EBRD and GEF set up new environmental facility for cleanup of Danube
The EBRD and the Global Environment Facility (GEF) are setting up an environmental credit facility for Slovenia that will help clean up the Danube River Basin.
Dec. 8, 2003 -- The EBRD and the Global Environment Facility (GEF) are setting up an environmental credit facility for Slovenia that will help clean up the Danube River Basin.
The EBRD will provide up to €45 million to commercial local banks for on-lending to environmental investment projects related to the Danube, while GEF extends $9.9 million of grant funding. Volksbank.Ljudska banka d.d. will be the first participating bank to sign the loan agreement.
The aim of the facility is to promote environmental investments by private-sector companies and smaller municipalities. GEF will provide financial incentives needed to overcome barriers to environmental investment: upon successful completion of a project and after examination by an independent expert, borrowers will receive a completion fee; participating banks will receive fees to compensate the administrative costs associated with implementing the facility.
In addition, companies and municipalities are entitled to assistance in developing solutions to water pollution problems, ensuring cost effectiveness, structuring investments and other aspects. These services will be provided by the EBRD's TurnAround Management Group/Business Advisory Services programme. The additional environmental assistance is co-financed by GEF.
At the signing with Volksbank Ljudska banka d.d in Ljubljana, Rogers LeBaron, EBRD Director for Bank Lending, praised the facility as an innovative combination of financial services with environmental needs. The EBRD has commissioned a market assessment study and sees significant corporate, municipal and SME demand far in excess of this facility, he said. Access to environmental funding is crucial for Slovenia to meet EU standards.
Projects expected to be financed through the facility include the recycling of cooling waters at a glass production company, the upgrading of waste-water treatment at a textile company and the re-use of waste waters at a pulp and paper mill. Although the Danube is not flowing through Slovenia, 80 per cent of the country is in the Danube River Basin, a priority area for GEF.
The Global Environment Facility (GEF) is an international financial organisation that acts as a major catalyst for improving the global environment. GEF grants support projects in the areas of biodiversity, climate change, international waters, land degradation, the ozone layer, and persistent organic pollutants. Since its creation in 1991, the GEF has allocated $4.5 billion in grants to support more than 1,200 projects in 140 developing nations and countries with economies in transition.
The facility for Slovenia is a pilot project designed for further replication in other Danube River Basin countries.