This report presents the objectives, methodology, procedures and main findings of the project "Strengthening public finance capacity for green investments in the EECCA countries". The project, funded by the Organisation for Economic Co-operation and Development (OECD), was part of a collaboration under the GREEN Action Task Force, for which the OECD provides a secretariat.

The governments of Kazakhstan, Kyrgyzstan and Moldova have committed to the development of energy-efficient local public transport. This includes vehicles powered by cleaner fuels or technologies, such as compressed natural gas (CNG)/liquefied natural gas (LNG), liquefied petroleum gas (LPG), diesel Euro 5/6 and electricity. However, in many cases, their programmes are overly ambitious, costing is imprecise, timeframes are unrealistic, and budgets and sources of funding are not specified. In most cases, the institutional set-ups for implementation are not well designed.

This chapter provides a brief background of the whole regional project, including both preparation (identification) and implementation (analytical) phases in Kazakhstan, Kyrgyzstan and Moldova. The first part contains a short overview of the countries’ challenges with regard to their transition to sustainable and energy-efficient economies. This provides an important component of the (complex) justification of the project. In the second part, the chapter outlines the leading co‑operation objectives and milestones in each of the three focus countries.

This chapter outlines the main elements and approaches to designing and implementing public investment programmes with priority environment and climate-related targets. The design phase presents an overall structure and operating instructions of an OECD support tool called the Optimising Public Transport Investment Costs (OPTIC) model. For implementation, it presents possible strategies and ways to set optimal co-financing levels from the public purse. The chapter concludes with examples of good practices from the EU countries in achieving cost-effective and transparent public environmental spending targeted at domestic transport sectors.

This chapter describes the main results of the preparation process for green public investment programmes in Kazakhstan, Kyrgyzstan and Moldova. It starts with a brief transport sector and air pollution assessment for each of the three focus countries. It then presents the main outcomes of the respective programme analysis, including costs and associated environmental benefits. The design also proposes a three-level structure for managing each country programme: 1) a programming entity; 2) an implementation unit; and 3) a technical support unit. Finally, it illustrates some key obstacles observed during implementation of the respective country projects.

This chapter summarises the main opportunities and challenges associated with the launch and successful implementation of green investment programmes. In particular, it highlights the role of the international community and national public sectors in providing the necessary financial incentives and system support. Management of investment programmes, for example, could trigger private sector interest and participation in projects with added social value. In addition, the public sector has a crucial task in eliminating policy barriers and shortcomings in the countries’ regulatory, institutional and organisational frameworks. This is needed to achieve public transport that is energy-efficient, and environment- and user-friendly. The chapter and the report conclude with possible ways to address these barriers.