GEF eligibility of each loan application
using the evaluation criteria presented in Matrix 2. To undertake the eligibility check,
the Environmental Expert uses the information provided by the sub-borrower to local
FI. If needed, the Environmental Expert requests additional information from the subborrower,
and undertakes site visits to evaluate the application.
(iv) For every loan application received, the Environmental Expert provides the
local FI with a completed eligibility check sheet (format to be developed) indicating:
whether the loan application is eligible under the evaluation criteria and which
criteria it meets;
whether the environmental monitoring plan, as presented by the sub-borrower, is
adequate and, if not, what improvements in the plan are needed before the loan is
approved;
whether the sub-borrower’s business meets, or has action plan and allocated
resources to meet, national health, safety and environmental permit and other
requirements in areas not covered by this project (i.e. other than water pollution);
and
what, if any, environmental conditions need to be attached to the loan.
Unless otherwise agreed with the local FI, the Environmental Expert completes the
eligibility check within 10 days of receiving the application.
(v) The local FI, using its own financial criteria, takes a decision on approving or
rejecting an environmentally eligible application for a loan from the Credit Facility10.
(vi) For approved loans, the local FI provides the Environmental Expert with the
final monitoring plan for sub-project completion test and subsequent environmental
monitoring of the investment (see Annex 2).
10 For loan applications that are not considered environmentally eligible for the Credit Facility, the local FI may
grant loans from other resources.
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
Attachment 1. Initial List of Environmentally Sensitive Water bodies in Slovenia
Location Detailed Description Area
km2
Sava-Kranjska Gora Povirje Save 44.61
Pišenca Vodozbirna površina Pišence 37.68
Sava-Rute Porečje Save od sotočja s Pišenco do sotočja z Bistrico 79.70
Bistrica (Sava
Dolinka)
Vodozbirna površina Bistrice v porečju Save Dolinke 47.36
Sava-Jesenice Porečje Save od sotočja z Bistrico do sotočja z Javornikom z vodozbirno
površino Javornika
86.21
Sava-Moste Porečje Save od sotočja z Javornikom do sotočja z Radovno- Moščansko
jezero
40.78
Savica Povirje Savice od izvira do vtoka v Bohinjsko jezero 67.55
Cerkniško jezero Vodozbirna površina Cerkniškega jezera do ponikev 270.42
Javorniški tok Vodozbirna površina Javorniškega toka 278.12
Pivka z Nanoščico Vodozbirna površina Pivke in Nanoščice 234.14
Unica Kraška vodozbirna površina Ljubljanice od izvirov Unca do izvirov na
Barju
231.99
Logaščica Vodozbirna površina Logaščice do ponikev 83.13
Dobravka Povirje Krke od izvira do sotočja z Rašico 106.25
Rašica Vodozbirna površina Rašice 54.09
Kraška Krka Porečje Krke od sotočja z Rašico do sotočja z Višnjico 106.50
Višnjica Vodozbirna površina Višnjice 75.98
Krka-Šmihel Porečje Krke od vtoka Višnjice do sotočja z Radešico 531.22
Dobre potok Vodozbirna površina Dobrega potoka 231.32
Radešica Vodozbirna površina Radešice 187.12
Krka-Meniška vas Porečje Krke od sotočja z Radešico do sotočja s Sušico 1.13
Sušica (Straža) Vodozbirna površina Sušice v porečju Stražke Krke 35.96
Krka-Straža Vodozbirna površina Krke od sotočja s Sušico do vtoka Potoka 17.59
Potok (Krka) Vodozbirna površina Potoka v porečju Krke 11.76
Krka-Zalog Porečje Krke od vtoka potoka do sotočja s Temenico 3.75
Temenica-Sabrače Povirje Temenice od izvira do sotočja z Bukovico 13.35
Bukovica Vodozbirna površina Bukovice 12.19
Temenica-Trebenje Porečje Temenice od sotočja z Bukovico do ponikev pri Ponikvah 77.74
Temenica-Mirna Peč Porečje Temenice od Ponikev do izvira pri Luknji 63.04
Temenica-Prečna Povirje Temenice od izvira pri Luknji do vtoka v Krko 11.60
Krka-Češča vas Porečje Krke od sotočja s Temenico do sotočja z Bršljinskim potokom 13.34
Bršljinski potok Vodozbirna površina Bršljinskega potoka 38.09
Krka-Portoval Porečje Krke od sotočja z Bršljinskim potokom do sotočja s Težko vodo 1.08
Težka voda Vodozbirna površina Težke vode 90.94
Krka-Novo mesto Porečje Krke od sotočja s Težko vodo do sotočja z Rateškim potokom 35.43
Rateški potok Vodozbirna površina Rateškega potoka 25.45
Krka-Otočec Porečje Krke od sotočja z Rateškim potokom do sotočja s Čadraškim
potokom
45.53
Čadraški potok Vodozbirna površina Čadraškega potoka 28.07
Krka-Dobrava Porečje Krke od sotočja s Čadraškim potokom do sotočja s Raduljo 23.15
Radulja-Štatenberg Povirje Radulje od izvira do sotočja z Gostinco 18.33
Gostinca (Radulja) Vodozbirna površina Gostince v porečju Radulje 9.04
Radulja-Radove Porečje Radulje od sotočja z Gostinco do sotočja z Laknico 24.56
Laknica Vodozbirna površina Laknice 20.54
Radulja-Zalog Porečje Radulje od sotočja z Laknico do sotočja z Dolskim potokom 15.71
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
Dolski potok Vodozbirna površina Dolskega potoka 19.68
Radulja-Škocjan Porečje Radulje od sotočja z Dolskim potokom do vtoka v Krko 9.91
Krka-Sv.Miklavž Porečje Krke od sotočja z Raduljo do sotočja z Račno 3.84
Račna Vodozbirna površina Račne 42.85
Krka-Prekopa Porečje Krke od sotočje z Račno do sotočja s Senušo 69.91
Senuše Vodozbirna površina Senuše 33.25
Krka-Podbočje Porečje Krke od sotočja s Senušo do sotočja s Sušico 49.87
Sušica Vodozbirna površina Sušice v porečju Kostanjeviške Krke 23.75
Krka-Krška vas Porečje Krke od sotočja s Sušico do vtoka v Savo 67.52
Povirje Pesnica Povirje Pesnice od izvira do sotočja z Glavčnico 0.22
Glavčnica Vodozbirna površina Glavčnice 0.88
Pesnica-Jurij Porečje Pesnice od sotočja z Glavčnico do sotočja z Radečkim potokom 8.05
Radečki potok Vodozbirna površina Radečkega potoka 7.10
Pesnica-Kungota Porečje Pesnice od sotočja z Radečkim potokom do sotočja s Svečino 8.20
Svečina Vodozbirna površina Svečine 17.39
Pesnica-Gradiška Porečje Pesnice od sotočja s Svečino do sotočja z Dobranjskim potokom 17.71
Dobranjski potok Vodozbirna površina Dobranjskega potoka 7.90
Pesnica-Dvor Porečje Pesnice od izvira do sotočja s Cirknico 3.13
Cirknica Vodozbirna površina Cirknice 15.84
Pesnica-Vosek Porečje Pesnice od sotočja s Cirknico do sotočja z Jareninskim potokom 13.70
Jareninski potok Vodozbirna površina Jareninskega potoka 20.01
Pesnica-Vukovje Porečje Pesnice od sotočja z Jareninskim potokom do sotočja z Jakobskim
potokom
0.88
Jakobski potok Vodozbirna površina Jakobskega potoka 19.92
Pesnica-Pristavsko
jezero
Porečje Pesnice od sotočja z Jakobskim potokom do sotočja z Jablanškim
potokom
9.54
Zgornja Ščavnica Povirje Ščavnice od izvira do Spodnje Ščavnice 34.73
Spodnja Ščavnica Porečje Ščavnice od Spodnje Ščavnice do Stavešincev 31.44
Ščavnica-Grabonoš Porečje Ščavnice od Stavešincev do sotočja s Turjo 91.19
Ledava-Černelavci Povirje Ledave od izvira do Černelavcev 172.49
Povirje Dragonje Povirje Dragonje od izvira do sotočja s Pinjevcem 27.91
Pinjevec Vodozbirna površina Pinjevca 20.15
Dragonja-Grič Porečje Dragonje od sotočja s Pinjevcem do sotočja s Poganjo 19.15
Dragonja-Sečovlje Porečje Dragonje od sotočja s Poganjo do vtoka v morje 4.16
Sečoveljske soline Povirje Sečoveljskih solin 4.35
Drnica Vodozbirna površina Drnice 33.04
Obala od vtoka Drnice
do vtoka Badaševice
Vodozbirna površina obale od vtoka Drnice do vtoka Badaševice 40.16
Badaševica Vodozbirna površina Badaševice 37.68
Obala od vtoka
Badaševice do vtoka
Rižane
Vodozbirna površina obale od vtoka Badaševice do vtoka Rižane 9.20
Kraška Rižana Kraško povirje Rižane 171.32
Rižana Povirje Rižane od izvira do vtoka v morje 47.70
Obala od vtoka Rižane
do vtoka Timava
Vodozbirna površina morske obale od vtoka Rižane do vtoka Timava 88.48
Reka-Trpčane Povirje Reke od izvira do sotočja z Moljo 135.67
Molja Vodozbirna površina Molje 46.12
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
Reka-Ilirska Bistrica Porečje Reke od sotočja z Moljo do sotočja s Posrtvijo 48.61
Posrtev Vodozbirna površina Posrtve 14.45
Reka-Prem Porečje Reke od sotočja s Posrtvijo do sotočja z Mrzlekom 34.55
Mrzlek Vodozbirna površina Mrzleka 49.41
Reka-Suhorje Porečje Reke od sotočja z Mrzlekom do sotočja s Padežem 12.08
Padež Vodozbirna površina Padeža 43.70
Reka-Škoflje Porečje Reke od sotočja s Paleom do ponikev v Škocjanskih jamah 37.24
Spodnji Timav Vodozbirna površina Timava dolvodno od Škocjanskih Jam 447.77
Source Eurowaternet Slovenija
http://nfp-si.eionet.eu.int/ewnsi/index.htm
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
Attachment 2. Priority substances
Priority Toxic Substances identified in the DPRP Slovenia National Review 1998
- Nitrogen (N)
- Phosphorus (P)
- Oil
- Metals
- Cadmium (Cd)
- Mercury (Hg)
- Copper (Cu)
- Nickel (Ni)
- Lead (Pb)
- Zinc (Zn)
- Chromium (Cr)
- Arsenic (As)
- Micropollutants
- Pesticides
- Dichlorodipheniltrichloroethane (DDT)
- , , Hexachlorocyclohexane (HCH)
- Hexachlorocyclohexane (HCH) (lindane)
- Metolachlor
- Atrazine
- Simazine
- Others
- Polychlorinated Biphenyl(s) (PCB)
- Pathogenic bacteria and viruses
- Biological Oxygen Demand (BOD)
- Chemical Oxygen Demand (COD)
EU List of Priority Substances in the Field of Water Policy (Decision 2455/2001/EC)
- Alachlor
- Anthracene
- Atrazine
- Benzene
- Brominated Diphenylethers (Penta, Octa, Deca)
- Cadmium and its compounds
- C 10-13-Chloroalkanes
- Chlorfenvinphos
- Chlorpyrifos
- 1,2-Dichloroethane
- Dichloromethane
- Di (2-ethylhexyl) phthalate (DEHP)
- Diuron
- Endosulfan
- Fluoranthene
- Hexachlorobenzene
- Hexachlorobutadiene
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
- Hexachlorocyclohexane
- Isoproturon
- Lead and its compounds
- Mercury and its compounds
- Naphthalene
- Nickel and its compounds
- Nonylphenols
- Octylphenols
- Pentachlorobenzene
- Pentachlorophenol
- Polyaromatic hydrocarbons
- Simazine
- Tributyltin compunds
- Trichlorobenzenes
- Trichloromethane
- Trifluralin
Indicative List of the Main Pollutants of the EU Water Framework Directive
(2000/60/EEC) and EU Integrated Pollution Prevention and Control Directive
(96/61/EC)
- Organohalogen compounds and substances which may form such compounds in the
aquatic environment
- Organophosphorous compounds
- Organotin compounds
- Substances and preparations, or the breakdown products of such, which have been proved
to possess carcinogenic or mutagenic properties or properties which may affect
steroidogenic, thyroid, reproduction or other endocrine-related functions in or via the
aquatic environment
- Persistent hydrocarbons and persistent and bioaccumulable organic toxic substances
- Cyanides
- Metals and their compounds
- Arsenic and its compounds
- Biocides and plant protection products
- Materials in suspension
- Substances which contribute to eutrophication (in particular, nitrates and phosphates)
- Substances which have an unfavourable influence on the oxygen balance (and can be
measured using parameters such as BOD, COD, etc.).
List of Pollutants for which Excess Emissions have to be Reported to European
Pollutant Emission Register (EPER) under the IPCC Directive (see decision 2000/479/EC)
- Nitrogen
- Phosphorous
- Arsenic and its compounds
- Cadmium and its compounds
- Chromium and its compounds
- Copper and its compounds
- Mercury and its compounds
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
- Nickel and its compounds
- Lead and its compounds
- Zinc and its compounds
- Dichloroethane-1,2 (DCE)
- Dichloromethane (DCM)
- Chloro-alkanes (C10-13)
- Hexachlorobenzene (HCB)
- Hexachlorobutadiene (HCBD)
- Hexachlorocyclohexane (HCH)
- Halogenated organic compounds AOX
- Benzene, Toluene, Ethylbenzene, Xylenes
- Brominated Diphenylether
- Organotin-compounds
- Polycyclic aromatic hydrocarbons-PAH
- Phenols
- Total organic carbon (TOC)
- Chlorides
- Cyanides
- Fluorides.
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
Attachment 3. List of Selected Relevant Legislation
EU Legislation
Bathing Water Directive (76/160/EEC)
Birds Directive (79/409/EEC)
Drinking Water Directive (80/778/EEC) as amended by Directive 98/83/EC
Environmental Impact Assessment Directive (85/337/EEC)
Ground Water Protection Directive (80/68/EEC)
Habitats Directive (92/43/EEC)
Integrated Pollution Prevention and Control Directive (96/61/EC)
Landfills Directive (99/31/EEC)
Major Accidents (Seveso) Directive (96/82/EC)
Nitrates Directive (91/676/EEC)
Plant Protection Products Directive (91/414/EEC)
Sewage Sludge Directive 86/278/EEC
Surface Water for the Abstraction of Drinking Water Directive (75/440/EEC)
Urban Waste Water Treatment Directive (91/271/EEC)
Water Framework Directive (2000/60/EEC)
Water Quality Directive (76/464/EEC) and its daughter directives
Decree on environmental audit for enterprises (1836/93/EEC)
National Legislation
Environmental Protection Act, Official Gazette 32/93 and 1/96
Nature Conservation Act
Regulation on drinking water, Official Gazette 46/97, 52/97, 54/98
Decree on discharging effluents from municipal wastewater treatment plants, Official Gazette
35/96, 90/98, 31/2001
Decree on emission of pollutants from animal farms, Official Gazette, 10/99, 7/2000
Decree on emission of pollution and thermal burden, Official Gazette 35/96
Decree on monitoring of wastewaters, Official Gazette, 35/96
A number of decrees on emission of pollutants from different industries issued since 1996
(see list below in Slovene).
ID Uredbe IME Uredbe Ur. List Skrajšano ime
VOD32 Uredba o emisiji snovi pri odvajanju odpadnih vod iz objektov in naprav za
proizvodnjo alkoholnih pijač in alkohola
7/00 Alkohol
VOD5 Uredba o emisiji azbesta v zrak in pri odvajanju odpadnih voda 75/97 Azbest
VOD33 Uredba o emisiji snovi pri odvajanju odpadnih vod iz objektov in naprav za
proizvodnjo mineralnih vod in brezalkoholnih pijač
7/00 Brezalkoh. pij.
VOD13_4 Uredba o emisiji snovi pri odvajanju odpadnih vod iz objektov in naprav za
proizvodnjo celuloze- nove ali rekonstruirane - magnefitni postopek
10/99 Celuloza-novemagnefitni
VOD13_2 Uredba o emisiji snovi pri odvajanju odpadnih vod iz objektov in naprav za
proizvodnjo celuloze- nove ali rekonstruirane - sulfatni postopek
10/99 Celuloza-nove-sulfatni
VOD13_3 Uredba o emisiji snovi pri odvajanju odpadnih vod iz objektov in naprav za
proizvodnjo celuloze- nove ali rekonstruirane - sulfitni postopek
10/99 Celuloza-nove-sulfitni
VOD13_1 Uredba o emisiji snovi pri odvajanju odpadnih vod iz objektov in naprav za
proizvodnjo celuloze-obstoječe naprave
10/99 Celuloza-obstoječe
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
VOD37_1 Uredba o emisiji snovi pri odvajanju odpadnih vod iz komunalnih čistilnih
naprav.(4. Člen, <2000)
35/96, 90/98, 31/01 Čistilne-4(<2)
VOD37_3 Uredba o emisiji snovi pri odvajanju odpadnih vod iz komunalnih čistilnih
naprav.(4. Člen, med 10000 in 100000)
35/96, 90/98, 31/01 Čistilne-4(10 do 100)
VOD37_2 Uredba o emisiji snovi pri odvajanju odpadnih vod iz komunalnih čistilnih
naprav.(4. Člen, med 2000 in 10000)
35/96, 90/98, 31/01 Čistilne-4(2 do 10)
VOD37_4 Uredba o emisiji snovi pri odvajanju odpadnih vod iz komunalnih čistilnih
naprav.(4. Člen, več kot 100000)
35/96, 90/98, 31/01 Čistilne-4(več kot 100)
VOD37_5 Uredba o emisiji snovi pri odvajanju odpadnih vod iz komunalnih čistilnih
naprav.(5. Člen, med 10000 in 100000)
35/96, 90/98, 31/01 Čistilne-5(10 do 100)
VOD37_6 Uredba o emisiji snovi pri odvajanju odpadnih vod iz komunalnih čistilnih
naprav.(5. Člen, več kot 100000)
35/96, 90/98, 31/01 Čistilne-5(več kot 100)
VOD37 Uredba o emisiji snovi pri odvajanju odpadnih vod iz komunalnih čistilnih
naprav.(6. Člen)
35/96, 90/98, 31/01 Čistilne-obstoječe
VOD20_2 Uredba o emisiji snovi pri odvajanju odpadnih vod iz objektov in naprav za čiščenje
dimnih plinov - elektrarne na črni premog
28/00 Dimni plini-črni
premog
VOD20_1 Uredba o emisiji snovi pri odvajanju odpadnih vod iz objektov in naprav za čiščenje
dimnih plinov - elektrarne na rjavi premog in lignit
28/00 Dimni plini-rjavi
premog
VOD20_3 Uredba o emisiji snovi pri odvajanju odpadnih vod iz objektov in naprav za čiščenje
dimnih plinov - elektrarne na tekoča goriva
28/00 Dimni plini-tekoča
gor.
VOD18 Uredba o emisiji nevarnih halogeniranih ogljikovodikov pri odvajanju odpadnih
vod
84/99 Emisija hal. oglj.
VOD17 Uredba o emisiji kadmija pri odvajanju odpadnih vod 84/99 Emisija kadmija
VOD16 Uredba o emisiji živega srebra pri odvajanju odpadnih vod 84/99 Emisija živega srebra
VOD15 Uredba o emisiji snovi pri odvajanju odpadnih vod iz objektov in naprav za
proizvodnjo fitofarmacevtskih sredstev
84/99 Fitofarmacevtska
Hladilne To je neobstokeča uredba, uporablja se v bazi v primeru iztoka hladilnih vod, ki se
ne merijo.
Hladilna
VOD23_3 Uredba o emisiji snovi pri odvajanju odpadnih vod iz naprav za hlajenje ter naprav
za proizvodnjo pare in vroče vode - kotlovnice.
28/00 Hladilna-kotlovnice
VOD23_2 Uredba o emisiji snovi pri odvajanju odpadnih vod iz naprav za hlajenje ter naprav
za proizvodnjo pare in vroče vode - obtočni hladilni sistemi.
28/00 Hladilna-obtočni
VOD23_1 Uredba o emisiji snovi pri odvajanju odpadnih vod iz naprav za hlajenje ter naprav
za proizvodnjo pare in vroče vode - pretočni hladilni sistemi.
28/00 Hladilna-pretočni
VOD19 Uredba o emisiji snovi pri odvajanju izcedne vode iz odlagališč odpadkov 7/00 Izcedne vode
VOD12 Uredba o emisiji snovi pri odvajanju odpadnih vod iz kafilerij 10/99 Kafilerije
VOD6 Uredba o emisiji snovi pri odvajanju odpadnih vod iz objektov in naprav za
kloralkalno elektrolizo
10/99 Klorakalna elektroliza
Komunalna To je neobstoječa uredba, uporablja se v bazi v primeru komunalnega iztoka, ki se
ne meri.
Komunalna
VOD2_3 Uredba o emisiji snovi pri odvajanju odpadnih vod iz objektov in naprav za
proizvodnjo kovinskih izdelkov _anodiziranje
35/96 Kovine-anodiziranje
VOD2_4 Uredba o emisiji snovi pri odvajanju odpadnih vod iz objektov in naprav za
proizvodnjo kovinskih izdelkov _briniranje
35/96 Kovine-briniranje
VOD2_9 Uredba o emisiji snovi pri odvajanju odpadnih vod iz objektov in naprav za
proizvodnjo kovinskih izdelkov _brušenje, poliranje in odrezavanje, kjer se
uporabljajo sredstva za hlajenje in mazanje na vodni osnovi
35/96 Kovine-brušenje
VOD2_5 Uredba o emisiji snovi pri odvajanju odpadnih vod iz objektov in naprav za
proizvodnjo kovinskih izdelkov _vroče cinkanjein vroče kositranje
35/96 Kovine-cinkanje,
kositranje
VOD2_7 Uredba o emisiji snovi pri odvajanju odpadnih vod iz objektov in naprav za
proizvodnjo kovinskih izdelkov _emajliranje
35/96 Kovine-emajliranje
VOD2_1 Uredba o emisiji snovi pri odvajanju odpadnih vod iz objektov in naprav za
proizvodnjo kovinskih izdelkov _galvanska obdelava
35/96 Kovine-galvane
VOD2_6 Uredba o emisiji snovi pri odvajanju odpadnih vod iz objektov in naprav za
proizvodnjo kovinskih izdelkov _kaljenje
35/96 Kovine-kaljenje
VOD2_8 Uredba o emisiji snovi pri odvajanju odpadnih vod iz objektov in naprav za
proizvodnjo kovinskih izdelkov _lakiranje in prašnato lakiranje
35/96 Kovine-lakiranje
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
VOD2_2 Uredba o emisiji snovi pri odvajanju odpadnih vod iz objektov in naprav za
proizvodnjo kovinskih izdelkov _luženje
35/96 Kovine-luženje
VOD38 Uredba o emisiji snovi pri odvajanju odpadnih vod iz objektov in naprav za
proizvodnjo krmil rastlinskega izvora.
11/01 Krmila rastl. izvora
VOD35 Uredba o emisiji snovi pri odvajanju odpadnih vod iz objektov in naprav za
predelavo krompirja
7/00 Krompir
VOD39 Uredba o emisiji snovi pri odvajanju odpadnih vod iz objektov in naprav za
proizvodnjo sredstev za lepljenje.
11/01 Lepila
VOD36_2 Pravilnik o prvih meritvah in obratovalnem monitoringu odpadnih vod ter o pogojih
za njegovo izvajanje-obdelava lesa, izdelava lesenih izdelkov in lesovinskih plošč
35/96, 29/00 Les
VOD26 Uredba o emisiji snovi pri odvajanju odpadnih vod iz naprav za litje železa in jekla
ter tempranje
90/00 Litje železa
VOD28 Uredba o emisiji snovi pri odvajanju odpadnih vod iz objektov in naprav za
proizvodnjo, predelavo in konzerviranje mesa ter proizvodnjo mesnih izdelkov
10/99 Meso
VOD29 Uredba o emisiji snovi pri odvajanju odpadnih vod iz objektov in naprav za
predelavo mleka in proizvodnjo mlečnih izdelkov
10/99 Mleko
VOD25_3 Uredba o emisiji snovi pri odvajanju odpadnih vod iz naprav za proizvodnjo
neželeznih kovin - proizvodnja aluminija.
90/00 Než. kov.-aluminij
VOD25_1 Uredba o emisiji snovi pri odvajanju odpadnih vod iz naprav za proizvodnjo
neželeznih kovin - proizvodnja svinca, bakra, cinka ter njihovih zlitin.
90/00 Než. kov.-baker, cink
VOD25_2 Uredba o emisiji snovi pri odvajanju odpadnih vod iz naprav za proizvodnjo
neželeznih kovin - proizvodnja molibdena in volframa.
90/00 Než. kov.-molibden,
volfram
VOD40 Uredba o emisiji snovi pri odvajanju odpadne vode iz naprav za čiščenje odpadnih
plinov sežigalnice odpadkov in pri sosežgu odpadkov.
51/01 Odpadni plini
VOD14 Uredba o emisiji snovi pri odvajanju odpadnih vod iz objektov in naprav za
proizvodnjo papirja, kartona in lepenke-A
10/99 Papir, karton, lepenka-
A
VOD14_B Uredba o emisiji snovi pri odvajanju odpadnih vod iz objektov in naprav za
proizvodnjo papirja, kartona in lepenke-B
10/99 Papir, karton, lepenka-
B
VOD14_C Uredba o emisiji snovi pri odvajanju odpadnih vod iz objektov in naprav za
proizvodnjo papirja, kartona in lepenke-C
10/99 Papir, karton, lepenka-
C
VOD14_D Uredba o emisiji snovi pri odvajanju odpadnih vod iz objektov in naprav za
proizvodnjo papirja, kartona in lepenke-D
10/99 Papir, karton, lepenka-
D
VOD14_E Uredba o emisiji snovi pri odvajanju odpadnih vod iz objektov in naprav za
proizvodnjo papirja, kartona in lepenke-E
10/99 Papir, karton, lepenka-
E
VOD14_F Uredba o emisiji snovi pri odvajanju odpadnih vod iz objektov in naprav za
proizvodnjo papirja, kartona in lepenke-F
10/99 Papir, karton, lepenka-
F
VOD24 Uredba o emisiji snovi pri odvajanju odpadnih vod iz objektov in naprav za
proizvodnjo perboratov
49/00 Perborati
VOD30 Uredba o emisiji snovi pri odvajanju odpadnih vod iz objektov in naprav za
proizvodnjo piva in slada
10/99 Pivo
VOD36_1 Pravilnik o prvih meritvah in obratovalnem monitoringu odpadnih vod ter o pogojih
za njegovo izvajanje-dejavnost pralnic in kemičnih čistilnic
35/96, 29/00 Pralnice
VOD22_2 Uredba o emisiji snovi pri odvajanju odpadnih vod iz objektov in naprav za
pridobivanje premoga in proizvodnjo briketov ter koksa - iz objektov in naprav za
proizvodnjo briketov iz rjavega premoga.
28/00 Premog-briketi
VOD22_3 Uredba o emisiji snovi pri odvajanju odpadnih vod iz objektov in naprav za
pridobivanje premoga in proizvodnjo briketov ter koksa - iz objektov in naprav za
proizvodnjo koksa iz črnega premoga.
28/00 Premog-koks
VOD22_1 Uredba o emisiji snovi pri odvajanju odpadnih vod iz objektov in naprav za
pridobivanje premoga in proizvodnjo briketov ter koksa - iz objektov in naprav za
pranje, sušenje, mletje, čiščenje, razvrščanje, upraševanje in skepljanje črnega
premoga, rjavega
28/00 Premog-pranje
VOD21 Uredba o emisiji snovi pri odvajanju odpadnih vod iz objektov in naprav za
pripravo vode
28/00 Priprava vode
VOD10 Uredba o emisiji snovi pri odvajanju odpadnih vod iz objektov in naprav za
proizvodnjo rastlinskih in živalskih olj in maščob
10/99 Rastl. in žival. olja
VOD8 Uredba o emisiji snovi pri odvajanju odpadnih vod iz objektov reje domačih živali 10/99, 7/00 Reja živali
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
VOD34 Uredba o emisiji snovi pri odvajanju odpadnih vod iz objektov in naprav za
proizvodnjo ribjih izdelkov
7/00 Ribe
VOD31 Uredba o emisiji snovi pri odvajanju odpadnih vod iz objektov in naprav za
predelavo sadja in zelenjave ter proizvodnjo hrane in globoko zamrznjene hrane
7/00 Sadje
VOD1 Uredba o emisiji snovi in toplote pri odvajanju odpadnih voda iz virov
onesnaževanja
35/96 Splošna
VOD7_3 Uredba o emisiji snovi pri odvajanju odpadnih vod iz objektov in naprav za
proizvodnjo stekla in steklenih izdelkov - Kemična obdelava _kislinsko poliranje,
jedkanje, matiranje stekla.
10/99 Steklo-kemična obd.
VOD7_2 Uredba o emisiji snovi pri odvajanju odpadnih vod iz objektov in naprav za
proizvodnjo stekla in steklenih izdelkov - Mehanska obdelava _stiskanje,
odrezovanje, upogibanje, bočenje, prednapenjanje, brušenje, poliranje, vrtanje,
matiranje, itd. vseh vrst s
10/99 Steklo-mehan. obd.
VOD7_4 Uredba o emisiji snovi pri odvajanju odpadnih vod iz objektov in naprav za
proizvodnjo stekla in steklenih izdelkov - Srebrenje in bakrenje ravnega stekla
_izdelava zrcal ter srebrenje drobnih steklenih predmetov.
10/99 Steklo-srebrenje
VOD7_1 Uredba o emisiji snovi pri odvajanju odpadnih vod iz objektov in naprav za
proizvodnjo stekla in steklenih izdelkov - Priprava zmesi, taljenje in oblikovanje
stekla, steklenih vlaken in umetnih mineralnih vlaken ter čiščenje odpadnega zraka
iz naštetih vi
10/99 Steklo-taljenje
VOD7_5 Uredba o emisiji snovi pri odvajanju odpadnih vod iz objektov in naprav za
proizvodnjo stekla in steklenih izdelkov - Predelava steklenih vlaken ali umetnih
mineralnih vlaken v tkanine iz steklenih vlaken ali izolacijske materiale ter čiščenje
odpadnega z
10/99 Steklo-vlakna
VOD3 Uredba o emisiji snovi pri odvajanju odpadnih vod iz objektov in naprav za
proizvodnjo, predelavo in obdelavo tekstilnih vlaken
35/96 Tekstil
VOD4 Uredba o emisiji snovi pri odvajanju odpadnih vod iz objektov in naprav za
proizvodnjo usnja in krzna
35/96 Usnje
VOD9_1 Uredba o emisiji snovi pri odvajanju odpadnih vod iz postaj za preskrbo motornih
vozil z gorivi, objektov za vzdrževanje in popravila motornih vozil ter pralnic za
motorna vozila -postaje za polnjenje tekočih goriv v motorna vozila, v rezervoarje,
v lokom
10/99 Vozila-črpalke
VOD9_3 Uredba o emisiji snovi pri odvajanju odpadnih vod iz postaj za preskrbo motornih
vozil z gorivi, objektov za vzdrževanje in popravila motornih vozil ter pralnic za
motorna vozila -iz objektov za popravljanje motornih vozil, lokomotiv ali vagonov
ter mobil
10/99 Vozila-izločanje
VOD9_2 Uredba o emisiji snovi pri odvajanju odpadnih vod iz postaj za preskrbo motornih
vozil z gorivi, objektov za vzdrževanje in popravila motornih vozil ter pralnic za
motorna vozila - iz objektov in naprav za čiščenje karoserij in dna motornih vozil,
lokomot
10/99 Vozila-pralnice
VOD11 Uredba o emisiji snovi pri odvajanju odpadnih vod iz objektov za opravljanje
zdravstvene in veterinarske dejavnosti
10/99 Zdravst. in veterin. dej.
VOD27_4 Uredba o emisiji snovi pri odvajanju odpadnih vod iz naprav za proizvodnjo železa
in jekla - naprave za vroče oblikovanje cevi.
90/00 Železo-cevi _vroče
VOD27_6 Uredba o emisiji snovi pri odvajanju odpadnih vod iz naprav za proizvodnjo železa
in jekla - naprave za hladno oblikovanje cevi, profilov, paličnega jekla in žice.
90/00 Železo-hladno
oblikovanje
VOD27_1 Uredba o emisiji snovi pri odvajanju odpadnih vod iz naprav za proizvodnjo železa
in jekla - plavži za proizvodnjo surovega železa in naprave za granulacijo žlindre.
90/00 Železo-plavži
VOD27_7 Uredba o emisiji snovi pri odvajanju odpadnih vod iz naprav za proizvodnjo železa
in jekla - naprave za kontinuirano površinsko obdelavo polizdelkov iz jekla.
90/00 Železo-površ. obd.
VOD27_2 Uredba o emisiji snovi pri odvajanju odpadnih vod iz naprav za proizvodnjo železa
in jekla - naprave za proizvodnjo surovega jekla vključno s sekundarno metalurgijo.
90/00 Železo-surovo jeklo
VOD27_5 Uredba o emisiji snovi pri odvajanju odpadnih vod iz naprav za proizvodnjo železa
in jekla - naprave za hladno valjanje trakov.
90/00 Železo-trakovi
_valjanje
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
VOD27_3 Uredba o emisiji snovi pri odvajanju odpadnih vod iz naprav za proizvodnjo železa
in jekla - naprave za kontinuirano litje in vroče oblikovanje.
90/00 Železo-vroče oblik.
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
ANNEX 6
DEMAND STUDY
BAS PROGRAMME
FINAL REPORT (2)
PROJECT
FEASIBILITY STUDY ON DEMAND FOR PRIVATE SECTOR
CREDIT FACILITY AIMED AT WATER POLLUTION
REDUCTION PROJECTS
Miha Švent, M.Sc.
Ljubljana, Slovenia
July 2002
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
I N D E X
EXEcUTIVE SUMMARY........................................................................................................... 39
1. Background.......................................................................................................................... 40
2. Pollution environment ......................................................................................................... 41
2.1 Legislation and related EU Directives implementation status................................. 41
2.2 Taxation system status and development .................................................................. 44
2.2.1 Waste water emission tax................................................................................ 44
2.2.2 Water consumption/emission fees .................................................................. 45
2.2.3 Waste-Water-Treatment-Plant (WWTP) fees .............................................. 45
2.3 Water quality status and industrial pollution monitoring....................................... 46
2.3.1 Water quality status ........................................................................................ 46
2.3.2 Industrial pollution monitoring...................................................................... 46
2.4 Credit facilities and Technical assistance available.................................................. 48
2.4.1 State Aid Regulations ...................................................................................... 48
2.4.2 Environmental Development Fund (‘ECO-Fund’)....................................... 48
2.4.3 Commercial banks ........................................................................................... 50
2.4.4 'Environmental reservations' ......................................................................... 50
2.4.5 EU funds support............................................................................................. 51
2.4.6 The "Clean Production" project.................................................................... 52
2.4.7 Environment Management Systems ISO 14.000........................................... 52
2.4.8 Professional advise and support ..................................................................... 52
3. Investment Demand assessment ......................................................................................... 54
3.1 Public sector (Municipal Waste Water Treatment Plants)...................................... 54
3.2 Industrial sector........................................................................................................... 56
3.2.1 Scope (re)Definition......................................................................................... 56
3.2.2 Demand assessment ......................................................................................... 57
3.3 Investment pipeline........................................................................................................ 1
4. Appendix................................................................................................................................ 2
4.1 Abbreviations used ........................................................................................................ 2
4.2 Individual company profiles / potential pipeline ..........................................................
4.2.1 Lower Sava...........................................................................................................
4.2.2 Middle Sava..........................................................................................................
4.2.3 Mura .....................................................................................................................
4.2.4 Drava.....................................................................................................................
4.2.5 Kolpa.....................................................................................................................
4.2.6 Savinja Sotla.........................................................................................................
4.2.7 Upper Sava ...........................................................................................................
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
EXECUTIVE SUMMARY
This study has produced an estimation that total demand for investments aimed at reduction of
water pollution in the Danube area of Slovenia (covering 81% of the surface) in the
private/industrial sector would be € 384 mio. This demand is covering the timeframe of 2003-
2007. The main driver for these investments in the near future is newly implemented
legislation in line with the EU acquis.
In addition, the public sector Waste Water Treatment Programme would require additional €
593 mio in the timeframe of 2002-2010. At least € 168 of this sum is to be expected as
requirement for additional funding.
Recommendations for the planned Facility:
- The investment support facility, consisting of credits, subsidies and technical
assistance shall be started very soon, because the deadlines imposed by the new
environmental legislation are set in the very near future. Additionally, the companies
that are in a stable financial condition - and therefore attractive for commercial
borrowing - are already investing.
- The Facility shall be - already in preparation phases - well co-ordinated with
governmental institutions and local/international funds to avoid any unnecessary
competition that would only be unfavourable for the end users.
- The industrial demand would strongly depend on borrowing conditions and the size of
grant scheme offered.
- If the credit lines would be implemented through local commercial banks, it has to be
taken into account that a good share of companies that would need assistance are not
in good financial shape and therefore much less attractive for commercial banks
operation.
- The loan and grant scheme will have to be supported by technical (and financial)
advisory support facility, consisting of both local and foreign experts. Apart from the
usually extensive documentation preparation assistance, most companies would
require professional advisory support related to environmental issues.
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
BACKGROUND
The European Bank for Reconstruction and Development (EBRD), in co-operation with the
Global Environment Facility (GEF), is considering launching a new Credit Facility in
Slovenia, with the aim of protecting the Danube River. The proposed Facility will build on
the work of the Slovenian government to meet the highest European environmental standards
and on the basin-wide activities of the International Commission for the Protection of the
Danube River (ICPDR). It will contribute to the implementation of these policies by bringing
in new investment financing, channelled by local commercial banks to the private and
municipal sectors, and softened with GEF grant funding.
Reduction of nutrient load in the Danube basin will be the primary target of the proposed
Facility. The main focus will be on industries where the Credit Facility will finance both inplant
and end-of-pipe measures, with special attention to small- and medium-sized enterprises
and new and innovative technologies. Concerning municipalities, the Facility is likely to find
clients among small and mid-sized municipalities which need to construct or improve their
wastewater treatment facilities or sewer systems. In agriculture, the Facility will help large
livestock farms to reduce their wastewater discharges.
This study shall contribute to the on-going preparation activities for this Facility, providing
the missing information on industrial and public investment requirements in the near future.
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
POLLUTION ENVIRONMENT
1. Legislation and related EU Directives implementation status
In the recent 2-3 years there have been intensive activities on adoption of EU Directives and
harmonisation with EU-acquis in terms of various systematic environment protection laws
and Regulations. Based on the National Environmental Pre-Accession strategy, the
government is now in the final stages of acquis adoption. In 2002 some final updates are
planned in the areas of general nature protection, chemicals and transportation. In the waterrelated
areas all essential legislative requirements have been implemented (in July 2002 the
Law on Waters was enforced) - details in Table 1.
Most of the required environmental authorities and surveillance bodies have now been
established. The most relevant in terms of water pollution regulation is the National
Environmental Agency (NEA) that has been established under the Ministry of Environment
and Spatial Planning (MESP). The Agency is responsible for monitoring and research of
environmental issues, preparing and implementing the environmental regulation and for
international co-operation and international environmental information exchange.
The 35 industry-specific Regulations define the water pollutants emission limits and related
parameters. Polluters exceeding these limits have been called by the MESP/NEA to prepare
recovery plans with specified deadlines in order to achieve compliance.
In general it can be observed, that Slovenia has prepared very well for the EU accession on
the legislative level, but the aspect of industrial compliance with the new legislation
(especially the financial part of it) was not taken into account carefully and systematically
enough. Therefore major problems with the implementation of this legislation are present and
will be encountered in the near future.
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
42
EU Directive/Convention Local legislation (Official Journal nr.)
INTERNATIONAL
Common Water Policy (00/60/EC)
Int. Conventions on Trans-boundary waters (Danube,
Mediterranean Sea)
Law on Waters (12.7.2002)
Ratifications laws (32/96, 1/96, 5/99, 12/98,11/92)
HORIZONTAL
EIA – Environment Impact Assessment (85/337/EEC,
97/11/EC)
- Environment protection law (32/1993, 44/1995, 1/1996, 9/1999, 56/1999, 31/2000, 86/1999, 22/2000)
- Obligation of Environment Impact Assessment (66/1996, 12/2000)
- Methodology for E.I.A. Reporting (70/1996)
- Ratification of cross-border impact Convention (11/1998)
IPPC - Integrated Pollution Prevention and Control
(96/61/EC, 99/391/EC, 00/479/EC)
- Not available (emissions limited in individual regulations for air, water, waste, noise and radiation pollution; individual
industrial regulations)
VOC - Limitation of emissions of Volatile Organic
Compounds due to the use of organic solvents in certain
activities and installations (99/13/EC)
- Not available (emissions partly limited in air-pollution regulations)
SEVESO – Control of major-accident hazards involving
dangerous substances (96/82/EC)
- Communication on natural and other accidents (42/2000)
- Organisation of observation, communication and alerting (45/1997, 5/2000)
- Protection and rescuing planning (48/1993)
- Spatial planning law(18/1984, 15/1989, 71/1993)
- Urban planning (18/84)
- Law on protection against natural and other accidents (64/1994)
Voluntary participation by companies in the industrial
sector in a Community eco-management and audit
scheme ((EEC)1836/93, 99/314/EC, 98/443))
- Not available (ISO 14001 is used)
ECOLABEL: Community eco-label award scheme
(EC/1980/00) and individual product-group regulations:
93/326/EEC, 93/517/EEC, 94/10/EC, (96/703/EEC),
(98/94/EC), (98/483/EC), (98/488/EC), (99/10/EC),
(99/178/EC), (99/179/EC), (99/427/EC), (99/476/EC),
(99/554/EC), (99/568/EC), (99/205/EC), (99/698/EC),
(94/924/E), (94/925/EC), (96/461/EC), (96/304/EC)
- Not available
CHEMICALS: Classification, packaging and labelling of
dangerous substances (67/548EEC, 93/72/EEC),
Evaluation and control of the risks of existing substances
(EC/793/93), Export and import of certain dangerous
chemicals (EC)2455/92)
(27 regulations for individual substances )
WASTE WATER DIRECTIVES
Pollution caused by certain dangerous substances
discharged into the aquatic environment (76/464/EEC)
and related directives on emission of special substances
like Mercury (82/176/EEC, 84/156/EEC), Cadmium
(35 industry specific regulations)
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
(83/513/EEC), Hexachlorocyclohexane (84/491/EEC),
discharges of substances included in list I of the Annex
to Directive 76/464/EEC (86/280/EEC, 88/347/EEC,
90/415/EEC)
Quality of bathing water (76/160/EEC) - Not available (only regulation on bathing water quality in urban recreation centres)
Urban waste-water treatment (91/271/EEC) - Emissions of waste water from urban WWTPs (35/96,90/98) …
Protection of waters against pollution caused by nitrates
from agricultural sources (91/676/EEC)
- Regulation on dangerous substances and plant nutrients in agriculture (68/96)
- Operational monitoring of dangerous substances and plant nutrients in agriculture (55/97)
- Limits and critical levels of dangerous substances in the ground (68/96)
- Instruction for use of good agricultural praxis at fertilising (34/2000)
Other - Water pollution tax (41/95, 44/95, 8/96, 124/00, ..., 14/97, 15/98, 13/01, 125/00)
- Operational waste-water monitoring report format (22/98, 1/01, 35/96, 29/00)
Table 1: Relevant EU Directives and National Legislation
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
44
2. Taxation system status and development
The taxation system related to industrial water consumption, emissions and pollution is divided into
different categories: Water pollution tax, water consumption/emission fees and WWTP fees.
Waste water emission tax
The waste water emission tax is defined in units of Population equivalent (PE), measured at the river
outflow (after the treatment). This tax is being raised at a rate of 30-40% per year; in 2002 it is set to
around € 26 per PE. Additionally, the number of listed parameters defining the PE is also increasing,
meaning that the total payable tax and number of monitoring/tax - binders is also increasing. In
subsequent years it is expected that the PE-tax will have increasing rates in order to catch-up with the
targeted amounts (see Figure 1). In principle, and in the long term, the target tax amount is set so as to
cover the costs of waste water treatment.
Waste water emission tax
0
2000
4000
6000
8000
10000
12000
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Year
SIT
Targeted
Implemented
Figure 1: Waste water emission tax
This tax can be reduced or avoided by investment in pollution reduction, either as process
optimisation and waste minimisation, or by ‘end-of-pipe’ cleaning process. Table 2 gives the
totals on water taxation and reductions (investments) in the industry sector. With the
presumption that the industry would again invest 60% of the total taxed value in 2001, € 14
mio is expected to be invested in the following period. The NEA agency reports that 30
applications for tax reductions have been received so far this year. Recently this tax reduction
was taken into the framework of State-Aid Regulations, meaning that only 15-40% of total
(proved and approved) investment value can be used for such tax reduction (see section 1).
This has drastically limited the ‘own-funding’ possibilities for industry. The State Aid
Regulations do not apply to public sector investments (WWTPs) and this is reflected in the
reported reinvestment ratio of this sector (~100%).
Industry sector Municipal (population) sector
Year Total PE Total tax Reinvested
- tax reduced by
Total PEs Total tax Reinvested
- tax reduced by
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
1997 932.585 € 6,2 mio € 3,5 mio (57%) 1.759.784 € 11,7 mio € 11,7 mio
(100%)
1999 875.384 € 12,5 mio € 7,8 mio (62%) 1.796.874 € 25,6 mio € 25,6 mio
(100%)
2001
11
926.974 € 25,0 mio
Table 2: Waste water emission tax collection and reinvestment
Water consumption/emission fees
Water supply system
Water consumption and emission fees are set and collected by individual municipal water
supply service providers. The prices have continuously risen; recently even by ~40% in some
areas (Koper, Kranj, Celje, Ljubljana), mostly due to the levy of additional state taxes. The
background for the raises was seen as fiscal rather than environmental. As a general
orientation, a total price of ~ € 1,2/m3 would be a good estimate for the municipal water
system supply for industrial users.
Natural sources
Recently enforced Law on Water Resources is regulating the direct usage of natural water
sources (wells, springs, streams). This law raised the water consumption fee by more than
100% to ~ € 0,05/m3.
Waste-Water-Treatment-Plant (WWTP) fees
The WWTPs are in public (municipal) ownership as a rule, but the fees charged to WWTP
users differ very much from case to case and would very much depend on individual
agreements with industrial users. Fees can be based on water consumption and/or emission
volume, pollution intensity or even as a fixed fee.
11 Data for 2001 are estimations as the tax is collected and reported during the following year (2002)
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
3. Water quality status and industrial pollution monitoring
Water quality status
The NEA monitoring reports give the following critical areas for underground and surface
water in the Danube area:
- Underground water (polluted mainly with Pesticides and Nitrates from agriculture):
Celje, Ptuj, Murska Sobota, Lendava
- Surface water (polluted mainly with industrial emissions):
Murska Sobota, Domžale, Ljubljana, Rogaška Slatina, Kočevje, Logatec, Trbovlje.
Celje
Ptuj
M.Sobota
Lendava
Ljubljana
Domžale
Rogaška
Slanita
Kočevje
Logatec
Trbovlje
Hrastnik Sevnica
DANUBE
area
Figure 2: Surface water quality ranking
Industrial pollution monitoring
Industry specific lists of pollutants serve as a basis for regular monitoring. On-site monitoring
may take place several times in a year, depending on waste water volume and pollution
intensity. The monitoring is undertaken by authorised entities (experts), who produce yearly
reports specifying the amount of each individual pollutant, transforming these into a uniform
population equivalent (PE) which serves as the general pollution evaluation equivalent and as
a taxation basis for the next year. The monitoring costs are borne entirely by the SME side
and would depend on the number of pollutants to be tested. The normal fee for one
monitoring exercise would be estimated at € 500-1.000.
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
The MESP is gradually adding new elements to the parameters on the monitoring lists. In
many cases this causes additional and unnecessary cost as a company has to order and pay the
test for non-existing parameters in their process (or apply for dispensation).
The recently published draft national Report on Environment Status summarises the main
pollution elements caused by individual industrial processes (Table 3).
Pollutants Industry
Non-dissoluble substances Pulp & Paper, Printing (55%)
Energetic materials (11%)
Chemical Oxygen Demand (KPK /
COD)
Pulp & Paper, Printing (76%)
Food & Beverages (12%)
Phosphorus Food & Beverages (47%)
Pulp & Paper, Printing (19%)
Nitride Nitrogen (NOx-N) Metals (81%)
Food & Beverages (13%)
Ammonia Nitrogen (NH4-N) Leather processing (35%)
Chemicals (37%)
Heavy Metals (Zn, Ni, Cu, Cr, Hg, Cd,
Pb)
Metals (50%)
Chemicals (24%)
Leather processing (12%)
Table 3: Main water pollutants and Industrial Sources
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
4. Credit facilities and Technical assistance available
State Aid Regulations
In 2000 the State Aid Regulations were accepted with defined limitations for different types
of projects and Public (State and Municipal) Aid. The Regulations are in line with EU
Accession Agreement.
Upper limits of State Aid as percentage of justifiable costs:
- 'For complying with environmental standards' 15% for Large Enterprises
25% for SMEs
- 'For establishing higher environmental standards
than prescribed'
30% for Large Enterprises
40% for SMEs
"Justifiable costs" are defined as: investments, additional premises and related equipment, damage recovery
costs, training and consulting, additional waste management costs, environmental taxes
Enterprise size classification as defined in the S.A.R. (different from definitions in general
Slovene regulations – see 'Scope (re)Definition' section on page 56):
Small enterprise: Less then 50 employees
Net sales income less than € 7 mio
Independent enterprise (… large enterprise ownership less than
25%; this limit may be exceeded if 'no active ownership policy is
conducted')
Medium size enterprise: Less then 250 employees
Net sales income less than € 40 mio
Independent enterprise (… same as above)
Large enterprise: Neither 'Small' or 'Medium'
The state aid limitations apply to single investment/project (the aids do not add-up for
different projects).
The contacted government officials confirm that these Regulations apply to National (State &
Municipal budget) aid sources and not to international sources (the official confirmation of
this is said to be already submitted to the EBRD).
The S.A.R. may apply if the funds are channelled through intermediate governmental
institutions !
Environmental Development Fund (‘ECO-Fund’)
This public and non-profit Fund was established in 1994, providing loans for environmental
investment projects both for local infrastructure (public sector) and for industry. The fund
does not provide professional assistance with technical and investment documentation; Fund
staff perform environmental and banking evaluation of applications, which have to include the
assessment of environmental impact beforehand.
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
In December 2001 the Fund gained a further € 10 mio credit from European Investment Bank.
Fund repayment terms are over 10 years, with a moratorium for 1 year. The Fund shall
operate until Sep 2004. The EIB would co-finance up to 50% of each individual loan, the
ECO-Fund up to 20%.
The Fund has disbursed the following amounts (€ mio):
Year Total Total
industry
Industry/
water
Industry/
waste mgmt
Industry/
other (techn.)
No. of loans
1996 4 1 0 0 0 5
1997 8 0 0 0 0 5
1998 9 2 1 1 1 28
1999 19 10 2 3 5 15
2000 28 18 4 4 9 18
2001 17 7 3 1 3
Total
€ mio
85 38 10 9 19
Table 4
Companies benefited from the fund in the recent period: Gorenje, Vipap, Comet, Color, LPP,
Koto, MLM, KG Rakičan.
The fund has issued 16 public tenders in the period 1996-2001 and undertaken some 450
projects/loans. Details on the currently open public tender:
Total funds available: SIT 4.000 mio (€ 17.7 mio)
Open to both public and private sector
Investment time frame: 1.10.2001 to 31.12.2003
Minimal creditworthiness rank: C
Repayment terms: max 15 years, incl. moratorium of max 2 years
Insurance instruments: various, but very secure
Interest rates:
o TOM12 + 1,5% (1,6% for less secure insurance instruments);
o TOM + 1% in the areas of natural parks, regardless the insurance instruments
The applicant shall provide the complete project documentation including all necessary public
permits and assessment of environmental impact.
The loan shall cover 40-70% of the total investment or max. SIT 1.000 mio (€ 4,4 mio). The exact
percentage is defined on the following criteria (25 points is minimal eligibility criteria):
o Environmental impact (natural parks, sensitive areas, pollution reduction rate): max 40 points
o Environmental criteria (sustainable development, integral approach, international obligations,
national enviro-programme priority): max 30 points
o Relevant technological solution: max 20 points
o project readiness (own funds availability, ready to start): max 10 points
Fixed application costs (general terms):
12 TOM = "Basic interest rate", in principle covering the inflation rate (defined for each month)
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
application fee € 95
contract signature fee 0,2% or min. € 250
funds reservation fee 0,002% of not-used funds /day or min. € 4,5/day
loan accounting fee € 6 /month
event. early repayment fee 1% of returned value of the loan or min. € 45
In general, the attitude of industrial borrowers is positive about the interest rates offered but
negative about extensive documentation preparation costs. At application (or at least before
the approval) complete engineering and construction documentation would have to be ready,
including the professional assessment of environmental impact. In addition, extensive ‘proof
of benefit’ activity is required during and after the project. Some SMEs experienced up to
three times higher application costs for the Fund, compared with commercial loans.
Commercial banks
Lately the local banks offer is getting close to competitive foreign banks money supply. The
borrower can count on TOM + (5-6)% interest rate which can be dropped down to TOM+3%
(1,5% when credit is linked to EUR currency). Class A client can count on very low credit
costs and it can be approved even without any warranties. In any case extensive
documentation preparation is not necessary in this case.
Current (official) offer of Nova Ljubljanska Banka for long-term (1-7 years) loan conditions:
Interest rate: 5,5-10,25%
Application costs: 0,5-1,25% of total value or € 130 – 13.300
Warranty instruments: deposit, third-party warranty, hypothecs, etc.
Each loan condition is in principle agreed individually and would depend on any previous
arrangements with the bank, and on creditworthiness, etc.
'Environmental reservations'
During the privatisation process the companies with environmental problems were obliged to
include the eco-restructuring programme in their privatisation/restructuring plans. For this
purpose they have formed long-term financial reservations in their Balance Sheets for
environmental investments and/or waste removal (1993). The individual deadlines were set
for using those reservations. In 2001 the Ministry of Finance has required the reports on usage
of those funds. If they were not used, the company had to prepare a new programme,
otherwise the dismissal was required. The MESP, in co-operation with the Ministry of
Finance - is still in the process of consolidating and clarifying the situation regarding those
reservations. The situation is not clear as formal status of 109 such companies has been
changed several times in the period since 1993.
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
EU funds support
SAPARD
Beside the direction for agricultural and rural development projects, the SAPARD support
(subsidy) is also available for technology related investments in food (meat- and milk-)
processing industry. € 2,2 mio (of total € 3,6 mio) is currently available for this industry. The
Agency for Agricultural Markets and Rural Development (AAMRD) within the Ministry of
Agriculture, Forestry and Wood (MAFW) is implementing the SAPARD Programme since
January 2002. The Agency reports that 10 applications have been received so far and they
estimate that the funds would be sufficient for some 25-30 projects.
The applicant company can count on a subsidy of up to 35% of total investment value. This
support is seen as very convenient, but problems with extensive documentation preparation
are again encountered. Also the required 12% ROI rate represents quite high margin for the
industrial investors, especially those from the meat- and milk processing industry.
PHARE
Two projects are currently in the preparation phases (Project Fiche published) and are
expected to be tendered in the near future:
1. "ECO-ADRIA, Ecological improvement of the Primorska region", Desiree Number
SI0108.01
2. "Strengthening Slovenia on the Local Level", Desiree Number SI2001.06.01
The Project no.1 is aimed at supporting the sewerage and WWTP system development in
"non-Danube" region, covering river basins out-flowing into the Adriatic sea.
The project no.2 contains a grant scheme component for regional infrastructure development.
A total of € 1.575.000 will be provided as 20% grant for small WWTPs (500 – 2.000 PE) and
water supply systems in underdeveloped and sensitive areas. The implementing authorities
are the Ministry of Economy and National Agency for Regional Development. The smaller
local municipalities with ready-to-go projects are eligible for support.
ISPA
Slovenia: Financing of Water Polluti on Reduction Projects through Local Financial Intermediaries
Area
Drava Kolpa Lower Sava Middle Sava
Industry / Business Comp. PE Empl Comp. PE Empl Comp. PE Empl Comp. PE Empl
Agriculture 3 1.510 301 1 1.911 92
Agriculture / Live stock 1 2.223 341 2 15.059 120
Chemistry 5 3.435 1.528 2 131 429 7 4.018 3.626 16 43.980 5.676
Construction 5 486 1.600 1 70 161
Energetics 2 223 947 1 391 320
Food & Bev. 6 2.373 679 1 174 70 4 36.891 1.621
Food & Bev. / Beverage 2 1.188 384 2 1.702 332 2 3.047 168
Food & Bev. / Diary & milk products 1 32.883 1.150
Food & Bev. / Meat processing 3 5.035 1.676 1 252 110 5 8.147 1.557
Metal & Electro 33 6.251 11.502 3 414 2.503 3 1.249 3.458 19 2.425 4.964
Other manufacturing 12 2.005 4.561 10 1.117 3.224 16 4.803 4.569
Pulp & Paper 2 476.770 1.390 5 10.202 1.206
Service & Retail 5 631 545 2 14 121 1 108 1.146 9 2.928 5.019
Service & Retail / Laundry & tex. cleaning 2 75 50 2 226 183
Service & Retail / Tourism 1 467 330
Textile 7 2.923 1.146 1 2.799 480 2 1.619 379 8 3.487 1.667
Transport 2 1.993 752 1 8 93 2 811 1.464
Wood processing 2 104 229 2 112 153
Wood processing / Furniture 1 88 364 1 221 572 3 475 984 4 369 1.533
Wood processing / Windows & doors 1 159 520 1 16 645
Grand Total 86 28.810 25.357 14 5.256 5.019 35 488.174 15.996 101 167.758 32.268
Table 10: Selected population of industrial water polluters - part 1 (continued in the next table)
Slovenia: Financing of Water Polluti on Reduction Projects through Local Financial Intermediaries
Area
Mura Savinja-Sotla Upper Sava
Total
Comp. Total PEs Total Empl
Industry / Business Comp. PEs Empl Comp. PEs Empl Comp. PEs Empl
Agriculture 1 86 25 5 3.507 418
Agriculture / Live stock 2 48.749 324 5 66.031 785
Chemistry 2 8.541 892 3 2.594 1.791 3 159 75 38 62.858 14.017
Construction 2 335 470 8 891 2.231
Energetics 1 439 603 4 1.053 1.870
Food & Bev. 2 5.665 268 3 2.143 525 16 47.246 3.163
Food & Bev. / Beverage 4 5.070 799 1 20.184 455 11 31.191 2.138
Food & Bev. / Diary & milk products 2 4.222 304 1 2.680 172 4 39.785 1.626
Food & Bev. / Meat processing 2 3.836 447 3 5.312 487 1 210 38 15 22.792 4.315
Metal & Electro 4 131 610 9 3.894 7.780 18 15.064 9.532 89 29.428 40.349
Other manufacturing 2 141 151 9 1.731 5.400 10 1.544 4.053 59 11.341 21.958
Pulp & Paper 3 59.763 1.602 1 211 470 1 202 100 12 547.148 4.768
Service & Retail 2 21 66 2 386 139 5 170 355 26 4.258 7.391
Service & Retail / Laundry & tex. cleaning 1 606 82 2 26 64 7 933 379
Service & Retail / Tourism 3 919 806 1 141 227 5 1.527 1.363
Textile 1 1.016 60 3 4.752 1.692 9 3.316 3.011 31 19.912 8.435
Transport 1 47 96 2 775 484 8 3.634 2.889
Wood processing 1 72 143 1 1 26 6 289 551
Wood processing / Furniture 1 175 730 1 344 868 11 1.672 5.051
Wood processing / Windows & doors 1 110 620 3 285 1.785
TOTAL 28 132.456 6.157 39 48.842 20.439 60 24.485 20.246 363 895.781 125.482
Table 11: Selected population of industrial water polluters - part 1 (continued from the previous table)
Slovenia: Financing of Water Polluti on Reduction Projects through Local Financial Intermediaries
Area/Basin PE
Empl
. Company Industry / Business Type
EUR
mio
Statu
s
Drava 200 89 Ecolab d.o.o. Chemistry Process 0,3
read
y
Drava 177 400 TDR - METALURGIJA d.d. Chemistry Process 0,45 idea
Kolpa 92 195 MELAMIN KEMIČNA TOVARNA d.d. KOČEVJE Chemistry End-of-Pipe 0,5
read
y
Lower Sava 20 160 AKRIPOL d.d. Chemistry Process 0,1 Idea
Lower Sava 400 113 TANIN d.d. Chemistry End-of-Pipe 0,9 draft
Lower Sava 174 70 Greda d.o.o. Food & Bev. End-of-Pipe 0,06 draft
Lower Sava 632 153 DANA d.d. Food & Bev. / Beverage End-of-Pipe 0,1 idea
Lower Sava 1.070 179 VINO BREŽICE d.d. Food & Bev. / Beverage Process 1
read
y
Lower Sava 252 110 KMEČKA ZADRUGA SEVNICA z.o.o. Food & Bev. / Meat processing End-of-Pipe 0,4 draft
Lower Sava 380 1000 STEKLARNA HRASTNIK d.d. Other manufacturing Process 0,25 draft
Lower Sava 467 330 TERME ČATEŽ d.d. Service & Retail / Tourism End-of-Pipe 0,5 draft
Lower Sava 827 106 INPLET PLETIVA d.d. Textile Combined 4 draft
Lower Sava 792 273 NOVOTEKS TKANINA d.d. Textile End-of-Pipe 0,35 idea
Lower Sava 72 194 STILLES d.d. Wood processing / Furniture Process 0,3
read
y
Middle Sava 14.723 84 EMONA FARMA IHAN D.D. Agriculture / Live stock End-of-Pipe 1 draft
Middle Sava 1.132 116 BELINKA PERKEMIJA d.o.o. Chemistry Combined 0,5
read
y
Middle Sava 104 400 COLOR d.d. Chemistry End-of-Pipe 2 draft
Middle Sava 120 420 HELIOS d.d. Chemistry End-of-Pipe 0,3
read
y
Middle Sava 39.352 1100 IUV - INDUSTRIJA USNJA VRHNIKA d.d. Chemistry End-of-Pipe 3
read
y
Middle Sava 147 246 ETA d.d. KAMNIK Food & Bev. End-of-Pipe ? draft
Middle Sava 32.883 1150 LJUBLJANSKE MLEKARNE d.d. Food & Bev. / Diary & milk products Process 5 draft
Middle Sava 1.529 750 Mesnine dežele kranjske d.d. Food & Bev. / Meat processing Combined 0,8
read
y
Middle Sava 262 160 TERMIT d.d. Other manufacturing End-of-Pipe 0,5 draft
Middle Sava 2.317 177 GORIČANE Tovarna Papirja Medvode d.d. Pulp & Paper Combined 3 draft
Middle Sava 6.021 347 PAPIRNICA VEVČE d.d. Pulp & Paper End-of-Pipe 5 idea
Middle Sava 102 150 PERITEKS d.o.o. Service & Retail / Laundry & tex. cleaning Process 0,2 idea
Middle Sava 220 504 SVILANIT TEKSTILNA TOVARNA d.d. Textile Process 1,8
read
y
Mura 4.118 448 RADENSKA d.d. Food & Bev. / Beverage Combined 3,5 draft
Mura 58.000 1305 PALOMA d.d. Pulp & Paper Process 2 draft
Mura 527 360 RADENSKA ZDRAVILIŠČE RADENCI D.O.O. Service & Retail / Tourism Process 2,2 draft
Savinja- 4.600 200 ETOL d.d. Food & Bev. End-of-Pipe 0,5 draft
Slovenia: Financing of Water Polluti on Reduction Projects through Local Financial Intermediaries
Sotla
Savinja-
Sotla 1.065 68 VITAL MESTINJE d.d. Food & Bev. End-of-Pipe 1 draft
Savinja-
Sotla 2.730 109 GRUDA JURMES d.d. Food & Bev. / Meat processing End-of-Pipe 0,5 draft
Savinja-
Sotla 606 82 BELIN - IPP d.o.o. Service & Retail / Laundry & tex. cleaning Process 0,3 idea
Upper Sava 12.496 1417 ACRONI d.o.o. Metal & Electro Process 5
read
y
Upper Sava 542 330 ISKRA ISD d.d. Metal & Electro End-of-Pipe 0,5 draft
TOTALS
189.15
1
13.29
5 36 47,8
Table 12: Sample population of potential clients for the Facility
Slovenia: Financing of Water Polluti on Reduction Projects through Local Financial Intermediaries
Lower Sava Extrapolation - Local Extrapolation - National
TOTAL SAMPLE Sample size Sample size
Comp. PE Empl. Comp. PE Empl. € mio Comp. PE Empl. € mio Comp. PE Empl. € mio
Agriculture
Agriculture / Live stock
Chemistry 7 4.018 3.626 2 420 273 1,00 29% 10% 8% 8,8 5% 1% 2% 73,3
Construction
Energetics 2 223 947
Food & Bev. 1 174 70 1 174 70 0,06 100% 100% 100% 0,1 6% 0% 2% 6,7
Food & Bev. / Beverage 2 1.702 332 2 1.702 332 1,10 100% 100% 100% 1,1 18% 5% 16% 11,1
Food & Bev. / Diary & milk products
Food & Bev. / Meat processing 1 252 110 1 252 110 0,40 100% 100% 100% 0,4 7% 1% 3% 19,3
Metal & Electro 3 1.249 3.458
Pulp & Paper 2 476.770 1.390
Service & Retail 1 108 1.146
Service & Retail / Laundry & tex. cleaning
Service & Retail / Tourism 1 467 330 1 467 330 0,50 100% 100% 100% 0,5 20% 31% 24% 2,1
Textile 2 1.619 379 2 1.619 379 4,35 100% 100% 100% 4,4 6% 8% 4% 72,6
Transport
Wood processing
Wood processing / Furniture 3 475 984 1 72 194 0,30 33% 15% 20% 1,5 9% 4% 4% 6,0
Wood processing / Windows & doors
Other manufacturing 10 1.117 3.224 1 380 1.000 0,25 10% 34% 31% 1,3 2% 3% 5% 9,2
TOTAL 35 488.174 15.996 11 5.086 2.688 8 0 0 0 18,0 200,3
Table 13: Sampling and extrapolation based on the Lower Sava area
Slovenia: Financing of Water Polluti on Reduction Projects through Local Financial Intermediaries
Middle Sava Extrapolation - Local Extrapolation - National
TOTAL SAMPLE Sample size Sample size
Comp. PE Empl. Comp. PE Empl. € mio Comp. PE Empl. € mio Comp. PE Empl. € mio
Agriculture 1 1.911 92
Agriculture / Live stock 2 15.059 120 1 14.723 84 1,00 50% 98% 70% 1,5 20% 22% 11% 6,3
Chemistry 16 43.980 5.676 4 40.708 2.036 5,80 25% 93% 36% 15,2 11% 65% 15% 34,7
Construction 1 70 161
Energetics 1 391 320
Food & Bev. 4 36.891 1.621 1 147 246 0,00 25% 0% 15% 0,0 6% 0% 8% 0,0
Food & Bev. / Beverage 2 3.047 168
Food & Bev. / Diary & milk products 1 32.883 1.150 1 32.883 1.150 5,00 100% 100% 100% 5,0 25% 83% 71% 11,0
Food & Bev. / Meat processing 5 8.147 1.557 1 1.529 750 0,80 20% 19% 48% 3,3 7% 7% 17% 9,5
Metal & Electro 19 2.425 4.964
Pulp & Paper 5 10.202 1.206 2 8.338 524 8,00 40% 82% 43% 16,1 17% 2% 11% 215,3
Service & Retail 9 2.928 5.019
Service & Retail / Laundry & tex. cleaning 2 226 183 1 102 150 0,20 50% 45% 82% 0,4 14% 11% 40% 1,2
Service & Retail / Tourism
Textile 8 3.487 1.667 1 220 504 1,80 13% 6% 30% 16,3 3% 1% 6% 82,9
Transport 2 811 1.464
Wood processing 2 112 153
Wood processing / Furniture 4 369 1.533
Wood processing / Windows & doors 1 16 645
Other manufacturing 16 4.803 4.569 1 262 160 0,50 6% 5% 4% 10,5 2% 2% 1% 39,9
TOTAL 101 167.758 32.268 13 98.912 5.604 23 0 1 0 68,2 400,9
Table 14: Sampling and extrapolation based on the Middle Sava area
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
1
3. Investment pipeline
As mentioned above, the sample of 35 companies was investigated in terms of basic business
profile and short description of the environmental problem they are currently facing. Not all,
but most of them would represent a reasonable pipeline for start-up projects within the
Facility as the projects are currently in various stages (ranging from 'idea' to 'ready-to-go').
Their borrowing ability is also different from case to case.
It is important to note that almost all of them would welcome a qualified advisory service
related to in-process or end-of-pipe 'clean-up'.
In three cases (Inplet-Pletiva, Gruda Jurmes and Vital Mestinje) the indicative relation and
inter-dependence is shown between Public and Private/Industrial sector. Those companies are
ready to co-invest in the local public WWTP, provided that the plant would have appropriate
capacities and it would be built soon enough. On the other hand, some companies that are
already connected to such plant, are now considering their own end-of-pipe treatment simply
because of financial (over)load from the public waste water treatment (Periteks in Domžale).
The sample is summarised in the Table 12. Detailed company information has not been
included in this Annex for confidentiality reasons.
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
APPENDIX
1. Abbreviations used
EU European Union
NEA National Environmental Agency (Agencija Republike Slovenije za Okolje)
MESP Ministry of Environment and Spatial Planning (Ministrstvo za okolje in
prostor)
WWTP Waste Water Treatment Plant
PE Population Equivalent (Enota Obremenitve)
EIB European Investment Bank
IPPC Integrated Pollution Prevention and Control
BAT Best Available Techniques
BREF Best Available Techniques Reference Documents
CCIS Chamber of Commerce and Industry of Slovenia
MoE Ministry of the Economy (Ministrstvo za Gospodarstvo)
MAFW Ministry of of Agriculture, Forestry and Wood
AAMRD Agency for Agricultural Markets and Rural Development
KPK COD, Chemical Oxygen Demand
BPK BOD, Biological Oxygen Demand
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
ANNEX 7
STAP REVIEW
Draft Project Brief
EBRC/GEF National Pollution Reduction Project in Slovenia
Reviewed by:
Edwin Ongley, PhD.
Member: STAP Roster of Experts (International Waters)
July 30, 2002
2. INTRODUCTION
This review is made on the basis of the Project Brief, Main Report and annexes provided as
electronic documents to this Reviewer by EBRD/FAO under the GEF Operational Program
Number 8: Waterbody-Based Operational Program. Documentation provided included:
- Main Report -- 28 pages
- Project Brief -- 2 pages
- Annex 1: Logical Framework -- 3 pages
- Annex 2: Detailed Project Description -- 16 pages
- Annex 3: Incremental Cost Analysis -- 7 pages
- Annex 4: Public Involvement -- 10 pages
- Annex 5: Environmental Eligibility Criteria -- 21 pages
- Final Report (2) of “Feasibility Study on Demand for Private Sector Credit Facility
Aimed at Water Pollution Reduction Projects” (July 2002) -- 28 pages (this is
presumably Annex 6, but is not labeled as such)
Note: the “DPRP Transboundary Analysis” was not provided and is probably not relevant
to this proposal.
The review was conducted using the published review criteria of STAP (included as the TOR
for this Review and verified against criteria on the STAP website), and the text of Operational
Program #8.
This review is also consistent with other recent reviews carried out by this Reviewer,
including:
Black Sea Ecosystem
San Juan River Basin
Guarani Aquifer
Note: Specific comments in this review that the proponent may wish to consider are
highlighted in bold text.
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
OVERVIEW
This project focuses on the creation of a Credit Facility ( CF) for Slovenia having the
objective of targeted investments to accelerate the reduction of nutrients and toxic substances
in the Danube River Basin (DRB). This project is part of a group of GEF and other related
projects in the Danube-Black Sea basin designed to bring integrated and more effective and
efficient environmental management to this area and to reduce environmental stresses to this
important freshwater and marine ecosystem. The Incremental Cost Analysis (Annex 3)
provides a comprehensive view of related international funding mechanisms for
environmental management and pollution control in the DRB. While this project focuses on
Slovenia, it aims to develop an innovative and replicable investment model for funding of
specific types of pollution abatement activities at the national level, that can be used in other
Danube countries. A large percentage of the land area of Slovenia falls within the Danube
River catchment. A number of tributaries rise in Slovenia and several others pass through the
country. All represent transboundary situations with upstream and downstream riparian
consequences.
KEY REVIEW ISSUES
1. Scientific and Technical Soundness of the Project
This proposal focuses on a mechanism for targeted investments in transboundary pollution
reduction. The main thrust of the proposal is on fiscal and institutional mechanisms and not
on scientific or technical issues. Therefore, scientific and technical assessment here focuses
on those limited areas (below) that have a scientific component.
More generally, this proposal builds upon other related technical work of the Slovenian
Government and various actions taken for the DRB under the Danube River Protection
Convention and which have led to this particular proposal. These actions include a
transboundary diagnostic analysis, the Strategic Action Plan (SAP) and Joint Action
Programme (JAP); these are outside the purview of this assessment. Technical aspects of
those plans and programmes include the following, but which are not considered within this
proposal but can be assumed to be a valid basis for planning for this proposal.
- aquatic assessment in the DRB, including Slovenia
- evaluation of specific hotspots as target areas
- national monitoring criteria
Limited technical requirements exist in this proposal, including:
- monitoring of load reductions for loans under the proposed facility (Annex 5 – exact
mechanism not specified, but is well known and not required in the proposal)
- monitoring of environmental impacts (Annex 5 – see below)
Within the technical/scientific component, I find only the three following areas that need
clarification:
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
a. There is some confusion in the text and annexes over the inclusion of livestock operations
(a non-point source activity -- Project Brief, para 11 of the main report) , and the stated
exclusion of non-point source activities and focus on industrial enterprises and wastewater
treatment (para. 55 and italicized text in para. 56). This needs to be clarified. Further,
para.11 refers to nutrient and pesticide runoff as the main issue with agriculture. For pig
farming in particular, high levels of pathogens having very significant impacts on human
health are a major environmental threat, but are not mentioned. Para. 69 should include
the non-point source focus of the project.
b. Annex 5: This Annex is at the core of this proposal insofar as it describes how the
proposed loan facility will determine if a loan request meets GEF eligibility requirements.
While the criteria presented are directly linked to the objective of pollution reduction,
none are specific to the determination of transboundary effects. Indeed, in science, this is
very difficult to determine with any degree of precision for most polluters (there are
exceptions) and especially for small to medium polluters. EBRD/FAO need, perhaps, to
give more thought to this aspect so that GEF-supported loans are linked to
incremental cost criteria, even if only in a notional sense in that exact technical
evaluation of incremental costs is difficult. Two examples are provided below, however
the proposal should not be fully prescriptive at this time, only cognizant of the need for
development of appropriate technical criteria.
One example is the possibility of defining effluent reduction (for nutrients) criteria in
terms of some percentage contribution to total transboundary loading which, presumably,
has been calculated. This might be biased towards downstream polluters in that the
assimilation of nutrients means that the further upstream the polluter, the less
transboundary impact it will have. Nevertheless, for a small area such as Slovenia, some
standard calculation would be acceptable and is administratively efficient.
A second example is for toxics for which there is zero assimilation (only dilution through
bio-uptake, sedimentation and volatilization). Therefore any reduction of toxics is, de
facto, a transboundary benefit with immediate (though not quantifiable) benefits to aquatic
life and human health.
c. Annex 5: “Monitoring of Environmental Impacts” -- the text is largely oriented to
monitoring of emissions reductions and not of environmental impact. This can be easily
fixed by a change in wording to include the requirement for the proponent to include
appropriate aquatic indicators of stress reduction (e.g. reduction in ambient levels of
BOD; increase in dissolved oxygen; decrease in chlorophyll-a -- all of these are
appropriate for nutrient reduction; for toxics, it is necessary to include some assessment
of toxicity in ambient water, or by toxicity reduction assessments in the monitored
effluent). All of these are technically feasible in Slovenia.
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
2. Use of Technology
The use of “technology” in this proposal mainly refers to the objective of using the Credit
Facility to encourage investment in alternative manufacturing and processing technologies
where these can be shown to be more cost effective than focusing only on treatment of
effluents. The proposal outlines the rationale for this, and the criteria that will be adopted by
the Credit Facility. The proposal cannot be more specific than this as any such technologies
will be very specific to the specific polluting activity. There are, however, no specific
guidelines as to how this assessment will be made or the criteria that would be used to
make a judgement on loans for technological alternatives.
3. Institutional Arrangements
The proposal contains very specific arrangements involving FIs, other programs and
institutions such as BAS and TAM, and other relevant international and national institutions
and programs. Cofinancing options appear well thought-out and rationalized relative to other
investment programs in the region.
4. Other Questions
a. Annex 2
The business model put forward makes considerable sense. The investment criteria and
decision steps are logical and well thought out. Additionally, it would be nice to know:
- what impact the EBRD failure for a similar facility in Slovakia had on the
development of this business model. This should be referenced also in para 58+ in
the main report. Para 66 does not indicate why this effort failed but suggests that it
was a positive experience.
- As discussions with FIs have not yet taken place (para. 11 – also note improper use
of last word of this para.) some indication of likely acceptance of these
arrangements would be useful (perhaps based on previous experience of EBRD).
- (also para 34 of Main Report) Given the range of issues and technologies that will be
assessed by the Environmental Expert, it is not recommended that this be a single
person or firm. Technical analysis of process streams and alternative waste
treatment options (not to mention agricultural components) is complex and will
require different types of expertise. It is not, however, likely to be cost effective to
engage a firm (as most companies do not maintain the range of expertise that may be
needed). One model that meets the administrative needs of the Credit Facility could
be as follows: if it is assumed that the majority of the applications will involve waste
treatment, then one expert can be engaged to process these and to act as a conduit for
assessment by others of those aspects that are beyond the individual’s expertise. The
range of activities of the Credit Facility is likely to require periodic involvement by
up to five different types of experts. This requires that funds be kept aside to pay for
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
those assessments that cannot be handled by the staff expert. The required external
expertise should be retained on a longer term basis so that there is consistency in the
overall evaluation process. Further, the group of experts (one staff environmental
expert and retained experts) should meet initially to establish evaluation
methodologies and criteria, and periodically to assess environmental benefits in order
to recommend to the Facility a balance in the investment decisions.
b. Annex 3:
- It is understood that the total amount of $54 million is based upon the demand study.
However, it is not clear how the amount of the GEF contribution was arrived at ($9
million). Was it the result of a calculation of costs of pollution reduction to achieving
specific global benefits? – or a “reasonable” value given the amount of the proposed
EBRD loan to FIs – or inferred from the Demand Study – or ??? This should be
clarified both in Annex 3 and in para. 28 of the Main Report.
- In regards to the handling of the GEF component, there seems to be a contradiction
between para. 10 of Annex 3 and Annex 2. Para 10 states that the GEF funds will be
blended into the EBRD loan and on-loaned to FIs . Annex 2 (Step 7 [pg.5] indicates
that the GEF grant portion will be disbursed directly by EBRD (also para. 45 of main
report)
c. There is little discussion of the management of the CF, staff composition, local
arrangements, or costs for the operations of the Credit Facility except costs for the
Environmental Expert. If this is a “virtual” facility which will be fully operated by
EBRD, then this should be stated with overhead costs, if any.
d. There appears to be no issue that would involve conflict, either between institutions or
between programs.
5. Identification of Global Benefits
The difficulty of costing incremental environmental benefits is well known. However, in this
case, existing international and national environmental and infrastructure programmes in the
DRB are known to have, and are predicated upon, transboundary (global) benefits. The
Incremental Cost Analysis (Annex 3) therefore makes the reasonable assumption that a
programme of accelerating pollution control in Slovenia (this proposal) is, de facto, additive
to these other programmes and, as a consequence, specifically addresses global benefits. The
nature of the global environmental benefits are summarized briefly in the proposal however it
is unnecessary to enter into specific dialogue on this matter due to the other GEF projects that
are ongoing in the DRB-Black Sea region and for which the global benefits have already been
assessed and approved by the GEF Council.
6. Context of GEF Goals
This proposal is a country-specific project but having global environmental benefits. In the
Waterbody-Based Operational Program 8, “the GEF will play a catalytic role in assisting a
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
group of countries seeking to leverage cofinancing ….”. However, paragraph 8.10 of this
Operational Program provides for
“… a logical progression of GEF-funded activities – from project development to analyses
of transboundary priority environmental concerns to formulation of an international water
Strategic Action Program to eventual regional capacity building or country-specific
investment projects.”
This proposal represents the outcome of a set of sequential activities sponsored by the GEF
and others, that now lead to country-specific assistance. Further, the objective is to create an
investment model that can be replicated in other DRB countries. Therefore, I conclude that
this proposal meets the GEF goals and, further, indicates that the overall progression of GEF
activities can, and do, lead to practical and cost-effective solutions. In this context, para 13
of the Main Report could be strengthened in order to avoid any confusion (refer to para.
51 (v) which provides a good justification).
7. Regional Context
The regional context (DRB and Black Sea) is high on the GEF’s regional priorities
representing both a large freshwater system and a large marine ecosystem.
8. Replicability of the Project
The stated goal is to develop a model for cost-effective co-financing of pollution reduction
that can be used in other DRB countries. It is noted (but not in the main text) that an earlier
EBRD attempt to establish an environmental loan facility in Slovakia was not successful.
Lessons learned from this should be noted in the main document.
9. Sustainability
Sustainability is addressed both in the short term (e.g. use of established and reliable banking
institutions) and in the long term (longer term environmental benefits and catalytic effects of
the project). Sustainability of the CF is not the issue insofar as it has a finite lifespan.
Sustainability is appropriate addressed as the longer term -- sustainable benefits that the
project will achieve.
Comments in section #8 (above) in regards to the failed attempt in Slovakia are relevant
to the risks associated with this project.
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
SECONDARY ISSUES
1. Linkages to Other Focal Areas
The proposal is specifically targeted to pollution reduction in international waters as a follow
up activity to other earlier GEF and related activities and does not, therefore, relate
specifically to other GEF focal areas. To do so would be largely irrelevant and does not
detract from the benefits of the proposed activity. The proposal closely relates to other
program areas of the International Waters focal area (e.g. toxics)
2. Linkages to Other Programmes, Actions etc.
The proposal is a direct consequence of a variety of other programmes, actions, etc. taken at
national and basin levels under various authorities. These are integrated via the Danube
Convention and its various instruments and institutions. The proposal is sufficiently
comprehensive in tracking the origins of the proposed loan facility so that there is a high level
of comfort with the linkages. The integration of the loan facility with a larger loan from the
EBRD is addressed. The possible consequences of the loan being considered by the
Government as “State Aid” has been addressed, although clarification on this matter will be
pursued with the Slovenian Ministry of Finance.
3. Benefits or Damaging Environmental Effects
The proposal is designed to produce beneficial effects. There are no direct or indirect
damaging environmental effects associated with the proposal.
4. Degree of Stakeholder Involvement in the Project
Annex 4 is entirely devoted to stakeholder involvement. The proposal follows the precepts of
the Aarhus Convention and the UNECE Convention of Access to Information. The plan is
comprehensive and targeted to the public and to relevant institutions at local and regional
levels. This Annex is well thought out and appropriately comprehensive both in terms of
audience and in terms of materials and mechanisms for information dissemination.
5. Capacity Building
The proposal (Annex 2) outlines the need for providing technical assistance to local firms that
request assistance to assess new technologies, or in developing loan applications and/or
investment proposals. Mechanisms are identified.
The proposal also recognizes the need to provide assistance to FIs and the private sector in
implementing these new financial modalities. Mechanisms are identified.
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
Specific technical assistance should be developed for the agricultural sector if the TAM
program does not provide this. Especially in the stated area of pig/livestock farming and
effluent management, it will be valuable for the CF to provide technical guidelines on
alternative ways of managing livestock effluent so that there is some consistency in the
approach by agricultural enterprises to loan applications. For example, Dutch experience
shows that land spreading of manure (an alternative to disposal to surface waters) can lead to
serious groundwater problems and to human health impacts by contamination of water wells
(Canadian example of human deaths) therefore alternatives must be demonstrated not to
simply transfer the problem to some other environmental compartment.
6. Innovation
The innovative aspect of this proposal will be in the successful demonstration of the Credit
Facility, the strong association with Slovenian institutions and technical organizations, and
the ability to demonstrate sustainability.
Summary
This proposal is well thought out and well articulated. It addresses very specific GEF
priorities and represents the continuum of GEF involvement in the Danube/Black Sea basin to
the point of remediation investments using innovative credit facilities. There are a few areas
noted above that the proponent should consider, however these are mainly matters of clarify
and not substance.
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
ANNEX 8
RESPONSE TO THE STAP REVIEW
Introduction. The Demand Study is indeed included as Annex 6 of the package. We will
make that clearer in the final documentation submitted to GEF.
Issues 1a. Inclusion of non-point sources of pollution. So long as there is a defined borrower,
with a bankable project, which is eligible under the eligibility criteria, then it can be included
in this facility. That could include a pig farm or any other livestock operation.
Issue 1b. Annex 5. Determination of Trans-boundary Effects. If we understand the issue
correctly, you suggest the need to demonstrate more closely the linkage between GEFsubsidized
loans supported under the project and the incremental costs associated with
achieving trans-boundary reductions in nutrient loading.
It is unreasonable to think that sufficient data will emerge from the project to make a coherent
statement about trans-boundary impacts. However, data can be provided about point source
emissions which have been effected by the programme, and these should be used as an
indicator which will hopefully support a downward trend. Companies would be required to
submit to the Environmental Expert relevant pre-project documentation quantifying effluent
levels (obtained as part of the application process and/or through recent voluntary effluent
reporting to the MOEPP). This information, together with the specifications associated with
the technical package to be purchase through the loan, would provide the basis to estimate
what reductions in nutrient loading could be achieved. Aggregating this data with similar
calculations associated with other borrowers participating in the project, would provide an
initial basis for estimating total project-related reductions in trans-boundary nutrient loads.
Issue 1c. Annex 5. Monitoring of Environmental Impacts. The issue as we understand it is,
the project puts more emphasis on achieving emissions reductions as opposed to
environmental impact. The suggested solution is to require the project proponent to include
appropriate aquatic indicators to assess reductions in loading (for nutrients) and ambient
water or reduction assessments for toxic effluents.
This is an issue that we had grappled with at some length and we did not want to get into a
substantial (and costly) ambient water quality monitoring program. Slovenia and the EU
already have effective monitoring programs in place to assess the quality of waters in the
River Danube (see, for example, the European Topic Centre on Water part of the European
Environment Agency). Our view is that within the scope of this facility we can realistically
only focus on emission reduction monitoring.
We have made provision for the Environmental Expert (supported by additional technical
expertise, if required – see below) to make two visits per borrower during the course of the
loan period. The first would be to ascertain if the loan was used for the intended purpose, if
the technical package was installed correctly, and functioning. The second visit would be an
unannounced visit made during the course of the life of loan to ensure that the technology
continues to function and achieve the stated reductions. Beyond this, what we propose is the
project proponent provide voluntary reports to the Environmental Expert on a regular basis
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
presenting data on reductions of previously-agreed pollutants (these can be the same as those
provided the MOEPP if relevant). Cost of laboratory analyses would be included as part of the
two monitoring visits made by the Expert. Finally, we would assume that each piece
pollution reduction equipment installed comes with associated effluent reduction
specifications which the purchaser could expect to achieve when fully operational. This
would provide another input into assessing the reduction in emission associated with the
investment and therefore a reduced environmental impact. We would be very happy, at the
end of this programme, to provide our aggregated emission reduction data to the Slovenian
authorities and other relevant institutions so that they can use this to assess the impact on
ambient water quality.
Note: The language of Annex 5, Section 15 (ii) has been amended in line with the
comments of the STAP reviewer.
Issue 2. Use of Technology. Your comment is that there are no guidelines on how to assess
whether or not alternative processing / manufacturing technologies are more cost effective
than simple effluent treatment technologies nor criteria for judging the effectiveness of
technological alternatives.
As a starting point it should be noted that the Credit Facility has not been designed with the
specific aim of promoting particular technologies. Also, the Bank has no intention of
encouraging companies to invest in expensive effluent reduction technology simply because a
subsidised grant is available to do so. This why the facility includes two key aspects – first,
the involvement of TAM/BAS who will be providing advice and guidance on improving
process efficiency (the cleaner production approach), and second a requirement that any
proposed investment should be, in the long term, the least-cost option for achieving intended
emission reductions or, alternatively, it should generate additional environmental or other
benefits, which justify higher costs.
To help address your concerns, the Environmental Expert will include within their review of
the project an assessment of whether or not the proposed technology is the best and most costeffective
solution to the problem at hand. Such an assessment may require input from other
technical experts. Clearly there is a difficulty in EBRD defining criteria for technological
alternatives for what could turn out to be a whole range of sectors financed through this
facility.
Issue 4. Other Questions. – Annex 2
Failure of the Slovak Energy Efficiency Credit Line. You asked what impact did the failure of
this facility have on the design of the proposed project and asked for more information on the
lessons learned.
The Slovak Energy efficiency Credit Line was raised by a participant in the Stakeholder
Workshop on the held in Ljubljana on 17 June 2002. In actual fact EBRD would not consider
this project a failure. A number of energy efficiency loans had been extended and were being
repaid as required when a problem arose with the FI administering the credit line. The
President of the FI extended a number of sizeable guarantees to Russian banks without
authorisation and, following the Russian crisis (August 1998) those guarantees were called.
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
The FI, basically, went bust. It was taken over by a strategic investor but the EBRD decided
to suspend the credit line and any funds owed were repaid. The financing model itself did not
have any problems up to that point. The project involved a DM equivalent of ECU 15 million
for a general purpose credit facility with up to the equivalent of ECU 7.6 million being
available for co-financing energy efficiency investments, with interest-free Phare funds
available for ECU 3.8 million. Proceeds of the facility were used to finance: (i) commercial
interest rate sub-loans for the general financing needs of its private sector clients; and (ii)
below commercial interest rate sub-loans for energy efficiency projects. There were, at the
time, some questions raised with regard to effective selection and monitoring of sub-loans
from an energy efficiency perspective. This issues has been addressed within our project
through the retaining of the independent Environmental Expert to both select and monitor
projects.
Arrangements with the FIs. You asked what was the likelihood of local FIs accepting the
proposed financing model.
The willingness of FIs to participate in this project is difficult to assess at this stage and will
hinge on how attractive the incentives are. As stated in the Annex, the FIs are naturally
conservative and will need to understand what the benefits are prior to taking on a new
product, marketing this to clients and then taking on the additional burdens of administration,
monitoring and reporting. This is one of the key reasons we proposed the incentive structure
we did. In October 2001, staff from EBRD undertook a mission to Slovenia and met with two
potential participating FIs. In both cases the response was basically yes, sounds like a good
idea, but come back to us with a more concrete proposal. It is difficult to come up with more
concrete proposals until approval has been given by both the GEF (for the grant portion) and
EBRD’s Operations Committee (for the bulk of the facility). Within EBRD, the project has
passed the first stage, entitled Concept Review, which means EBRD staff can now undertake
firmer negotiations with potential participating FIs. Given the benefits for local FIs
associated with this project (both financial and reputational) and the potential demand
demonstrated in the Demand Study, we think this facility will prove a very tempting business
proposition for local banks.
The Environmental Expert. You recommend that the Environmental Expert should not be a
single person or Company.
We must ensure that the Environmental Expert is providing an impartial and consistent review
of proposals submitted. For this reason we feel that the Environmental Expert, or at least the
administering of the Environmental Expert’s role, should be undertaken by one person or
company. However, recognising the wide variety of potential projects that may be submitted,
the Environmental Expert could tap into a network of other experts to help in reviewing the
cost effectiveness, practicality and eligibility of submitted proposals. Budgets will be
modified accordingly to cover the potential additional costs associated with such an approach.
Issue 4. Other Questions – Annex 3. You asked how we arrived at the US$ 9 million figure
for the GEF grant.
Sizing such a facility is always difficult simply because of the inherent uncertainties, and
therefore risks, associated with launching a new product. In this case there were two key
SLOVENIA: Financing of Water Pollution Reduction Projects through Local Financial Intermediaries
factors – the Demand Study and guidance from GEF. The Demand Study showed a total
demand (industry plus municipal) of around US$ 552 million. Taking a very conservative
view, we thought that, in the first instance, maybe 10% of that demand could translate into
loans, i.e. around US$ 55 million. Additionally, we received guidance that for a innovative
projects such as this, GEF might provide anything up to about US$ 10 million in grant
financing. Taking into account that a certain amount of that grant would need to be used for
technical assistance activities we worked on the basis of a US$ 9 million grant complemented
by US$ 45 million of EBRD funds for a US$ 54 million facility to meet that 10% demand.
This represents a leveraging effect of 5 EBRD dollars to every 1 dollar of GEF financing
which, we understand, is a ratio that GEF has not normally been able to achieve before.
Management of the CF. You asked for more information on how will the CF be managed?
Management of credit lines extended under this facility will be by participating FIs. FIs will
apply to EBRD for a loan under the facility and, if accepted, the loan will be extended. At
this stage, there is no transfer of funds, simply a commitment by the FI to take up to the
agreed amount. When the FI has agreed a number of sub-loans with companies, it will then
make an application to EBRD to drawdown funds from the amount committed. EBRD
transfers to the FI the amount required to finance the sub-loans and the FI then provides that
to the companies. The administration of the sub-loans is covered by the FIs in both terms of
staffing and associated costs. The administration of the overall credit facility, including
disbursement of the GEF grants, will be undertaken by EBRD and the costs associated with
that borne by EBRD. Remember, local FIs will receive incentives to participate financed
through the grant portion provided by GEF, while EBRD receives a fee from GEF for
developing and operating this project.
Issue 6. Context of the GEF Goals. The issue is paragraph 13 of the Main Report needs to
be strengthened to increase clarity with respect to the linkage of a GEF-supported countryspecific
investment project to the relevant OP 8 objectives.
The following text has been added into Section 13 of the Main Document to address the
issue raised by the STAP reviewer.
The project addresses the objectives defined under GEF Operational Program (OP) 8
(Waterbody-based). Specifically, this OP provides for, among other objectives, “… a logical
progression of GEF-funded activities – from project development to analyses of
transboundary priority environmental concerns to formulation of an international water
Strategic Action Program to eventual regional capacity building or country-specific
investment projects.” As has been demonstrated above, the proposal has been prepared within
the context of the ICPDR, JAP, and the SAP. Moreover, the project will establish a technical
and financing modality that addresses key causes of trans-boundary nutrient pollution in the
industrial, municipal and agricultural sectors in Slovenia with a view to developing and
demonstrating practical and cost-effective solutions for achieving economically sustainable
environmental improvements in the industrial and municipal sectors. One of the major
outcomes of the project will be replication of this modality to other countries in the DRB.