EUROPEAN UNION CORLEAP Conference of the Regional and Local Authorities for Committee of the Regions the Eastern Partnership

EU FINANCIAL ASSISTANCE AVAILABLE TO LOCAL AND REGIONAL AUTHORITIES IN EASTERN PARTNERSHIP COUNTRIES

TABLE OF CONTENTS

INTRODUCTION ______3

EU FINANCIAL ASSISTANCE AVAILABLE TO LOCAL AND REGIONAL AUTHORITIES IN EASTERN PARTNERSHIP COUNTRIES ______4

➞ Thematic programmes ...... 6 ➞ Bilateral programmes ...... 8 ➞ Regional instruments ...... 12 ➞ Overview of fi nancial instruments available to LRAs per country...... 21

FINANCING THROUGH THE EUROPEAN INVESTMENT BANK AND THE EUROPEAN BANK FOR RECONSTRUCTION AND DEVELOPMENT _23

➞ The European Investment Bank (EIB) ...... 23 ➞ The European Bank for Reconstruction and Development ...... 27

ABBREVIATIONS ______33

LIST OF TABLES AND BOXES ______34

REFERENCES ______35

INTRODUCTION

Jiří Buriánek This booklet is intended as a follow-up to the initial Secretary General publication The EU funds available for Local and Regional European Committee of the Regions Authorities from the Eastern Partnership Countries, issued by the Committee of the Regions in 2012. It contains updated information on the new local and regional funds available for the EaP initiative under the Multiannual Financial Framework (MFF) 2014-2020. The booklet is divided into two main sections: The fi rst section is based on the academic study carried out by the Aston Centre for Europe at Aston University. It serves as a guide and also gives an overview of projects fi nanced by the Pilot Regional Development Programmes during the period 2011–13. This fi rst section is concerned with two topics. Firstly, it deals with diff erent types of EU fi nancial instruments (e.g. thematic, bilateral and regional). Secondly, it presents details of conditions and opportunities on a country by country basis. The fi rst section of the booklet also gives details of the lessons learned by the EU during the previous MFF exercise, along with proposals on how to improve access to EU funds and programmes for LRAs in partner countries during the period 2014-2020. The second section of the booklet provides more general information on the European Investment Bank (EIB) and the European Bank for Reconstruction and Development (EBRD), along with details of the practical support that both institutions provide to LRAs in EaP countries. The European Committee of the Regions is grateful to the EBRD and the EIB for their cooperation and for their contribution to the work on the Conference on Local and Regional Authorities for the Eastern Partnership (CORLEAP). Providing funds for municipal projects is one of the best means by which the EU can assist the long-term development of local and regional governments. Informing LRAs in partner countries about possible funding – and about the role played by the EBRD and the EIB – is therefore of crucial importance. Strong local and regional authorities form one of the pillars of an eff ective and well-governed democratic state. At subnational level, governments are directly involved in promoting employment and managing both municipal growth and planning. They also provide basic services to the population such as waste collection, health, water, education and transport. The importance of local and regional authorities was confi rmed during the conclusion of the Vilnius Eastern Partnership Summit. The fi nal declaration at the Summit also suggested that local and regional authorities should be provided with targeted support. I trust that his booklet will contribute towards this aim and I hope that it will prove to be a useful tool for local and regional authorities in the partner countries. EU FINANCIAL ASSISTANCE AVAILABLE TO LOCAL AND REGIONAL AUTHORITIES IN EASTERN PARTNERSHIP COUNTRIES

EU FINANCIAL ASSISTANCE AVAILABLE TO LOCAL AND REGIONAL AUTHORITIES IN EASTERN PARTNERSHIP COUNTRIES This manual provides an update on the EU fi nancial assistance available to local and regional authorities (LRAs) in Eastern Partnership (EaP) countries in the new 2014–20 programming period and on the relevant institutional framework. It serves as a guide and also gives an overview of projects fi nanced by the Pilot Regional Development Programme (PRDP) in 2011–13 and the lessons learnt for LRAs. It advises on the practical steps that LRAs in Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine should undertake to access EU funds and gives strategic recommendations with a view to increasing the number of LRAs applying for EU funding. For example, this guide will show how EU fi nancial instruments could enable LRAs in partner countries to be the recipients of EU funding. The role of local authorities is both central and crucial to eff ective governance as it is at the local level that the great majority of public policies are implemented, basic services are delivered, and enterprises are established, and so on. Strong local and regional authorities form one of the pillars of an eff ective and well-governed democratic state. It therefore follows that the EU will only be able to improve the way in which it supports partner countries in their development by strengthening the capacity and capabilities of local authorities, including the environment in which they operate and their access to funding. Providing funds is one of the best means by which the EU can promote the long-term development of local and regional governments. Structural funds provide three kinds of leverage to improve the quality of governance: (1) better strategic planning and government policy making; (2) improved institutional and administrative capacity building; (3) a more cohesive, partnership-based approach to policy making. There are three types of EU fi nancial instruments (interview 1): • thematic, • bilateral, • regional. The European Neighbourhood Policy is funded through a specifi c instrument. For the 2014-2020 period, the European Neighbourhood and Partnership Instrument (ENPI) will be replaced by the new European Neighbourhood Instrument (ENI). With an overall budget of around EUR 15.4 billion, the ENI funds targeted instruments and supports objectives such as cross- border cooperation in the Eastern partner countries (EEAS, 2014b). Unfortunately, there is no general manual on the criteria that LRAs need to meet to access EU funds. Conditions are defi ned on an individual instrument-by-instrument basis depending on the specifi cs of the given fi nancial instrument and of the projects considered (interview 1). For more information on the specific conditions attached to each project/financial instrument, LRAs should refer to the calls for proposals published. Nevertheless, a number of recommendations can be made to maximise LRAs’ participation in the new Multiannual Financial Framework (MFF).

4 EU FINANCIAL ASSISTANCE AVAILABLE TO LOCAL AND REGIONAL AUTHORITIES IN EASTERN PARTNERSHIP COUNTRIES

The 2012 CORLEAP report on the EU funds available for LRAs from the EaP countries contains practical recommendations for increasing LRA access to EU funds (Copsey & Rowe, 2012a, pp. 47–54). It also includes six practical guidelines on preparing a funding application, which could be summarised as follows: 1. identify an open call for proposals on one of the relevant websites (see sections I–III); 2. establish what the proposal is for, i.e. what precisely would you like to do with EU fi nancial assistance; 3. make contact with relevant project partners and establish jointly the aims and objectives of the project, paying close attention to the details of what the funding is to be used for; 4. calculate the cost of the project, together with the project partners; 5. download all the relevant funding application forms and make sure that each of the sections is fi lled in appropriately, correctly and in full. You should seek external advice at this stage and run through several drafts of your project application; 6. return all of the necessary application documentation to the relevant funding authorities within the time frame set out in the call for proposals. The same report also emphasised the supporting role that the Committee of the Regions (CoR) plays in helping EaP LRAs to apply for funds (Copsey & Rowe, 2012a, pp. 52-54). With its network of relations with LRAs and its expertise in the area, the CoR can not only help position LRAs as central actors in development, but can also translate this potential into eff ective action and further increase awareness of the fi nancial instruments available to LRAs. The manual follows this logic. Sections I and II describe the EU funds available to LRAs by type: thematic, bilateral and regional/cross-border. The following table provides an overview of the diff erent fi nancial instruments available to LRAs in Eastern countries:

Table 1: Overview of fi nancial instruments available to LRAs in EaP countries1 Dimension Instrument Thematic • Civil Society Organisations and Local Authorities (CSO–LA)Programme

Bilateral • Specifi c country envelope • Pilot Regional Development Programmes (PRDPs)

Regional • Cross-Border Cooperation (CBC) Programme • Territorial Cooperation Programmes under the ERDF • Community Led Urban Strategies (COMUS) • Covenant of Mayors (CoM) • Sustainable Urban Demonstration Projects (SUDeP) • Eastern Europe Energy Effi ciency and Environment Partnership (E5P) • European Neighbourhood Programme for Agriculture and Rural Development (ENPARD)

1 Source: interviews with the Commission, Devco-EuropeAid, 2013; Commission, 2008b; Commission, Devco-EuropeAid, 2012; http://ec.europa.eu/ europeaid/regions/eu-neighbourhood-region-and-russia/eu-support-border-cooperation-eu-neighbourhood-and-russia_en; http://www.eaptc. eu; Commission, 2014c; Council of Europe, 2014c; Commission, 2013h; Commission, 2013i & 2013j; Commission/EBRD/EIB, 2013

5 EU FINANCIAL ASSISTANCE AVAILABLE TO LOCAL AND REGIONAL AUTHORITIES IN EASTERN PARTNERSHIP COUNTRIES

➞ Thematic programmes Civil Society Organisations and Local Authorities (CSO–LA) Thematic Programme 2014–202 The CSO–LA programme (Commission, Devco-EuropeAid, 2013) will support actions initiated and directly implemented by local authorities and actions meant to strengthen LRAs’ capacities.3 This thematic programme is defi ned by its substantial focus – the strengthening of civil society organisations and local authorities – and is implemented in the six eastern partner countries. It will support action promoting reform in the following key areas: • eff ective budget implementation; • tracking of public revenues and expenditures and budget literacy; • accessibility of budgetary information to citizens; • providing citizens with information on decision- making processes. This thematic programme is diff erent from the rest of the programmes as it focuses more on the actor with the aim of enabling the actor to realise his or her potential (interview No 5). Under these conditions, the major diffi culty is a lack of institutional capacities – a point on which the CSO-LA programme is working – as well as of an enabling environment (for instance the political-administrative framework in which LRAs can or cannot participate in the decision-making process with government actors, ibidem).

Objectives To enhance local authority contributions to development as: • actors in local governance and creators of local public spaces; • providers of public services, including social services; • promoters of inclusive and sustainable growth at local level; To reinforce regional and global networks of local authorities; To develop and support initiatives fostering citizens’ awareness of and mobilisation for development issues.

2 This information is based on a preparatory document and should be taken as indicative as long as the programming process is ongoing. 3 Under the previous programming period, this was called Non-State Actors–Local Authorities Programme or NSA–LA; the change was introduced in the Communication from the Commission on The roots of democracy and sustainable development: Europe’s engagement with Civil Society in external relations (Commission, 2012).

6 EU FINANCIAL ASSISTANCE AVAILABLE TO LOCAL AND REGIONAL AUTHORITIES IN EASTERN PARTNERSHIP COUNTRIES

Budget The 2014–20 Development Cooperation Instrument fi xed the allocation for the CSO-LA programme at EUR 1 907 billion (Commission, 2014d; interview 5). Indicative allocations for the diff erent programme priorities are as follows:

Priorities Indicative allocations 1. Focus on country level: enhancing CSOs and LAs 70% contributions to governance and development processes 2. Reinforce regional and global CSOs networks and ALAs 15% 3. Develop and support education and awareness 10% raising initiatives fostering citizens’ awareness of – and mobilisation for – development issues Support measures and unallocated reserve 5%

The subsequent distribution depends on the needs of each country (there is no cap on the country envelopes; interview 5).

Contact point European Commission DG Development Cooperation & EuropeAid B-1049 Brussels Email: [email protected] ➞ BOX 1 Example of a project successfully funded in an Eastern Partnership country: Armenia

ENSURING EFFECTIVE COLLABORATION BETWEEN IJEVAN MUNICIPALITY, HEALTH FACILITIES, CSOs AND CITIZENS IN ADDRESSING BASIC HEALTH AND SOCIAL NEEDS OF COMMUNITY POPULATION EU contribution: EUR 149 580 Benefi ciaries: Ijevan city, Tavush marz Description: The establishment of a collaborative platform between Ijevan municipality, health facilities, social support services, CSOs and citizens aimed at improving the health status of population of the Ijevan community. For more information see: http://eeas.europa.eu/delegations/armenia/projects/ list_of_projects/308958_en.htm

7 EU FINANCIAL ASSISTANCE AVAILABLE TO LOCAL AND REGIONAL AUTHORITIES IN EASTERN PARTNERSHIP COUNTRIES

➞ Bilateral programmes Under the national envelope of any EaP country, funding may also be available to LRAs. LRAs will have access to these funds when they can contribute to a particular objective (or objectives) agreed bilaterally.

Illustration 1: Belarus Community-based volunteer initiatives for civic groups in remote areas of the country aimed to reduce vulnerability and to improve conditions for inclusive, empowering and sustainable development in remote areas of Belarus through strengthening civil society and enhancing cooperation between local authorities and non-state actors (under the previous MFF; interview 3). Budget: EUR 243 813.75

Illustration 2: Moldova In the fi eld of renewal energies, LRAs were the main benefi ciaries of the Biomass project (under the previous MFF; interview 4). For 2014-2020 overall, the list of the projects and the funding available cannot be determined ex ante as it depends on their exact objectives and on the call for projects published.

8 EU FINANCIAL ASSISTANCE AVAILABLE TO LOCAL AND REGIONAL AUTHORITIES IN EASTERN PARTNERSHIP COUNTRIES

Pilot Regional Development Programmes (PRDPs) As introduced by the Commission Communication on the Eastern Partnership (Commission, 2008b), the Pilot Regional Development Programmes (PRDPs) constitute an additional way for the EU to further its objectives in regional development in EaP countries by making additional funds available to address local needs for: 1. infrastructure; 2. human capital; 3. promotion of small and medium sized enterprises (SMEs).4 Modelled on EU cohesion policy and addressing cohesion concerns within partner countries, the goal of the PRDPs is to share experience with each EaP partner country by conducting a regional policy dialogue and enhancing cooperation with partners in the area. PRDPs have been implemented in very diff erent ways in the EaP countries, with Belarus in particular being excluded and Azerbaijan being initially very reluctant to embark on them (interview 2). Implementation was based on bilateral cooperation between the EU and individual partner countries. Indeed, it depended on country-specifi c contexts after the identifi cation of the needs of each country and in light of the framework of the overall EU assistance package. References to PRDPs may be found in the annual action plans for each country.5 Already in the defi nition of the content of PRDPs, the EU and its partners faced diffi culties as the two sides did not share the same understanding of and approaches to regional disparities. In general, in the EaP countries, the same ministry covers regional and rural development as well as infrastructure. As these continue to be largely rural economies, there is hardly any distinction between regional and rural development. As a result, these diff erent aspects were brought together under the PRDPs (interview 2). The implementation of current programmes will continue until 2017–18. A few examples of the kinds of projects undertaken are given below. In countries where EU cooperation was already focused on regional development, such as Ukraine and Georgia, extra EaP funds have built upon existing experiences and lessons learnt (Commission, Development and Cooperation – EuropeAid, 2012).6 For example in Georgia, there is a major ongoing programme on regional development to help regions improve statistics, prepare strategies for development and create regional development councils. Other countries, such as Moldova and Armenia, are using the opportunity under the EaP to enter the sector for the fi rst time. In Moldova, for instance, the funding will help improve regional statistics and develop the capacity of relevant institutions such as the regional development agencies (ibidem). In Azerbaijan, some preparatory activities have taken place as part of wider institution building and policy advice programmes (ibidem). Large-scale programmes in the fi eld of regional development have been launched in Georgia and Armenia (interview 2). The involvement of civil society and local communities is of the utmost importance and is pursued in conjunction with other EU dedicated instruments, including the Neighbourhood Civil Society Facility or thematic programmes (Commission, Development and Cooperation – EuropeAid, 2012).

4 See Devco document: http://ec.europa.eu/europeaid/where/neighbourhood/regional-cooperation/enpi-east/prdps_en.htm. 5 A list of the annual action plans may be found at EuropeAid: http://ec.europa.eu/europeaid/work/ap/index_en.htm. 6 See http://ec.europa.eu/europeaid/where/neighbourhood/regional-cooperation/enpi-east/prdps_en.htm for more information

9 EU FINANCIAL ASSISTANCE AVAILABLE TO LOCAL AND REGIONAL AUTHORITIES IN EASTERN PARTNERSHIP COUNTRIES

A number of actions have been undertaken in EaP partner countries in response to their 2013 individual annual action plans:7

ARMENIA (Commission, 2013c)

Support has been provided to regional development based on the PRDP approach linking rural development (in partnership with farmers’ associations and cooperatives) with the broader regional development initiative.

AZERBAIJAN (Commission, 2013d)

Support has been given to regional and rural development to encourage diversifi cation of the economy and sustainable development in the regions.

GEORGIA (Commission, 2013e)

Support is in place for the implementation of the State strategy for regional development.

MOLDOVA (Commission, 2013f)

Support has focused on the regional development of Gagauzia, engaging local authorities and civil society and enhancing cooperation with Chisinau.

UKRAINE (Commission, 2013g)

A follow-up programme entitled “Support to Ukraine’s regional development policy” was launched in January 2013 to assist a large number of LRAs in improving their institutional and administrative capacity. This includes a process of learning by doing to link strategic priorities to available budgets and concrete regional development actions.

Lessons learnt No evaluation of the PRDP approach has been undertaken to date, although it has been extended until 2017–18, which suggests that the preliminary results have been positive. According DG Devco (interview 2), an initial lack of common ground on which to build cooperation in the fi eld of regional policy impeded the defi nition and implementation of PRDPs at fi rst. As a result, subsequent policy dialogue led the EU and its EaP partners to integrate regional development with agriculture and rural development to better address local needs. For the future programming period, these aspects should be mainstreamed in EU-EaP country cooperation. Some countries have also selected regional development as a priority for the 2014–20 period. That said, however, this pilot approach does not fi t in easily with the EU’s main methods of providing assistance (interview 2) and will require further refi nement. The following period will build more on existing policies, strategies and programmes through broader, more local and regional government reform-oriented programmes (interview 2).

7 See http://ec.europa.eu/europeaid/work/ap/index_en.htm for more information

10 EU FINANCIAL ASSISTANCE AVAILABLE TO LOCAL AND REGIONAL AUTHORITIES IN EASTERN PARTNERSHIP COUNTRIES

Budget Overall, EUR 62 million from the 2012–13 ENPI budget was allocated to PRDPs (this is part of the additional EUR 350 million funding that accompanied the launch of the Eastern Partnership). The overall PRDP allocation was broken down into fi ve country allocations. Contact points - EU delegations

Armenia 21 Frik Street, Yerevan 0002, Armenia Telephone: +374 (10) 54 64 94/Fax: +374 (10) 54 64 95 Email: [email protected] http://eeas.europa.eu/delegations/armenia/index_en.htm Azerbaijan Landmark III, 11th fl oor, 90A Nizami Street AZ1010 Baku, Azerbaijan Telephone: +99412-497-20-63 Email: [email protected] http://eeas.europa.eu/delegations/azerbaijan/index_en.htm Georgia 38 Nino Chkheidze St., Tbilisi, 0102 Georgia Telephone: (995 32) 294 37 63 / 294 37 69/Fax: (995 32) 294 37 68 ➞ BOX 2 E-mail: [email protected] http://eeas.europa.eu/delegations/georgia/about_us/ Example of a project welcome/index_en.htm successfully funded in Moldova an Eastern Partnership Kogalniceanu Street nr 12, MD 2001 Chisinau, Republic of Moldova country: Azerbaijan Telephone: (+373 22) 50 52 10/Fax: (+373 22) 27 26 22 CAPACITY BUILDING FOR CITIZENS’ PARTICIPATION E-mail: [email protected] AND INCREASING ACCOUNTABILITY OF ELECTED http://eeas.europa.eu/delegations/moldova/index_en.htm BODIES Ukraine EU contribution: € 120 374 10 Kruhlo-Universytetska St., Kyiv, 01024 Ukraine Benefi ciaries: Baku, Ganja, Sumgayit, Goychay, Telephone: +380 (44) 390 8010 /Fax: +380 (44) 253 4547 Guba, Jalilabad, Mingachevir, Shaki, Beylagan and E-mail: [email protected] Nakhchevan http://eeas.europa.eu/delegations/ukraine/index_en.htm Description: The project aimed at: • encouraging citizens to engage actively in public policy; • increasing organisational capacities of civic groups on participation in state governance; • strengthening relations between citizens and elected state bodies. For more information see: http://eeas.europa.eu/delegations/azerbaijan/projects/ list_of_projects/261487_en.htm

11 EU FINANCIAL ASSISTANCE AVAILABLE TO LOCAL AND REGIONAL AUTHORITIES IN EASTERN PARTNERSHIP COUNTRIES

➞ Regional instruments Cross-Border Cooperation Programme The Cross-Border Cooperation programme (CBC) supports cross-border cooperation projects between EU Member States and the partner countries along the external borders (land and sea) of the EU.8 The land border programmes include Belarus, Ukraine and Moldova and the sea basin programmes are open to Georgia, Armenia, Ukraine, Moldova (Black Sea Programme) and Belarus (Baltic Sea Region Programme). Azerbaijan, however, decided not to participate. The CBC programmes are open to LRAs and non-government actors. Each of the individual projects is managed separately. The key objectives of each project are listed below, along with the name of the managing organisation and links to project documents containing detailed information on the management and fi nancing of each project, updating the 2012 report. Six programmes were implemented on the EU’s Eastern border under the 2007–13 programming period, some of which will be extended as follows: 1. Baltic Sea Region;9 2. Black Sea Basin;10 3. Latvia-Lithuania-Belarus;11 4. Poland-Belarus-Ukraine;12 5. Hungary-Slovakia-Romania-Ukraine;13 6. Romania-Ukraine-Moldova.14 For the new programming period, in the Eastern and Southern neighbourhood, a total of 12 land border and one sea crossing programmes will be fi nanced, as well as four sea basin programmes. In the Eastern neighbourhood, out of the six programmes under the previous MFF, fi ve have been extended and one trilateral project has been split into two bilateral programmes (EEAS/Commission, 2014): 1. Baltic Sea Region; 2. Black Sea; 3. Latvia-Lithuania-Belarus; 4. Poland-Belarus-Ukraine; 5. Hungary-Slovakia-Romania-Ukraine; 6. Romania-Moldova; 7. Romania-Ukraine. The individual programme documents are currently being prepared.15 A call for proposals will follow for the selection of individual projects.

8 Further details are available from the ENPI website at: http://ec.europa.eu/europeaid/where/neighbourhood/regional-cooperation/enpi-cross- border/index_en.htm and http://www.enpi-info.eu/maineast.php?id=322&id_type=10. 9 For more information, see http://eu.baltic.net/Future_period_2014_2020.26029.html 10 For more information, see http://www.blacksea-cbc.net 11 For more information see http://www.enpi-cbc.eu 12 For more information, see http://www.pl-by-ua.eu 13 For more information, see http://www.huskroua-cbc.net 14 For more information, see http://www.ro-ua-md.net/index.php?option=com_content&view=article&id=60&Itemid=99 15 For updated information, see http://ec.europa.eu/europeaid/regions/eu-neighbourhood-region-and-russia/eu-support-border-cooperation-eu- neighbourhood-and-russia_en

12 EU FINANCIAL ASSISTANCE AVAILABLE TO LOCAL AND REGIONAL AUTHORITIES IN EASTERN PARTNERSHIP COUNTRIES

Objectives The CBC strategy has three overarching strategic objectives (EEAS/Commission, 2014): • to promote economic and social development in regions on both sides of common borders; • to address common challenges in environment, public health, safety and security; • to promote better conditions and procedures for ensuring the mobility of persons, goods and capital.

Budget In the 2007-2013 period, total funding under the ENPI CBC programme amounted to EUR 950 516 000. As of 2014, CBC is included in the European Neighbourhood Instrument (ENI) regulation. The 2014–20 allocation is currently under discussion with Member States. Indicative fi nancial allocations for each of the CBC programmes have been established for the 2014-2017 period, while illustrative allocations for 2018-2020 have been included in the EEAS/ Commission programming document (EEAS/Commission, 2014). The indicative total ENI funding for 2014-2020 amounts to EUR 489 000 000 – 598 000 000 (ibidem). For the Eastern partners, the indicative ENI funding amounts to EUR 265 469 773. The breakdown is as follows:

Table 2: Overview of ENI-CBC allocations for 2014-2020

2014-2017 2018-2020 2014-2020 2014-2020

Programmes ENI* ENI** ENI TOTAL*** Baltic Sea Region 5 028 571 3 771 429 8 800 000 8 800 000 Black Sea 13 882 355 10 411 766 24294 121 39 038 597 Latvia/Lithuania/Belarus 21 142 857 15 857 143 37 000 000 74 000 000 Poland/Belarus/Ukraine 50 228 373 37 671 279 87 899 652 175 799 304 Hungary/Slovakia/Romania/Ukraine 21 129 142 15 846 858 36 976 000 73 952 000 Romania/Moldova 23 142 857 17 357 143 40 500 000 81 000 000 Romania/Ukraine 17 142 857 12 857 143 30 000 000 60 000 000

* indicative ENI allocations ** illustrative ENI allocations *** The 2014-2020 total includes the ENI and the ERDF allocations for each project. Source: EEAS/Commission, 2014, Annex 2

The expected yearly programme allocations will be indicated in each joint operational programme. In addition to the funding for the programmes, an allocation will be made for programme support, which covers: 1. actions aimed at facilitating the exchange of experience and best practices among the programme partners, to build up the capacity of partner countries in particular with a view to helping enhance the preparation, implementation and management of current and future CBC programmes; 2. a small facility to create an IT system for exchange of information between the Commission and the CBC programmes. In addition, CBC under the European Neighbourhood Instrument also receives funding from the European Regional Development Fund (EEAS/Commission, 2014). Some of the Eastern partners are included in projects under the “European territorial cooperation” objective, supported by the European Regional Development Fund (ERDF) (Commission, 2014c).

13 EU FINANCIAL ASSISTANCE AVAILABLE TO LOCAL AND REGIONAL AUTHORITIES IN EASTERN PARTNERSHIP COUNTRIES

Objectives Transnational cooperation covers large territories involving national, regional and local partners. Its objectives are: • “maximising the impact of cohesion policy across the Union”; • “strengthening territorial cooperation by means of actions conducive to integrated territorial development”; • “enhancing institutional capacity of public authorities and stakeholders and effi cient public administration by developing and coordinating macro-regional and sea-basin strategies” (European Parliament/Council, 2013).

Budget Two special transnational cooperation programmes include both Member States and Eastern and other partners (Commission, 2014c):

Special transnational cooperation programmes Global ERDF contribution

BALTIC SEA EUR 263 830 658 Denmark, Germany, Estonia, Latvia, Lithuania, Poland, Finland, Sweden Belarus, Norway, Russia DANUBE EUR 202 095 405 Austria, Bulgaria, Czech Republic, Germany, Croatia, Hungary, Romania, Slovenia, Slovakia Bosnia and Herzegovina, Montenegro, Serbia, Moldova, Ukraine

Contact point European Commission DG Development Cooperation & EuropeAid B-1049 Brussels

14 EU FINANCIAL ASSISTANCE AVAILABLE TO LOCAL AND REGIONAL AUTHORITIES IN EASTERN PARTNERSHIP COUNTRIES

Territorial Cooperation Programmes16 Territorial cooperation programmes share the same objectives, namely:

Objectives • to strengthen cross-border relations between LRAs and civil society organisations; • to help develop joint solutions to common social and economic development challenges in the participating border regions. Each territorial cooperation programme focuses on the following broad priorities: • improving living conditions and economic and social development; • addressing common challenges (environment, employment, public health and any other fi eld of common interest); • promoting culture, education and sport. Eastern Partnership Territorial Cooperation (EaPTC) comprises the four following projects: 1. Armenia-Georgia 2. Azerbaijan-Georgia 3. Belarus-Ukraine 4. Moldova-Ukraine.

Budget EU funding for the territorial cooperation programmes comes from regional allocations under the 2013 budget year of the ENPI and covers the fi nancial period ending in December 2016 (interview 8). As set out in the respective Joint Operational Programmes (JOPs) and the EaPTC Programme Strategy, the allocations amount to: Armenia-Georgia (JOP, 2014) ...... EUR 1.35m Azerbaijan-Georgia (EaPTC Programme Strategy, 2013) ...... EUR 1.35m Belarus-Ukraine (JOP, 2014) ...... EUR 3.30m Moldova-Ukraine (JOP, 2014) ...... EUR 3.30m

Results The expected practical outcomes are: • increased cooperation between local and regional ➞ BOX 3 authorities and civil society organisations in the eligible border regions; Example of a project • strengthened capacity of LRAs to participate successfully funded in eff ectively in EU-funded programmes. an Eastern Partnership Contact point country: Azerbaijan Head Offi ce Palati Business Centre, Offi ce 411 STRENGTHENING THE CAPACITY OF 20 VILLAGE MUNICIPALITIES TO PROVIDE PUBLIC SERVICES (SAFE 19 D. Gamrekeli st., Tbilisi 0160, Georgia WATER SUPPLY) IN A RURAL AREA OF THE GARABAKH Tel.: +995 322 36 90 74 LOWLANDS OF CENTRAL AZERBAIJAN Email: offi [email protected] EU contribution: EUR 336 605 Benefi ciary: Rural area of Garabakh lowlands Description: The project aimed to enhance the capacity of 20 municipalities to provide access to drinking water and to sanitation infrastructure. For more information see: http://eeas.europa.eu/delegations/azerbaijan/projects/ list_of_projects/200296_en.htm

16 For more information, see http://www.eaptc.eu

15 EU FINANCIAL ASSISTANCE AVAILABLE TO LOCAL AND REGIONAL AUTHORITIES IN EASTERN PARTNERSHIP COUNTRIES

COMUS – Community Led Urban Strategies17 A sample of historic towns in the EaP countries will be the target of focused interventions in their historic centres to lay the foundations for an eff ective revitalisation of their urban and social fabric. These interventions will be channelled through the Community-led Urban Strategies – COMUS project, managed by the Council of Europe. The aim of the project is to pilot the regeneration of the urban and social fabric and enhance the value of local communities. This goal will be achieved through a series of capacity building activities that will, in the pilot phase, enable one town per country to draft and implement development strategies with the support of international experts (interview 13). The project as a whole aims to encourage new partnerships involving all stakeholders (citizens, local authorities, civil society and the private sector) in a sustainable development process and to improve existing procedures and policies (Commission, 2013h, p.140).

Objective To support LRAs in drafting development strategies.

Budget EUR 650 000 (Council of Europe, 2014c), with estimated transfers of EUR 40 000 per country. The Commission’s fi nal agreement on the budget was taken at the end of 2014, with the possibility of a considerable increase in the size of the budget.

Procedures • identifi cation of pilot towns and defi nition of management arrangements with partner countries; • implementation of pilot phase; • lessons learnt and replication. ➞ BOX 4

Contact point Example of a project Directorate of Democratic Governance successfully funded in Managing Diversity Division an Eastern Partnership Council of Europe – DGII country: Belarus F-67075 Strasbourg cedex Mikhael de Thyse SUPPORT FOR THE ENVIRONMENT AND SUSTAINABLE DEVELOPMENT IN BELARUS [email protected] +33 390 21 48 33 EU contribution: EUR 1 500 000 Benefi ciaries: 35 pilot regions Description: The pilot regions received expert support in Local Agenda 21 and Green Ways. To promote environmental protection and sustainable development at central and local levels, the project supported: • institutional capacity building; • actively involving communities in local decision-making; • public awareness raising. For more information see: http://ec.europa.eu/europeaid/documents/case- studies/belarus_environment_en.pdf

17 For more information, see http://www.coe.int/t/dg4/cultureheritage/cooperation/Kyiv/urbanrehab_en.asp

16 EU FINANCIAL ASSISTANCE AVAILABLE TO LOCAL AND REGIONAL AUTHORITIES IN EASTERN PARTNERSHIP COUNTRIES

Covenant of Mayors18 The Covenant of Mayors is a European Commission initiative launched in February 2008 to seek the commitment of LRAs in combating climate change. The instrument has an Eastern Dimension (Covenant of Mayors Offi ce East or CoMO-East), funded by DG Devco (interview 10). CoMO-East is a technical assistance project (providing information and training for instance to LRAs, but not funding: projects are funded through specifi c instruments such as SUDeP; interview 11). The initiative is open to cities from all EaP countries. Participating authorities can benefi t in a number of ways, including:

• issuing a clear public statement of commitment to CO2 reduction;

• reinforcing wider national eff orts in CO2 reduction on their territory or helping create new momentum; • benefi ting from the encouragement and example of other pioneers; • benefi ting from EU endorsement and support, including a contribution to the preparation and implementation of the Covenant-related Sustainable Energy Action Plan, and Public Relations (PR) support; • qualifying for funding available to Covenant signatories representing urban areas, ranging in size from small villages to major metropolitan areas the size of LondondPihhid or Paris, that have signed the Covenant of Mayors on a voluntary basis and are committed to implementing sustainable energy policies to

meet and exceed the EU’s 20% CO2 reduction objective through increased energy effi ciency and development of renewable energy sources; • all achievements are widely publicised on the Covenant website.

Objectives LRAs joining the Covenant of Mayors make a commitment to:

• go beyond the EU’s CO2 20% reduction objective; • prepare a Baseline Emission Inventory; • set up and implement a Sustainable Energy Action Plan; • submit regular Implementation Reports; • organise Local Energy Days.

Budget For the 2011–15 period the budget available for the CoM Offi ce East is EUR 4 302 779.55 (interview 12).

Contact Head of Covenant of Mayors Offi ce: Kristina Dely The Covenant of Mayors Offi ce (CoMO), established and funded by the European Commission, is responsible for the coordination and daily management of the initiative. It provides signatories with administrative support and technical guidance, facilitates networking between Covenant stakeholders and ensures the promotion of their activities. The CoMO is managed by a consortium of European networks representing local and regional authorities, led by Energy-Cities and composed of CEMR, CLIMATE ALLIANCE, EUROCITIES and Fedarene. 1 Square de Meeûs 1000-Brussels (Belgium) Tel.: +32 2 504 7862 Covenant of Mayors Offi ce East Tel.: +38 032 255 31 65 Email: [email protected]

18 For more information see http://www.covenantofmayors.eu/index_en.html

17 EU FINANCIAL ASSISTANCE AVAILABLE TO LOCAL AND REGIONAL AUTHORITIES IN EASTERN PARTNERSHIP COUNTRIES

JOINT LOCAL AUTHORITY/CSO DEVELOPMENT OF ➞ BOX 5 SOCIAL STRATEGIES AND SERVICES TO THE MOST Example of a project VULNERABLE IN GEORGIA successfully funded in an EU contribution: EUR 100 000 Eastern Partnership country: Benefi ciaries: Adjara, Guria and Kakheti regions Georgia Description: with the objective of enhancing capacity to provide social services, this project supported the development of joint local authority/CSO social strategies. For more information see: http://eeas.europa.eu/delegations/georgia/projects/ list_of_projects/271120_en.htm

Sustainable Urban Demonstration Projects (SUDeP) In 2013, the European Commission announced a new programme to help cities in both the Southern and Eastern Neighbourhoods to address local sustainable development challenges such as energy effi ciency, security of energy supply and sustainable economic growth. The eastern component focuses on the implementation of Sustainable Energy Action Plans under the Covenant of Mayors (Commission, 2013i & 2013j; interview 14).

Objective To enable local authorities to implement measures incorporated in their sustainable energy action plans targeting sustainable urban development.

Procedures The programme will be implemented through ➞ BOX 6 four major actions: Example of a project • demonstration projects; • the Municipal Finance Facility (ENP East only, with successfully funded in the European Investment Bank taking the lead); an Eastern Partnership • a supporting mechanism strengthening the capacity of municipalities to develop country: Ukraine demonstration projects and ensuring the visibility and dissemination of results; LOCAL SUSTAINABLE DEVELOPMENT STRATEGIES IN • scientifi c support by the Joint Research Centre (JRC) RURAL COMMUNITIES IN THE POLTAVA REGION for Sustainable Energy Action Plans. EU contribution: EUR 89 505 Budget Benefi ciary: Poltava region EUR 25 million for the Eastern areas Description: the project aimed at: (EUR 35.5 million overall): • call for proposals (grants): EUR 10.25 million strengthening the capacity of local authorities and • Municipal Finance Facility: EUR 12 million non-state actors; • supporting mechanism: EUR 2.5 million introducing best practices in the area of tourism and • scientifi c support from the JRC: EUR 0.25 million. cultural heritage preservation;

Contact point supporting local initiatives in cultural heritage preservation, diversity and tourism development; European Commission building partnerships on local sustainable development DG Development Cooperation & EuropeAid issues between local authorities, non-state actors, B-1049 Brussels communities and the private sector. Email: [email protected] For more information see: http://eeas.europa.eu/delegations/ukraine/projects/ list_of_projects/304599_en.htm

18 EU FINANCIAL ASSISTANCE AVAILABLE TO LOCAL AND REGIONAL AUTHORITIES IN EASTERN PARTNERSHIP COUNTRIES

Eastern Europe Energy Effi ciency and Environment Partnership (E5P) In 2009, the E5P fund was fi rst established with the aim of improving energy effi ciency and environmental protection in the EaP region. The initial focus was Ukraine, while Armenia, Georgia and Moldova joined in 2013 (Commission/EBRD/EIB, 2013).

Objective • Multi-donor fund for supporting energy effi ciency and environmental projects at municipal level. The sectors most likely to benefi t include district heating modernisation, water and wastewater treatment, projects to improve energy effi ciency in public buildings and projects to improve sustainability in municipal and transportation infrastructure.19

Budget EUR 93 million (pledged contributions as per June 2014). In addition, in October 2013, following the accession of Armenia, Georgia and Moldova to E5P, the fund received pledges of ca €20 million for each country (with the EU pledging EUR 10 million per country; interview 15). The fund merges fi nancial contributions from the European Union and a group of over ten nations to provide access to both investment and technical assistance grants for municipal sector projects. The fund also supports policy dialogue and regulatory improvements.

Contact point E5P c/o European Bank for Reconstruction and Development One Exchange Square London EC2A 2JN Tel.: +44 20 7338 6000 Email: [email protected]

➞ BOX 7 PROMOTING RENEWABLE ENERGIES IN MOLDOVA Example of a projects EU contribution: EUR 14 000 000 Benefi ciaries: 1 046 mayors and local civil society successfully funded in an representatives Eastern Partnership country: Description: training in community and resource Moldova mobilisation, project management, biomass heating solutions and energy effi ciency has been provided to mayors and local civil society representatives in order to: improve the heating system in public buildings; raise awareness about renewable energies and promote energy effi ciency. For more information see: http://ec.europa.eu/europeaid/ documents/case-studies/moldova_renewable_energy_ promotion_en.pdf

19 For more information see: http://www.nefco.org/sites/nefco.viestinta.org/fi les/FINAL%20English%20E5P%20brochure%20reduced%20size%20 from%20Alexa%201.pdf

19 EU FINANCIAL ASSISTANCE AVAILABLE TO LOCAL AND REGIONAL AUTHORITIES IN EASTERN PARTNERSHIP COUNTRIES

European Neighbourhood Programme for Agriculture and Rural Development (ENPARD) The EU has launched a programme aiming to support agriculture and rural development under the European Neighbourhood Policy.20 ENPARD is an approach and not a ready-made off -the-shelf fi nancial instrument available to partner countries (interview 7). It is based on the following four principles: • long-term policy planning; • integrated approach; • ownership by the partner authorities; • participatory approach. ENPARD can support diff erent activities in diff erent benefi ciary countries, providing of course that they fall within the broad area of agriculture and rural development. ENPARD is implemented through the European Neighbourhood Instrument (ENI). Under ENPARD, the EU off ers a dialogue on agriculture and rural development to all of its neighbourhood partners and it is prepared, via the ENI, to assist in implementing policies and related reforms for all those countries committed to making agriculture and rural development a focal sector in their cooperation with the EU. When priorities in the fi eld of agriculture and rural development have been agreed between the EU and a partner country, the authorities of the country and the EU delegation jointly prepare a national ENPARD programme.21 If a benefi ciary country decides that one of its objectives should be an increased role for regional and/or local authorities or should be implemented at the regional/local level, then such an objective would be included under the ENPARD programme and necessary funding would be made available for the local authorities. Moreover, ENPARD strongly promotes a participatory approach based on active involvement of civil society and other sector stakeholders, including local rural authorities, in the design and implementation of public policies for agriculture and rural development. In this context, local and regional authorities of the rural areas should be able to contribute (or at least be consulted) on the preparation of sectoral strategies and policies.

Contact point European Commission, DG Agriculture and Rural Development 130, Rue de la Loi, B – 1049 Brussels, Belgium Fax: +32 (0) 2-295.01.30 Email: queries should be submitted using the following form: http://ec.europa.eu/agriculture/contact/index_en.htm

20 The full details of the ENPARD programme may be found on the EuropeAid website at: http://ec.europa.eu/europeaid/news/31-05-2012_enpard_en.htm 21 For an illustration of the ENPARD programme, see the programme in Georgia at http://eeas.europa.eu/delegations/georgia/documents/brochures/ agriculture/enpard022013_en.pdf

20 EU FINANCIAL ASSISTANCE AVAILABLE TO LOCAL AND REGIONAL AUTHORITIES IN EASTERN PARTNERSHIP COUNTRIES

➞ Overview of fi nancial instruments available to LRAs per country

Table 3a: Overview of fi nancial instruments available to LRAs in Armenia and in Azerbaijan Instrument Armenia Instrument Azerbaijan Thematic Thematic CSO-LA ✓ CSO-LA ✓ Bilateral Bilateral Country envelope ✓ Country envelope ✓ PRDP ✓ PRDP ✓ Regional Regional CBC* ✓ CBC* ✗ EaPTC ✓ EaPTC ✓ Terr.coop.prgm ✗ Terr. coop. prgm ✗ COMUS ✓ COMUS ✓ CoMO-East ✓ CoMO-East ✓ SUDeP ✓ SUDeP ✓ E5P ✓ E5P ✗ ENPARD ✓ ENPARD ✓

Table 3b: Overview of fi nancial instruments available to LRAs in Belarus and Georgia Instrument Belarus Instrument Georgia Thematic Thematic CSO-LA ✓ CSO-LA ✓ Bilateral Bilateral Country envelope ✓ Country envelope ✓ PRDP ✗ PRDP ✓ Regional Regional CBC* ✓ CBC* ✓ EaPTC ✓ EaPTC ✓ Terr. coop. prgm ✓ Terr. coop. prgm ✗ COMUS ✓ COMUS ✓ CoMO-East ✓ CoMO-East ✓ SUDeP ✓ SUDeP ✓ E5P ✗ E5P ✓ ENPARD ✓ ENPARD ✓

21 EU FINANCIAL ASSISTANCE AVAILABLE TO LOCAL AND REGIONAL AUTHORITIES IN EASTERN PARTNERSHIP COUNTRIES

Table 3c: Overview of fi nancial instruments available to LRAs in Moldova and Ukraine Instrument Moldova Instrument Ukraine Thematic Thematic CSO-LA ✓ CSO-LA ✓ Bilateral Bilateral Country envelope ✓ Country envelope ✓ PRDP ✓ PRDP ✓ Regional Regional CBC* ✓ CBC* ✓ EaPTC ✓ EaPTC ✓ Terr. coop. prgm ✓ Terr. coop. prgm ✓ COMUS ✓ COMUS ✓ CoMO-East ✓ CoMO-East ✓ SUDeP ✓ SUDeP ✓ E5P ✓ E5P ✓ ENPARD ✓ ENPARD ✓

*under previous MFF Source: interviews; Commission, 2013f and 2013g; Commission, Devco-EuropeAid, 2013; Commission, 2008b; Commission, Devco- EuropeAid, 2012; http://ec.europa.eu/europeaid/regions/eu-neighbourhood-region-and-russia/eu-support-border-cooperation-eu- neighbourhood-and-russia_en; http://www.eaptc.eu; Commission, 2014c; Council of Europe, 2014c; Commission, 2013h; Commission, 2013i & 2013j; Commission/EBRD/EIB, 2013

22 EU FINANCIAL ASSISTANCE AVAILABLE TO LOCAL AND REGIONAL AUTHORITIES IN EASTERN PARTNERSHIP COUNTRIES

FINANCING THROUGH THE EUROPEAN INVESTMENT BANK AND THE EUROPEAN BANK FOR RECONSTRUCTION AND DEVELOPMENT

➞ The European Investment Bank (EIB) 1. Institutional overview The EIB is the bank of the European Union (EU) and its shareholders are the 28 EU Member States. Founded in 1958 under the Treaty of Rome, the Bank operates both in the EU and in more than 130 other countries. The Bank’s subscribed capital of EUR 242 billion and its AAA credit rating enable it to borrow at the best possible rates. The benefi ts of this funding situation are passed on to project promoters through competitive lending terms with long loan tenors which are adapted to the long-term investment projects supported by the Bank. The Bank has a long experience operating outside the EU – with operations in partner countries since 1063. Through these operations, the EIB’s objective is to support the EU’s external policy by providing clients with: • Lending and other forms of fi nancing • Access to blending mechanisms • Advisory services, including technical assistance In 2014, the EIB signed loans amounting to EUR 77 billion to support investment across Europe and around the world. Of these, EUR 8 billion was for investment outside the EU, with a total of EUR 1.2 billion in support of the Eastern Neighbours. EUR 940 million of signatures in Ukraine during 2014 demonstrate the EU Bank’s sustained EIB building commitment to this country’s economy in the face of current challenges. Alongside the Bank’s headquarters, in Luxembourg, the EIB has a number of local offi ces which allow the Bank to off er better support to its clients throughout all project stages. In the Eastern European partner countries, the EIB has representation offi ces in Moldova and Ukraine as well as an offi ce shortly to open in Georgia. 2. Policy context and objectives Outside the EU, the EIB operates mainly under the External Lending Mandate (ELM), given to the Bank by the EU, and supports projects that contribute to economic development in countries that have signed framework agreements with the EU. The new External Lending Mandate for 2014-2020, as well as a number of additional facilities at the Bank’s own risk – targeting in particular private sector investment and climate action – started in July 2014. The 2014-2020 ELM establishes a maximum lending ceiling for the Eastern Neighbourhood of EUR 4.8 billion. This represents an increase of 26% compared to the previous mandate, again highlighting the region’s importance for the EU. The own risk facilities represent up to EUR 5 billion more (these cover various geographical regions).

23 EU FINANCIAL ASSISTANCE AVAILABLE TO LOCAL AND REGIONAL AUTHORITIES IN EASTERN PARTNERSHIP COUNTRIES

Under this mandate, the Bank fi nances projects which European partner countries that have signed an Association contribute both to national objectives and to the EU’s Agreement with the EU: Georgia, Moldova and Ukraine. external policy objectives, defi ned for the Eastern Partnership countries in the European Neighbourhood Policy. The EIB The Bank’s lending supports investment projects therefore prioritises support for projects that focus on: presented by public and private promoters. The Bank’s fi nancing is project-linked – generally fi nancing the fi xed • Promoting local private sector, supporting small asset component of an investment. In all cases, a thorough and medium-sized enterprises (SMEs) and fostering project appraisal is carried out and, irrespective of the foreign direct investment (FDI); project priority area, all projects must meet certain criteria, • Strengthening economic infrastructure, for example in terms of economic viability, respect for including projects in the transport, energy, environmental and international procurement norms. environmental infrastructure, urban development, communication, health and education sectors; The Bank operates in close cooperation with other partners, including as co-fi nanciers, as fi nancial • Climate action, covering both climate change intermediaries, as guarantors, as partners in identifi cation mitigation and adaptation projects, in particular and as fi nancial arrangers. This is in part because the EIB the shift to clean energy in traditionally energy- may not fi nance more than 50% of the total project cost. intensive economies. As a rule, EIB direct loans are for amounts over EUR 25 In addition, and throughout all its investments, the Bank’s million, while fi nancing needs under this fi gure are met in partnership with an intermediary organisation. seeks to create employment, facilitate trade, encourage regional development, improve living conditions and For investments in the public sector, lending is possible to: support progress towards a greener economy. • the state In the Eastern Partnership countries, the signing of • a regional or local authority the Association Agreements, including Deep and • a public enterprise or institution Comprehensive Free Trade Agreements (DCFTAs), with Georgia, Moldova, and Ukraine, puts renewed priority Loans can be made either directly to the relevant on investment in infrastructure and support for SMEs in authority, or indirectly as a credit line which EIB channels these countries. to local authorities for infrastructure investment, for instance in partnership with a national ministry or a local 3. Results measurement intermediary fi nancial institution. Lending operations that are not entered into directly The EIB aims to support projects which have a signifi cant with the state must normally be covered by a sovereign positive impact on people’s lives. For its operations guarantee. If not, the creditworthiness of the sub- outside the EU, the Bank uses the Results Measurement sovereign borrower will be assessed by the EIB. Generally (ReM) Framework to ensure that investments are both speaking, in order to be eligible for EIB fi nancing, the credit economically and technically sound and comply with rating of the sub-sovereign borrower should be close demanding environmental and social criteria. The ReM to that of the State. This is already the case for some of framework not only guides appraisal but enhances the the Bank’s operations with municipalities in the Eastern Bank’s ability to monitor the actual results achieved, European partner countries. tracking outcomes throughout the project cycle. To date, around 50% of EIB loans in the region were As far as possible, ReM indicators have been harmonised extended to sovereign borrowers, while 15% were for other with those of other International Financial Institutions public sector borrowers, without sovereign guarantees. and development agencies to simplify client reporting The remaining 35% of operations were in the private sector. requirements for co-fi nanced operations. The Bank continues to be actively engaged in working with these partners to further improve coordination and harmonisation of results indicators. 4. Financial instruments Lending The Bank is committed to helping the Eastern European partner country to develop their economies and, despite instability in some countries, made in 2014 its second highest ever level of annual signatures. By the end of 2014, EIB fi nancing in the Eastern Neighbourhood had reached a total of EUR 6.3bn, with operations covering all the eligible Eastern European partner countries. The majority of loans were signed in the three Eastern

24 EU FINANCIAL ASSISTANCE AVAILABLE TO LOCAL AND REGIONAL AUTHORITIES IN EASTERN PARTNERSHIP COUNTRIES

EIB operations in the private sector may also be either direct, for investment projects over EUR 25 million, or intermediated, in the form of credit lines for SMEs, channelled through local intermediary banks, which take the project risk. A new EIB facility in support of DCFTAs will additionally allow the Bank to off er risk capital instruments, notably in support of microenterprises, helping to boost further private sector development, inclusive growth and private sector job creation. In order for countries to meet needs for infrastructure investment in a limited fi scal situation, there is an opportunity to promote greater involvement of the private sector in this large infrastructure projects. The EIB is well- placed for this and has a range of tools available to help EIB building fi nance project fi nance and public-private partnership operations. The Bank also off ers extensive expertise gained from investments in a variety of sectors both within and outside the EU.

Blending The blending of grant resources with EIB lending facilitates the development of projects which, whilst economically viable, require additional support to reach the implementation stage. One of the main sources of funds for blending is the European Commission’s Neighbourhood Investment Facility (NIF), which allows the Bank to channel technical assistance, investment grants and guarantees to these vital projects. The EIB is the largest fi nancier in the NIF, having been involved in over 60% of all the projects approved by the NIF Board since the inception of the Facility in 2008. Another facility for blending is the Eastern Europe Energy Effi ciency and Environmental Partnership (E5P). The E5P unites the Eastern Partnership countries, the European Commission and other bilateral donors, as well as the main IFIs active in the region. The EIB is a member of the E5P’s Steering Group and also participates as an observer to the Assembly of Contributors, which decides on allocations of E5P grants. Overall, the Partnership is designed to coordinate and accelerate the implementation of important energy effi ciency and environmental projects, which may also receive fi nancing from the EIB.

Advising Alongside its diverse range of fi nancing products, the EIB also brings a mark of quality to its projects, providing extensive in-house expertise – technical, economical, fi nancial, environmental, social – in order to ensure the best possible project design and implementation As part of the Bank’s eff orts to leverage its expertise and to enhance the quality and development impact of operations in the Eastern European partner countries, and to complement the resources provided by the EC’s NIF, the EIB has established the Eastern Partnership Technical Assistance Trust Fund (EPTATF), a multi-donor, multi- sector trust fund, which has already received contributions from 7 EU Member States.

25 EU FINANCIAL ASSISTANCE AVAILABLE TO LOCAL AND REGIONAL AUTHORITIES IN EASTERN PARTNERSHIP COUNTRIES

This Trust Fund fi lls critical gaps for the development and implementation of investment projects by providing 5. Some project examples fi nancing for: Yerevan Metro • pre-feasibility, feasibility and other studies for the preparation of investment projects This project was part of the Master Plan of Yerevan City to • institutional and legal assessments boost the urban environment in the Armenian capital by improving reliability and speed for public transport users. • environmental and social impact assessments • project management and/or promoter support The EUR 10 million loan – signed in two tranches in 2010 throughout the project implementation process and 2013 – was part of a fi nancing package including a loan • upstream studies to identify investment needs and from the EBRD as well as grants from the NIF. The EIB was priorities as well as horizontal activities addressing able to provide a long maturity as well as a grace period institutional issues and capacity building. which increased the aff ordability of the project for Armenia. In addition, the contribution of the Bank included advice In addition to direct project related support, the on improvement of project design, implementation and Trust Fund fi nances capacity building via the Eastern procurement, as well as environmental and social aspects. Partnership Internship Programme and the Eastern Partnership Secondment Programme. The secondment Chisinau trolleybuses programme allows the Bank to maximise the diversity This project aimed to make trolleybuses more appealing to of expertise available for its operations, whilst also the public, as well as contributing to a decrease in energy providing opportunities for professionals from public consumption and emission of pollutants in the Moldovan administrations and private companies in the partner capital. The project, signed in 2010, is now completed. countries to work within the EIB in Luxembourg. The EIB provided a loan of EUR 5 million to fi nance the Municipal Project Support Facility (MPSF) purchase of new trolleybuses. This was combined with a NIF The MPSF aims to support the provision of sustainable grant. The borrower was the Municipality of Chisinau, municipal services while protecting and preserving the which benefi ted from a favourable interest rate, as well urban environment. It supports investment projects with as a longer maturity than available from other fi nanciers. regard to water supply and sanitation, heating, street Here, too, EIB technical advice was important to ensure an lighting, energy effi ciency in public buildings and solid optimal implementation of the project. waste management. The Technical Assistance (TA) services may include project 6. Useful contacts preparation support, project implementation support, • General enquiries project verifi cation, capacity building and social awareness [email protected] activities, as necessary, and will assess quality of project • Chisinau offi ce delivery. Projects to be developed with the support of the [email protected] Facility will be screened, prioritised and selected according • Kiev offi ce to eligibility criteria. Comprehensive TA work plans leading [email protected] to successful implementation will be established. • Tbilisi offi ce The total costs of the investments to be supported by EUR opening shortly 20 m worth of TA services provided under this the Facility are estimated at EUR 500m. The facility is led by the EIB, along with the German KfW and will provide continuous support from project identifi cation, through project preparation, implementation and evaluation phase, thus accompanying the project through its entire cycle. The proposed Facility is therefore designed to ensure that investment needs are correctly identified, translated into appropriate investment projects, prepared to suitable standards, and their quality implementation is ensured and accelerated. The last of these objectives is to be achieved through packaging project preparation and implementation in one continuous offer, and an implicit commitment by the implementing EFI to provide funding to the investment project if the outcome of preparation is satisfactory.

26 EU FINANCIAL ASSISTANCE AVAILABLE TO LOCAL AND REGIONAL AUTHORITIES IN EASTERN PARTNERSHIP COUNTRIES

➞ The European Bank for Reconstruction and Development

The European Bank for Reconstruction and Here are examples of the projects in the partner countries Development (EBRD) was established to help build a new, post-Cold War era in Central and Eastern Europe. It has since played a historic role and gained unique EBRD helps improve water expertise in fostering change in the region. supply in northern Moldova The EBRD is committed to furthering progress towards ‘market-oriented economies and the promotion of The European Bank for Reconstruction and Development private and entrepreneurial initiative’. This has been its (EBRD) has provided a €10 million loan to Moldova to guiding principle since its creation at the beginning of develop a regional water supply system in the country’s the 1990s. north, including its second largest city of Bălți. During the frenetic years of the early 1990s the Bank’s The loan, to be split in two tranches of €6 million and emphasis on the private sector as the main driver for €4 million, is part of a fi nancing package of €30 million, change in Central and Eastern Europe was vindicated which also includes a €10 million loan from the European many times over. This was the period that established Investment Bank (EIB) and an expected €10 million the EBRD’s reputation as an expert on transition to the capital grant from the European Union’s Neighbourhood open market. It was heavily involved in areas such as Investment Facility (NIF). banking systems reform, the liberalisation of prices, The fi nancing will enable the municipality of Balti and privatisation (legalisation and policy dialogue) and the six districts – Florești, Soroca, Sângerei, Telenești, Râscani creation of proper legal frameworks for property rights, and Drochia – as well as the Ministry of Environment to all vital ingredients for change. consolidate their water and wastewater infrastructure into Such reforms were supported by sound advice, training a joint operating company. The newly created regional and technical expertise, and supplemented by major operator will then develop the Soroca-Bălți water pipeline investments in the private and public sectors. With into a more integrated water supply system, which will domestic capital on its own insufficient to finance improve the quality and effi ciency of water and wastewater transition, the Bank helped to bring in external capital services across Moldova’s northern region. from both private and public sources. The investment will help rehabilitate the Soroca-Bălți The bank is currently active in more than 30 countries pipeline and other water networks in the region, increase the from central Europe to central Asia and the southern number of new connections to the pipeline and within the and eastern Mediterranean. The EBRD is the largest districts, reduce water losses and increase energy effi ciency. single investor in its existing region. The Bank’s The project also aims to attract a private operator to manage investment also mobilizes significant foreign direct the water and wastewater services on behalf of the joint investment into its countries of operations. It invests operating company, which will result in more effi cient services. mainly in private enterprises, usually together with commercial partners. It provides project financing Enhancing the commercialisation and sustainability of from the financial sector and the real economy, both municipal enterprises, including water utilities, is among new ventures and investment in existing companies. It the EBRD’s top priorities in Moldova, which were set out in also works with publicly owned companies to support its recently approved strategy for 2014-2017. privatisation, the restructuring of state owned firms and improvement of municipal services. Moldova to receive €10 million The EBRD is owned by 64 countries and two intergovernmental institutions (the European Union to upgrade district heating and the European Investment bank). It maintains a close political dialogue with governments, authorities in Balti and representatives of civil society to promote its goals. Moldova has received a €7 million loan from the European The Bank’s activities have an impact also at the local Bank for Reconstruction and Development (EBRD) to and regional authorities. The EBRD’s operation in modernise district heating in its second largest city, Bălți. the municipal and environmental infrastructure give millions of people access to safe drinking water, sanitary With a potential investment grant of €3 million from the Eastern waste disposal services, green public transport, we-- Europe Energy Effi ciency and Environment Partnership (E5P), -maintained urgan roads and energy-efficient district the total fi nancing of €10 million will be extended to the heating. The Banks work with local governments, state-owned company CET-Nord JSC which provides district private operators and donors to bring these very heating services to 75 per cent of the city’s population, as well tangible improvements to people’s daily lives. as to numerous public buildings and commercial entities.

27 EU FINANCIAL ASSISTANCE AVAILABLE TO LOCAL AND REGIONAL AUTHORITIES IN EASTERN PARTNERSHIP COUNTRIES

The company will use the fi nancing to upgrade its district heating system, increase energy effi ciency, reduce operating costs and CO2 emissions. Individual heating sub- stations will be installed in residential buildings, allowing customers to control heat supply and reduce energy waste. In addition, three energy-effi cient combined heat and power generation plants will be installed. The heat generation system will be modernised to reduce losses and a coal-fi red boiler will be converted to use locally sourced environmentally friendly biomass fuel. As part of the project, the EBRD will also help design a programme to support corporate development at the CET- Nord JSC and help the company adopt a commercial approach to ensure it delivers reliable and sustainable services. Upgrading Bălți’s district heating is likely to be the fi rst project to tap into the E5P fund which Moldova has recently joined. E5P is a multi-donor fund pooling contributions from the European Union, as the largest contributor, and 12 countries to provide grant fi nancing alongside loans from international fi nancial institutions, including the EBRD, to help municipal authorities invest in concrete projects improving energy effi ciency and the environment. It is expected that the E5P fund will be widely used across Moldova in the coming years. The EBRD has also partnered with the Swedish International Development Cooperation Agency (Sida) which funded a study to determine the feasibility of this investment and will provide further funds to support CET- Nord JSC’s corporate development programme and the EBRD Deputy Director for MEI Lin O’Grady and Moldovan PM implementation of the project. Iurie Leanca at a signing ceremony in Balti EBRD fi nances water supply improvements in Yerevan The European Bank for Reconstruction and Development (EBRD) have provided a sovereign loan equivalent to €5.4 million to the Republic of Armenia, to be used to improve water supply for the 1.1 million inhabitants of Yerevan, the nation’s capital. Yerevan Djur CJSC, the operator of the water infrastructure in the city, will implement the project and support upgrades to the Yerevan’s water network by improving supply and reducing water losses. The company is fully owned by Veolia Environnement S.A. of France, the world’s largest supplier of water services, which has operations in 66 countries and strong expertise in water and wastewater services. The funds will be used to rehabilitate sections of the water distribution network that are in poor condition, replacing supply pipes. Yerevan Djur CJSC will also install new water meters for households. As well as reducing water losses, the investments will lower operational costs, while improving the reliability of tariff collection and of 24-hour supply in all targeted districts. In addition to EBRD fi nancing, the European Investment Bank (EIB) is considering a loan equivalent to €5.4 million and the European Union (EU), through its Neighbourhood Investment Facility (NIF), will provide grant funds of €5.5 million.

28 EU FINANCIAL ASSISTANCE AVAILABLE TO LOCAL AND REGIONAL AUTHORITIES IN EASTERN PARTNERSHIP COUNTRIES

The preparation of the project has been supported by a €200,000 pre-investment Technical Cooperation (TC) grant from the government of the Czech Republic. TC grant fi nancing for project implementation will be provided by the EBRD Water Fund (€200,000) and the ETC Fund (€200,000). EBRD and EU help to improve solid waste management in Armenia The European Bank for Reconstruction and Development (EBRD) is providing a €3.5 million loan to Armenia to fi nance the construction of the country’s fi rst European Union (EU) compliant solid waste landfi ll. The loan is complemented by a €3.5 million capital grant provided by the European Union Neighbourhood Facility. The new landfi ll, to be located in the city of Hrazdan in Kotayk Province and managed by eight participating municipalities – Hrazdan, Abovian, Charentsavan, Tsakhkadzor, Byureghavan, Yeghvard, Nor Hachn and Sevan – will be operating as a commercially sustainable unit with modern solid waste management systems, covering the collection and disposal of municipal solid waste. This will provide major environmental and social benefi ts for some 215,000 people in the area covered by the facility. This development represents a significant step forward in the implementation of the government’s plans to modernise and upgrade Armenia’s waste management system to European standards. It will serve as an example, raising public awareness of the importance of solid waste management. On top of EBRD and EU fi nancing the investment has received grant funding from donors. The government of Austria will support the implementation of the project and the corporate development of the landfi ll management company. The EBRD’s Shareholder Special Fund and the Early Transition Countries Fund are also providing EBRD and donors support government plans to modernise additional grants. waste management The EBRD upgrades Yerevan’s metro Yerevan’s state-owned metro was opened in 1981 with the ambition of becoming the backbone of the public transport in Armenia’s capital. However, after 33 years of operation, lack of investment has taken its toll on the metro’s safety and passengers’ experience of travel. Other serious challenges have emerged too, including the introduction of competitive minibus services and growing car ownership in Yerevan. The decline in the use of the metro has in turn caused overcrowding of the city’s roads and increased traffi c and road safety problems. For Yerevan, keeping the metro system, which serves over 1.9 million people a year, at the heart of the city’s life has become one of its highest priorities.

29 EU FINANCIAL ASSISTANCE AVAILABLE TO LOCAL AND REGIONAL AUTHORITIES IN EASTERN PARTNERSHIP COUNTRIES

Since 2010 the EBRD, EIB and EU have contributed a total of €30 million for the improvements carried out in two phases. So far, completed investments include rehabilitation of the track and power supply systems, purchase of a maintenance trolley, upgrade of the depot and replacement of the water pumps removing ingress water from the tunnels. A lot of this work has been happening behind the scenes, but the most visible to the passengers have been the newly modernised metro cars. The seriousness of the Soviet-era is long gone, replaced by a modern, sleek look. The carriages are also safe to run, with services every fi ve minutes at peak times and every eight minutes off -peak. Yerevan’s metro is not just receiving new investment fi nance. Through separately funded technical cooperation project supported by donors including Austria, the Czech Republic, the EBRD Early Transition Countries Fund (ETC Fund)22 and the EBRD Shareholder Special Fund, the company has benefi ted from corporate development measures focused on institutional and managerial improvements; been able to address environmental, health and safety concerns; and gained sound project implementation experience in tendering and contract administration. Given this generous support, Yerevan Metro Company is now managed more efficiently on a commercial basis and international standards of financial reporting are being applied. The city of Yerevan and the EBRD are working towards developing sustainable urban services with mixed means transport. Yerevan’s metro Improving water supply systems in Georgia Following years of under-investment in maintenance and repair, the municipal infrastructures for water supply and sewerage systems of many Georgian cities did not manage to provide a reliable, quality service to their inhabitants. The Georgian cities of Kutaisi - the country’s second largest - and Poti have recently benefi ted from investments which allowed them to conduct comprehensive rehabilitations of their water and sewerage services, restoring 24-hour service and improving water quality. Thanks to the grant funding from the Swedish International Development Corporation (SIDA), the Millennium Challenge Corporation (MCC) of the United States and the EBRD loan, Kutaisi could renew its well fi elds, transmission pumping stations and water supply network. The municipal company installed water meters for all households and also improved its fi nancial and operational performance. Similarly, Poti’s municipal water company received loans from the EBRD and the World Bank as well

22 Donors to the ETC Fund are: Canada, Finland, Germany, Ireland, Japan, Korea, Luxembourg, the Netherlands, Norway, Spain, Sweden, Switzerland, Taipei China and the United Kingdom.

30 EU FINANCIAL ASSISTANCE AVAILABLE TO LOCAL AND REGIONAL AUTHORITIES IN EASTERN PARTNERSHIP COUNTRIES as grant funding from Sida, the European Union, MCC, of approximately 2.5MW. It will also help decommission the EBRD’s Early Transition Countries fund and Black Sea 11 ineffi cient basement boilers; replace 19 obsolete small Fund, to fi nance an extension of the transmission pipeline boilers with modern high effi ciency gas boilers; modernise as well as the introduction of a metering programme and 15 boiler houses; and replace almost 13 kilometres of upgrades of the distribution network. distribution network pipes with pre-insulated pipes. Loan proceeds will also be used to install a computerised Not only did the grant -and loan-funded investments lead monitoring and dispatching system, which will control the to improved water service quality in the municipalities, network operations. they also served as important examples of cooperation between Georgian municipalities, international fi nancial Technical assistance, in the form of consultancy services, institutions and international donors to fi nance signifi cant necessary for both the preparation and implementation of environmental improvement projects. the project was provided by the government of Sweden. EBRD arranges fi nancing EBRD organises fi nancing package of €14 million to programme of €11 million improve district heating for the city of Lviv in Lutsk The European Bank for Reconstruction and Development (EBRD) has provided further assistance to the western The European Bank for Reconstruction and Development Ukrainian municipality of Lviv, which has already embarked on (EBRD), the Eastern Europe Energy Effi ciency and an investment programme aimed at modernising of its road Environment Partnership (E5P)23 and the Clean Technology and public transport network. The new fi nancing package Fund (CTF)24 are providing further resources to modernise includes a loan of up to €6 million from the Bank and a parallel district heating systems in Ukraine, which account for 20 investment grant of up to €5 million from the German Ministry per cent of the country’s total CO2 emissions and consume for the Environment, Nature Conservation and Nuclear Safety. almost 44 per cent of its resources for heat energy. These It is designed to continue investments in Lviv’s transport investments in district heating systems aim to increase infrastructure, with a focus on the urban tram network. energy and cost effi ciencies, improve fi nancial sustainability and support the regulatory reform of municipal utilities. The project will allow the extension of tram route 4, which would link the main residential area of Sykhiv with the city The latest of these projects will be implemented in the centre of Lviv. This extension to the Sykhiv suburb, which western municipality of Lutsk, for which the EBRD will has a population of almost 150,000, is expected to increase provide a loan of up to €7 million, which will be supported passenger volumes on public transport by 25 per cent. It by a €3 million loan from the CTF to the communal will improve the reliability and effi ciency of ecologically- enterprise “Lutskteplo”. The project will also receive a grant friendly, electric public transport and promote its use, thus of up to €4 million from the E5P to which the European signifi cantly reducing the level of emissions from cars. Union is the largest contributor. The proceeds will be used to improve energy effi ciency, reduce energy losses, gas This new investment builds on the fi rst project initiated by and electricity consumption and improve district heating the city and the EBRD in 2009, most of which has now been services for almost 150,000 residents in Lutsk in almost successfully implemented. This project rehabilitated tram 55,000 households tracks, roads and relevant infrastructure along the two most heavily-used routes in Lviv, provided a traffi c management The loan will fi nance the installation of 210 individual system and funded the modernisation of tram infrastructure heating sub-stations and a bio-fuel boiler with a net capacity and depots and acquisition of refurbished rolling stock.

23 The Eastern Europe Energy Effi ciency and Environment Partnership (E5P) is a €90 million multi-donor fund managed by the EBRD and designed to promote energy effi ciency investments in Ukraine and other eastern European countries. The fund was established under an initiative of the Swedish government during its presidency of the European Union (EU) in 2009. E5P complements energy effi ciency loans provided by fi nancial institutions including the European Bank for Reconstruction and Development, the European Investment Bank, the Nordic Investment Bank, the Nordic Environment Finance Corporation and the World Bank Group. Contributors to E5P are the EU and the US, as well as Denmark, Estonia, Finland, Iceland, Latvia, Lithuania, Norway, Poland, Sweden and Ukraine. 24 The $5.5 billion Clean Technology Fund (CTF) provides middle- income countries with highly concessional resources to scale up the demonstration, deployment, and transfer of low carbon technologies in renewable energy, energy effi ciency, and sustainable transport

31 EU FINANCIAL ASSISTANCE AVAILABLE TO LOCAL AND REGIONAL AUTHORITIES IN EASTERN PARTNERSHIP COUNTRIES

Technical cooperation support for this project has been provided by the European Commission, through its Neighbourhood Investment Fund. EBRD provides €30 million for district heating infrastructure in Lviv The EBRD is continuing its drive to modernise Ukraine’s district heating sector with investments aimed at increased energy and cost effi ciency, improved fi nancial sustainability and regulatory reform of municipal utilities. Its latest project in this sector, in the largest western Ukrainian municipality of Lviv, will consist of an EBRD loan of up to €20 million, supplemented by grant funding of up to €10 million from the Eastern Europe Energy Effi ciency and Environment Partnership (E5P). The fi nancing package will be provided to the communal enterprise Lvivteploenergo, which will use the proceeds to modernise and rehabilitate the existing district heating infrastructure in the city. The loan will fi nance the introduction of individual heating substations, the rehabilitation and modernisation of heat distribution networks, the installation of natural gas fi red mini-combined heat and power plants, the replacement of obsolete main transmission pipelines and the installation of necessary monitoring systems. It is expected that upon completion of the project almost half of Lviv’s population of 760 thousand people will benefi t from better quality and environmentally friendly heat and hot water services. The €10 million grant will be the largest grant to date provided by the E5P to a Ukrainian municipality. By implementing this project the municipality of Lviv will reduce the consumption of natural gas by 6.9 million cubic metres, electricity by 2,900 MWh and water by 15,900 cubic metres per year. CO2 emissions will also be reduced by almost 80 thousand tonnes per year through more effi cient utilisation of fuel. The important technical assistance necessary for the project preparation and implementation was provided by the government of Sweden.

32 EU FINANCIAL ASSISTANCE AVAILABLE TO LOCAL AND REGIONAL AUTHORITIES IN EASTERN PARTNERSHIP COUNTRIES

ABBREVIATIONS

ALAs . . . . . Association of Local Authorities CBC ...... Cross-Border Cooperation CoM ...... Covenant of Mayors CoMO-East . Covenant of Mayors Offi ce East COMUS . . . . Community-Led Urban Strategies CoR ...... Committee of the Regions CORLEAP. . . Conference of Regional and Local Authorities for the Eastern Partnership CSOs . . . . . Civil Society Organisations CSO-LA . . . . Civil Society Organisations and Local Authorities Programme E5P ...... Eastern Europe Energy Effi ciency and Environment Partnership EaP ...... Eastern Partnership EaPIC . . . . . Eastern Partnership Integration and Cooperation EaPTC . . . . . Eastern Partnership Territorial Cooperation Programme EBRD . . . . . European Bank for Reconstruction and Development EEAS...... European External Action Service EIB ...... European Investment Bank ENP ...... European Neighbourhood Policy ENPI ...... European Neighbourhood and Partnership Instrument ENI...... European Neighbourhood Instrument ENPARD . . . European Neighbourhood Programme for Agriculture and Rural Development ERDF . . . . . European Regional Development Fund ETC ...... European Territorial Cooperation EU ...... European Union JOP ...... Joint Operational Programme LRAs...... Local and Regional Authorities MFF ...... Multiannual Financial Framework NSA-LA . . . . Non-State Actors-Local Authorities PR ...... Public Relations PRDP . . . . . Pilot Regional Development Programme SUDeP . . . . Sustainable Urban Demonstration Projects SMEs . . . . . Small and Medium Sized Enterprises

33 EU FINANCIAL ASSISTANCE AVAILABLE TO LOCAL AND REGIONAL AUTHORITIES IN EASTERN PARTNERSHIP COUNTRIES

LIST OF TABLES AND BOXES

Table 1: Overview of Financial Instruments available to LRAs in EaP countries ...... 5 Table 2: Overview of ENI-CBC allocations for 2014-2020 ...... 13 Table 3a: Overview of fi nancial instruments available to LRAs in Armenia and in Azerbaijan ...... 21 Table 3b: Overview of fi nancial instruments available to LRAs in Belarus and Georgia...... 21 Table 3c: Overview of fi nancial instruments available to LRAs in Moldova and Ukraine...... 22 BOXES: Examples of projects successfully funded in the Eastern Partnership countries BOX 1:...... 7 BOX 2:...... 11 BOX 3:...... 15 BOX 4:...... 16 BOX 5:...... 18 BOX 6:...... 18 BOX 7:...... 19

34 EU FINANCIAL ASSISTANCE AVAILABLE TO LOCAL AND REGIONAL AUTHORITIES IN EASTERN PARTNERSHIP COUNTRIES

REFERENCES (2013) Eastern Partnership Territorial Cooperation Programme Strategy, available at http://www.eaptc.eu/en/materials.html#fc1 (last accessed 22 August 2014) (2014) Armenia-Georgia Joint Operational Programme, available at http://www.eaptc.eu/en/materials.html#fc1 (last accessed 22 August 2014) (2014) Belarus-Ukraine Joint Operational Programme, available at http://www.eaptc.eu/en/materials.html#fc1 (last accessed 22 August 2014) (2014) Moldova-Ukraine Joint Operational Programme, available at http://www.eaptc.eu/en/materials.html#fc1 (last accessed 22 August 2014) Commission (2008b), Communication from the Commission to the European Parliament and the Council – Eastern Partnership, COM(2008)823 fi nal, Brussels Commission (2013c), Annex 1 of the Commission implementing decision on the Annual Action Programme 2013 in favour of Armenia to be fi nanced from the general budget of the European Union Commission (2013d), Annex 1 of the Commission implementing decision on the Annual Action Programme 2013 in favour of Azerbaijan to be fi nanced from the general budget of the European Union Commission (2013e), Annex 1 of the Commission implementing decision on the Annual Action Programme 2013 in favour of the Republic of Georgia Commission (2013f), Annex 1 of the Commission implementing decision on the Annual Action Programme 2013 in favour of the Republic of Moldova Commission (2013g), Annex 1 of the Commission implementing decision on the Annual Action Programme 2013 in favour of Ukraine Commission (2013h), Annex I of the Commission Implementing Decision on ENPI East Regional Action Programme 2013 Part II – Action Fiche for Eastern Partnership Integrated Border Management Capacity Building Project Commission (2013i), New EU support for sustainable urban development in the European Neighbourhood, IP/13/802, Brussels Commission (2013j), Commission implementing decision of 14 August 2013 on the Annual Action Programme 2013 in favour of European Neighbourhood Policy countries to be fi nanced from the general budget of the European Union, C(2013)5300 fi nal, Brussels Commission (2014b), EU activities in Belarus, available at http://eeas.europa.eu/delegations/belarus/projects/overview/ index_en.htm (accessed 17 April 2014) Commission (2014c), Commission implementing Decision of 16 June 2014 setting up the list of cooperation programmes and indicating the global amount of total support from the European Regional Development Fund for each programme under the European territorial cooperation goal for the period 2014 to 2020, OJ L 178, 18.6.2014, pp.18-25 Commission (2014d), Multi-annual indicative programme 2014-2020 for the ‘Civil Society Organisations and Local Authorities’ thematic programme Commission, Development and Cooperation – EuropeAid (last update 10 December 2012), Regional development in the framework of the Eastern Partnership, online resource, http://ec.europa.eu/europeaid/where/neighbourhood/regional- cooperation/enpi-east/prdps_en.htm (accessed 15 April 2014) Commission, Development and Cooperation – EuropeAid (2013), Funding for Local and Regional Authorities (CORLEAP Annual Meeting) Commission, Development and Cooperation – EuropeAid (Last update 17 October 2014), EU neighbourhood & Russia – Cross Border Cooperation, http://ec.europa.eu/europeaid/regions/eu-neighbourhood-region-and-russia/eu-support-border-cooperation-eu- neighbourhood-and-russia_en (accessed 17 October 2014) Commission/EBRD/EIB (2013), Eastern Partnership: Armenia, Georgia and Moldova join Eastern Europe Energy Effi ciency Environment Partnership, BEI/13/163, Luxembourg Copsey, N. and C. Rowe (2012a), The EU funds available for Local and Regional Authorities from the Easter Partnership countries, European Union Council of Europe, Steering Committee for Culture, Heritage and Landscape (2014c), Report on the implementation of the programme of activities 2012-2013, CDCPP(2014)5, Strasbourg

35 EU FINANCIAL ASSISTANCE AVAILABLE TO LOCAL AND REGIONAL AUTHORITIES IN EASTERN PARTNERSHIP COUNTRIES

EBRD projects: http://www.ebrd.com/news/2014/moldova-to-receive-10-million-to-upgrade-district-heating-in-balti.html http://www.ebrd.com/news/2014/-ebrd-helps-improve-water-supply-in-northern-moldova.html http://www.ebrd.com/news/2014/-the-ebrd-upgrades-yerevans-metro.html http://www.ebrd.com/news/2013/ebrd-fi nances-water-supply-improvements-in-yerevan.html http://www.ebrd.com/news/2014/ebrd-and-eu-help-to-improve-solid-waste-management-in-armenia.html http://www.ebrd.com/news/2013/ebrd-organises-fi nancing-programme-of-11-million-for-the-city-of-lviv.html http://www.ebrd.com/news/2013/ebrd-provides-30-million-for-district-heating-infrastructure-in-lviv.html EEAS (2014b), How is the ENP fi nanced?, online resource available at http://eeas.europa.eu/enp/how-is-it-fi nanced/index_ en.htm (accessed 28 August 2014) EEAS/Commission (2014), Programming document for EU support to ENI Cross-Border Cooperation (2014-2020), Brussels Eastern Partnership Territorial Cooperation (2014), Homepage, online resource, http://www.eaptc.eu (accessed 25 April 2014)

36 EU FINANCIAL ASSISTANCE AVAILABLE TO LOCAL AND REGIONAL AUTHORITIES IN EASTERN PARTNERSHIP COUNTRIES

Interviews

1 ...... Commission, DG Development & Cooperation – EuropeAid, 15 April 2014 (on regional fi nancial instruments) 2 ...... Commission, DG Development & Cooperation – EuropeAid, 16 April 2014 (on PRDPs) 3 ...... EEAS, Delegation to Belarus, 16 April 2014 4 ...... EEAS, Delegation to Moldova, 16 April 2014 5 ...... Commission, DG Development & Cooperation – EuropeAid, 2 May 2014 (on CSO-LA) 6 ...... EEAS, Delegation to Azerbaijan, 15 May 2014 7 ...... Commission, DG Agriculture and Rural Development, 20 June 2014 8 ...... Eastern Partnership Territorial Cooperation Support Programme, 22 August 2014 9 ...... Commission, DG Development & Cooperation – EuropeAid, 22 August 2014 (on CBC) 10 ...... Covenant of Mayors, support offi ce Brussels, 25 August 2014 11 ...... Covenant of Mayors East Offi ce, 27 August 2014 12 ...... Covenant of Mayors East Offi ce, 28 August 2014 13 ...... Council of Europe, 28 August 2014 14 ...... Commission, DG Development & Cooperation – EuropeAid, 29 August 2014 (on SUDeP) 15 ...... European Bank for Reconstruction and Development, 2 September 2014 (on E5P)

37 CORLEAP Conference of the Regional and Local Authorities for the Eastern Partnership

[email protected]

April 2015

EUROPEAN UNION

Committee of the Regions

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