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1 Lessons learntfrom the nationaland province levelfinancing strategy case-studies in the m unicipalsolid waste m anagementsector Alexander M artusevich Environm entalfinance Netw ork m eeting Almaty,K azakhstan,27 April,2006 Structure ofthe presentation Objective and scope ofthe publication Structure ofthe publication MSW sectorin EECCA:a globalpicture Status ofthe MSW sectorin EECCA Whyfinancing strategies (FS) FS methodology applying FEASIBLE tool FS case-studies Key lessons learnt Nextsteps 1
2 Objective and scope ofthe publication The objective is to synthesise and dissem inate the lessons learned from the FS case-studies on MSW,implem ented so farin EECCA countries as welas in som e EU accession and candidate countries. The publication also reflects on the FS methodology and FEASIBLE com putertool which have been continuously developed, assessing theirpresentstatus and identifying possible areas fordevelopm ent and improvem ents. Structure ofthe publication Executive sum m ary w ith majorfindings and recom m endations Status ofthe sector(key drivers and recenttrends, benefits from sound waste m anagem ent,institutional set-up,status ofservices and ofthe infrastructure,key problem s and cha lenges) Why Financing strategies and FEASIBLE tool? Financing Strategy applying FEASIBLE com puterbased tool conceptand key steps FS case-studies for MSW sectorimplem ented so far Lessons learntfrom the FS case-studies and policy recommendations D eveloping FS methodology and im proving FEASIBLE tool 2
3 MSW sectorin EECCA:a globalpicture Drivers and trends Production & Technologies C onsum ption w aste generation and com position R ebuilding cities:construction and dem olition waste Dem and for infrastru cture capacity and for R ecycling The sector Service Technologies Infrastructure Benefitsfrom sound M SW Environm ental Other(health and qualityoflife,em ploym entand poverty,etc.) Status ofthe MSW sector in EECCA (1/2) Institutionalset-up and key actors Organisation,regulation and governance W ho does w hat W hopays forw hat Status ofthe services and the infrastructure C overage and co lection rate Disposalin dum psites A «grey» econom y 3
4 Status ofthe MSW sector in EECCA (2/2) Key w eaknesses Institutional,organisationaland governance Policy instrum ents Enforcem entand com pliance Consequences Poorenvironm entalperform ance C onsequences on health (Almost)no investm ent Excessive costofoperating and rehabilitating the non-optim alinfrastructure Otherm issed opportunities Whyfinancing strategies There is a need forstrategic planning formsw infrastructure, while Soviet-style approach to planning failed in m any countries and provinces. R ecentdevelopm ents in the public budget planning also generated dem and fora sectorspecific planning tool The FS m ethodology and the com puterbased FEASIBLE toolwere developed to address the need 4
5 FS m ethodology applying FEASIBLE tool Key steps: delineate the region and setlong-term objectives and targets foreach group ofm unicipalities; define a scenario (a setofm easures and investm ent projects)to achieve the targets; calculate expenditure needed forimplem enting the scenario; make projections forvolum e/structure offinance available (a lsources and instrum ents)offinance assess affordability ofthe scenario forhouseholds (tariffs and userfees)and forthe public budget (capitalexpenditure programme,operating subsidies and socialsupportm easures) calculate the difference betw een the expenditure needs and the supply offinance (the cash flow gap) ifnecessary revise objectives/targets and/orfinancing to balance expenditure needs with the finance available FS case-studies In EECCA: Arm enia (Loriand Shirak provinces/m arzs) Ukraine (national) R ussian Federation (Novgorod,Yaroslavland Rostov oblasts,st.petersburg city and Leningrad oblast,the M ineralw aterregion,c aucasus) EU accession and candidate countries: Bulgaria (Vratza/Mezdra) Latvia (national) Poland (Zachodnipom orskieprovince) Turkey (national) 5
6 Key lessons learnt(1/2) The currentsituation is notsustainable: Institutiona lyand financia ly Environm entalconsequences The sector attractsprivateoperators A lotofopportunities forrentextraction (atpresent) Butwilitrem ain attractive ifoperators have to com ply with environm entaland econom icregulation? Technology choice isconstrained by the capacityto investand finance operations (the affordability issue),and by the status of the marketforrecyclables and recovered m aterials Feasible technicaloptions to co lectw aste in the region Feasible technicaloptions to treatco lected w aste R evenues from user charges are wellbelow the optim allevel Usercharge revenues are low and co lection rate is low biling and co lection mechanism m atters Tariffs/charges could rem ain below affordability thresholds, even ifoperators com ply with environm entalregulation W ilingness-to-pay and co lection efficiency increase w iththe qualityofthe service Key lessons learnt(2/2) Key issues to be addressed by a sound strategy Explore waste reduction incentives Explore alternative technologies to co lectand treat dom estic waste Explore options forinfrastructure optimisation Address the specific issue ofruralareas Assess the proceeds from recyclables Identify incentives foroperators to com ply to norms and standards There is room to lim itfinancialneeds The benefitsfrom intermunicipalcooperation Alternative business models(e.g.the articulation ofthe inform alsectorin co lecting recyclables) There are options to generate additionalrevenues: Usercharges:rates and co lection mechanism s Recycling Limited reliance on public funds 6
7 N extsteps Yourcom m entson the structure and key lessons Draftthe publication and invite com m ents Dissem ination w orkshop G enerate additionalexperience A varietyofterritories Additionalrevenue stream s Tow ards nationalstrategies THANK YOU! 7
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