PROJECT INFORMATION DOCUMENT (PID)
CONCEPT STAGE
Report No.: AB2136
Project Name
Romania Environmental Management Project
Region
EUROPE AND CENTRAL ASIA
Public Disclosure Authorized
Sector
Sub-national government administration (50%);Solid waste
management (20%);Other industry (20%);Vocational training
(10%)
Project ID
P093775
Global Supplemental ID
P099528
GEF Focal Area
M-Multi-focal area
Borrower(s)
GOVERNMENT OF ROMANIA
Implementing Agency
Ministry of Environment and Water Management
General Directorate for EU Funds
Romania
040129
Public Disclosure Authorized
silviu@mappm.ro
Environment Category
[X] A [ ] B [ ] C [X] FI [ ] TBD (to be determined)
Date PID Prepared
February 28, 2006
Estimated Date of
July 2006
Appraisal Authorization
Estimated Date of Board
October 2006
Approval
1. Key development issues and rationale for Bank involvement
In April, 2005, Romania signed an accession treaty with the European Union agreeing to an
Public Disclosure Authorized
accession date of January 1, 2007 with a possible 1 year extension to 2008 depending on
progress of reforms. While this represents a tremendous achievement, it also represents an
immense challenge, particularly related to high environment investment costs, and the need to
strengthen administrative structures and competencies. Romania closed negotiations on the
environment chapter (22) in November 2004, with detailed time based agreements for adoption
and implementation of regulations either by accession, or within negotiated implementation
periods for the most costly and difficult areas. Progress in meeting environment commitments
which began in the mid 90's, is being monitored regularly by DG Environment and will continue
post accession through self reporting mechanisms.
A National Development Plan for 2007-2013 is under preparation to program and plan for a
large increase in EU Grants available post-accession estimated at 10 Billion Euros between
2007-2009. The Ministry of Environment has been selected to manage one of six decentralized
Public Disclosure Authorized
units for administration of Structural and Cohesion Funds based on their experience pre-
accession in the administration of ISPA. The absorption of post-accession funds through viable
project proposals with requisite co-financing poses a tremendous challenge given limits to
capacity and local financing constraints with lower pre-accession funds1. Regional Development
Funds under the Ministry of European Integration as the EDIS management body, will also be an
important channel of post-accession resources for necessary environment investments. The
magnitude of environment investments required combined with the multiple institutions will
demand an extensive and improved capacity for inter-governmental coordination under
environment agency leadership. Recent EU member countries that have fallen short of absorbing
all post-accession funds made available serves to demonstrate the challenges ahead.
A Country Partnership Strategy (CPS) for Romania is under development. The upstream review
confirms that the environment remains a priority area for Bank assistance. The Bank's 2004
Romania Country Economic Memorandum includes a section on the environment and identified
the following key challenges of the environment acquis: 1) Strengthening institutional,
administrative, and operational capacity for implementation of the environment acquis; 2)
Ensuring the fiscal space and lowering costs of meeting proposed environmental investments; 3)
Development of mechanisms to improve affordability and address social costs of improved
environmental services ; and 4) Accelerating capacity of the private sector (and other non-
government parties) to meet EU Environment standards in line with improving market
competitiveness.
Institutional Capacity. Core administrative structures for the environment at the national and
decentralized level will play a critical role for ensuring adequate environmental compliance and
enforcement; awareness of legal requirements and potential technological solutions, development
of investment proposals for EU funds, and promotion of transparent and cost-effective decision
making through the collection and dissemination of data and information. Romania is currently
executing a staff plan agreed with the EU to improve capacity for implementing the environment
acquis by hiring over one thousand new environment public servants prior to accession,
including the introduction of a new National Environmental Protection Agency (NEPA) and a
Regional Environment Protection administrative level (8 REPA offices). New staff will require
training and capacity building to enable them to perform envisioned administrative functions. In
2004, the Government approved an increase in staff of the Ministry of Environment and its
subordinate bodies of 736 people.
Environment Compliance Costs. The cost of complying with the environment acquis in
Romania has been estimated at a staggering 29 billion between 2005 and 2019, the highest
costs estimated for any accession country. Largest costs will fall under the "heavy environment
investments" related to water and wastewater; solid and hazardous waste management; and large
combustion plant air quality control. EU Grants are expected to cover around 25 percent of
investments, with the rest requiring government and private funds
2. Proposed
objective(s)
The overall development objective of the proposed project is to build institutional and
regulatory capacity within the Government of Romania to implement the EU Environment
1 Between 2000-2004, EU approved in Romania approx. $850 million of ISPA Grant funds representing 24
water/wastewater and 6 solid waste management investments.
Acquis. Towards this, the project will provide technical assistance as well as undertake specific
investments that would not only build capacity for absorbing EU funds upon accession for
preparation and implementation of environmental acquis measures but also assist the country to
comply with several priority environmental acquis measures necessary for accession. Such
support would focus on three technical pillars: nature protection, including support for the EU
Natura 2000 program; water management for nutrient stress reduction; and contaminated lands.
All three of these technical pillars are rated as priorities by the government.
The global environment objective of the project is to mainstream global environmental issues
into the Government of Romania's overall environmental management program. GEF will assist
the country in catalyzing actions and leveraging additional funds necessary for undertaking
priority investments in three GEF focal areas: biodiversity, international waters and persistent
organic pollutants.
3. Preliminary
description
The project, to be implemented over five years, will include the following components:
Component 1- Nitrates
This component will assist the government of Romania to implement the EU Nitrates Directive
as well as selected measures under the Water Framework Directive related to nutrient pollution
(nitrogen, phosphorous, potassium, etc.). It will build on the successes of the GEF-supported
Agricultural Pollution Control Project (APCP), a pilot activity currently under implementation in
one county of Romania (Calarasi) which aims to reduce nutrients (nitrogen and phosphorous)
from agricultural sources to the Danube River and Black Sea.
The following activities are proposed under this component: (1) Support for Remedial Measures
implementation of action plans for remedial interventions for public and private, small and
medium-sized enterprises (SMEs) in each of the identified high priority NVZs; (2) Support for
the implementation of the Code of Good Agricultural Practices to public and private farmers for
adopting environmentally friendly agricultural practices, such as the planting of shelter belts,
buffer strips, windbreaks, nutrient management, conservation tillage, etc. (3) Support for Policy
and Regulatory Framework and its Implementation including harmonizing legislation with the
EU Nitrates and Water Framework Directives and strengthening its regulatory and enforcement
capacity; (4) Support for Monitoring, Reporting and Impact Analysis at the local, judet and river
basin levels through appropriate investments (equipment, etc.) and training, including a data
reporting system; (5) Support for Training and Demonstration (T&D); and 6) Public Awareness
and Replication.
Component 2- Contaminated Land
The issue of Contaminated lands has long been a priority of the Government of Romania as
reflected in the Romania State of the Environment Reports and the National Environmental
Action Plans. The following activities are identified for project support: (1) support to Soil &
Sub-Soil office in MEWM including elaboration of a Policy and Strategy for contaminated land
addressing the institutional, financial, ownership and operational aspects of contaminated land
management in an EU member state context; (2) (a) POPs - PCB Stockpile Removal (GEF)
whereby a demonstration project for PCBs stockpile removal and destruction in an agreed
priority site; (2b) evaluation of two POPs-related contaminated site remediation studies; (2c)
mainstreaming the NIP into the overall environmental management programs; and (3) EU grant
co-financing support.
Component 3- Nature Protection
MEWM's priority with respect to nature protection is to ensure sustainable financing of nature
protection while maximizing absorption of EU funds and meeting commitments of EU
accession. A new law on Environmental Protection provides a framework for public funding of
protected area management through an envisioned new "National Agency for Protected Areas
and Biodiversity Conservation". In this context, during project preparation, TA will be provided
to help develop more specific financial and institutional arrangements. Support for the new
Agency and co-financing for EU grant funds are envisioned under the project
Component 4- Institutional Investments
The institutional component of the loan targets potential support for a MIS; Laboratory
Equipment and training to reach certification; and support for environment staff training; and
project administration.
4. Safeguard policies that might apply
A safeguard category of FI is expected; however, A is also possible depending on the final
investments included under the loan, especially related to the activities under contaminated
lands.
5. Tentative
financing
Source: ($m.)
BORROWER/RECIPIENT 0
INTERNATIONAL BANK FOR RECONSTRUCTION AND
50-100
DEVELOPMENT
GLOBAL ENVIRONMENT FACILITY
15-21
Total
65-121
6. Contact
point
Contact: Karin Shepardson
Title: Sr Regional Coordinator
Tel: (385) 1-2357-248
Fax: (385) 1- 2357-200
Email: Kshepardson@worldbank.org