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European Union Strategy for the Danube Region (EUSDR) -- A World Bank Perspective

European Union Strategy for the Danube Region (EUSDR) -- A World Bank Perspective. High-level Meeting on Financing Belgrade, September 27 th , 2010. EU Strategy for the Danube Region. World Bank welcomes regional initiative and will endeavor to support

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European Union Strategy for the Danube Region (EUSDR) -- A World Bank Perspective

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  1. European UnionStrategy for the Danube Region (EUSDR) --A World Bank Perspective High-level Meeting on Financing Belgrade, September 27th, 2010

  2. EU Strategy for the Danube Region • World Bank welcomes regional initiative and will endeavor to support • Regional/ Trans-boundary programs tend to generate special benefits: • Better prioritization of investments (eg. trade) • Economies of scale (eg. power production) • Addresses connectivity (eg. transport) • Least-cost investments at regional scale • Reduces negative externalities (downstream effects) • Identifies win-win investments • Allows to integrate protection and productive uses • Builds mutual trust

  3. EU Strategy for the Danube Region However, adds complexity (and implementation risk): • At end of day, country must confirm priority (Parliament, MoF, Sector Ministry, …) and commit its resources for investment and for recurrent budgets • Often mis-match between national and regional priorities (eg. wastewater vs. water supply; transport and navigation interests, etc.) • Need to synchronize implementation time-line between countries  From “Strategy” to “Implementation Strategy”

  4. EU Strategy for the Danube Region • 2009 WB Independent Evaluation Report: “benefits can be reached if program well prepared and managed” • WB can contribute experience, eg. from • Greater Mekong Sub-Region: road transport, hydropower, power trade, fisheries and nature, flood management, labor mobility • Nile Basin: hydropower, irrigated agriculture, ecosystems • E Africa: Zambezi hydro, Regional Telecoms Facility • S and C America: trade, rivers and aquifers, etc.

  5. WB Operational Experiences • Over past decade fiscal absorption capacity was low • Finance is not limiting factor, implementation capacity is ! • Need more robust prioritization of investments • Across national budget, among sectors (eg. road vs. shipping) • Strategic action plan with high-priority “next steps” (not: dream list) • Need more investment realism  “bankable” propositions • Cut costs, then cut them again • Rigorous economic and financial feasibility analysis • Proper safeguards: social and environmental • Procurement, designs, permits … adequate preparedness? • Financial and institutional sustainability – secure 100% O&M budget

  6. How could WB collaborate? • WB will be willing to collaborate at level of the initiative • Will consider making available staff resources and TA • WB can bring comprehensive set of capacity building and knowledge products : • Policy analysis and advice, Public Expenditure Reviews • Multi-stakeholder Dialogue platforms • Management and investment strategies • Analysis on trade-offs between “productive” and “protective” investments (nature values) • Robust planning under climate change scenarios (eg. work with Sava and International Danube River Commissions) • Support for fiscal and administrative reform

  7. How could WB collaborate? • WB ready to consider how its finance can further support EUSDR  investment program is agreed through 5-year Country Strategic Partnership with MoF in lead • In most country programs, already substantial investment that would fit EUSDR • Blend of grant and loan most effective • WB is complementary to EIB and other financiers (eg. Roads packages in Serbia)

  8. How could WB collaborate? Strategic priorities • Support national development (based on CPS ) • Assist country to meet EU acquis or prepare for EU accession, e.g.: • Croatia, BiH: Establish Pay Agencies to receive agricultural funds • Croatia, BiH: Strengthening for Natura 2000 and Water Management • Bulgaria, Croatia: strengthen implementation capacity in selected sectors • FYR Macedonia, Croatia and others: prepare for Environmental Chapter (especially Water Framework Directive) • Romania: Functional Review of sectors

  9. How could WB collaborate? Strategic priorities • Make arrangements to help absorb Structural Funds and IPA funds, eg. • Poland: Odra Flood Protection (2007-2014): €505M -- 1/3 CEB, 1/3 EU Cohesion funds, 1/3 WB funds • BiH: Sava Navigation, Neretva River Basin Mgmt • Serbia: IPA 2011 R&D and Innovation Project ; Multi-donor TF • Etc. • EUSDR offers new framework and opportunity to achieve this

  10. Thank you Hvala !

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