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The environmental financing strategy methodology was developed in response to the limitations of national environmental strategies and action plans to adequately address associated financial issues. Environmental financing strategies aim to organise information in a form that facilitates decision making, whether in setting policies and targets, creating or strengthening institutions, or mobilising sources of financing. The key (and this was the major limitation of NEAPs) is to impart realism, and promote the concepts of affordability and cost-effectiveness in the implementation of environmental programmes...
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A major challenge when developing environmental financing strategies in EECCA is the lack of available data on investment and rehabilitation needs at the individual facility level. In order to overcome this challenge and enable successive iterations of alternative policy combinations in an environment where detailed and credible data is scarce, a software tool was created to enable realistic estimation of total financing needs by aggregation of individual needs...
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This chapter provides an overview of the generic process and tasks of developing and implementing an environmental financing strategy (EFS). The actual implementation of the EFS methodology in a given country or region may, of course, deviate from this general description depending on the specific context and local circumstances...
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Country-specific analyses conducted in the years 2000-2002 using the EFS methodology and FEASIBLE have revealed and quantified several financial challenges that EECCA countries face in their efforts to keep up and improve the level of urban water and wastewater services. But at the same time these exercises have also helped the governments identify realistic and concrete steps to improve infrastructure services even under very tight budget constraints...
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In accession countries, the demand for environmental improvements is driven by the need to comply with the environmental requirements of the EU environmental legislation. Substantial financial resources are being made available domestically, supplemented by the pre-accession financial instruments (mainly ISPA). In addition, financial mechanisms in keeping with the Polluter-Pays Principle are emerging; increasingly enterprises and municipalities are financing their own environmental investments and raising funds on financial and capital markets...
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