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Consulting Services for SUPPORT TO WATER RESOURCES MANAGEMENT IN THE RIVER BASIN PROJECT ID NO. 1099991

DRINA RIVER BASIN ROOF REPORT

December 2017

Consulting Services for SUPPORT TO WATER RESOURCES MANAGEMENT IN THE DRINA RIVER BASIN PROJECT ID NO. 1099991

DRINA RIVER BASIN ROOF REPORT FINAL

December 2017

PROJECT NO. A038803

DOCUMENT NO. 1

VERSION C

DATE OF ISSUE December 2017

PREPARED JV COWI-Stucky-JCI team as in Inception Report

CHECKED Nadja Zeleznik, REC

APPROVED Roar Selmer Solland, COWI

Consulting Services for SUPPORT TO WATER RESOURCES MANAGEMENT IN THE DRINA RIVER BASIN PROJECT ID NO. 1099991

This document has been produced with the financial assistance of the European Western Joint Fund under the Western Balkans Investment Framework. The views expressed herein are those of authors and can therefore in no way be taken to reflect the official opinion of the Contributors to the European Western Balkans Joint Fund or the EBRD and the EIB, as co‐managers of the European Western Balkans Joint Fund.

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Table of Contents Page No Acronyms and Abbreviations ...... viii 1 Introduction ...... 1 1.1 Background ...... 1 1.1.1 and Herzegovina ...... 2 1.1.2 ...... 2 1.1.3 Republic of ...... 2 1.1.4 Other Reports ...... 2 2 The Drina River Basin ...... 4 2.1 Natural setting ...... 4 2.1.1 Geographic, topographic and geologic characterisation ...... 4 2.1.2 Climate ...... 6 2.1.3 The Drina River and its main tributaries ...... 7 2.1.4 Groundwater in the DRB...... 8 2.1.5 Biodiversity and Protected areas ...... 9 2.1.6 Expected climate change impacts ...... 14 2.2 Socio-economic characteristics ...... 17 2.2.1 Natural resources ...... 17 2.2.2 Demography ...... 18 2.2.3 Cultural heritage and monuments ...... 19 2.3 Proposed development scenarios ...... 20 2.3.1 Republic of Serbia ...... 25 2.3.2 Montenegro ...... 28 2.3.3 ...... 30 2.3.4 Proposed integral development scenario for Drina River Basin...... 32 3 Water management ...... 35 3.1 Protection against adverse water effects ...... 35 3.1.1 Flood control ...... 35 3.1.2 Droughts ...... 37 3.2 Use of water ...... 38 3.2.1 Hydropower ...... 38 3.2.2 Irrigation ...... 40 3.2.3 Potable water ...... 40 3.2.4 Industrial uses ...... 41 3.2.5 Recreation ...... 41

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3.2.6 Aquifers ...... 41 3.3 Protection of water ...... 42 3.3.1 Sediment management ...... 42 3.3.2 Environmental flow ...... 42 3.3.3 Water quality ...... 44 3.3.4 Flora and fauna management ...... 50 3.4 Monitoring ...... 55 3.4.1 Introduction ...... 55 3.4.2 Results presented in IWRM Country Reports ...... 55 3.4.3 Results presented in IPF Country Reports ...... 55 3.4.4 Proposed new monitoring stations ...... 56 3.4.5 Conclusions related to monitoring ...... 56 4 Specific issues ...... 58 4.1 Coherence of development scenarios ...... 58 4.2 Transboundary issues ...... 58 4.2.1 Status, challenges and obstacles ...... 58 4.2.2 Solutions ...... 60 4.3 Legislation in the Field of Concessions ...... 61 4.4 Possible financing sources for the implementation of measures and recommendations ...... 66 4.5 Links to other related projects ...... 67 4.6 Information to stakeholders ...... 68 5 Conclusions and recommendations ...... 70 5.1 Conclusions ...... 70 5.2 Recommendations...... 71 6 List of References ...... 74 7 ANNEX: Hydropower projects in the Drina River Basin - a comparison of results ...... 80

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List of Figures Page No Figure 1: Main Deliverables and Project Timeline ...... 1 Figure 2: Drina River Basin ...... 4 Figure 3: The geotectonic position of central part of Balkan Peninsula between plate and ...... 6 Figure 4: The hydrographic network of the Drina River Basin...... 7 Figure 5: Existing and planned protected areas in the DRB in regard to proposed development scenarios ...... 11 Figure 6: Changes in mean annual temperature in future relative to 1961-1990 under two climate scenarios...... 15 Figure 7: Changes in annual precipitation in future relative to 1961-1990 under two climate scenarios. .... 16 Figure 8: Changes in mean runoff in future relative to 1961-1990 under two climate scenarios...... 17 Figure 9: Proposed development scenario for DRB (green – HPPs proposed by optimal scenario for Montenegro, pink – HPPs proposed by optimal scenario for Bosnia and Herzegovina and yellow – HPPs proposed by optimal scenario in Republic of Serbia) ...... 34 Figure 10: Urban, Industrial and solid waste hotspots at the DRB ...... 47

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List of Tables Page No

Table 1: Protected Areas of Bosnia and Herzegovina, Montenegro and Republic of Serbia in the DRB ...... 12 Table 2: Proposed and accepted Emerald sites of Bosnia and Herzegovina, Montenegro and Serbia in the DRB ...... 13 Table 3a: Structural development scenarios (Bosnia and Herzegovina) ...... 20 Table 3b: Structural development scenarios Montenegro) ...... 22 Table 3c: Structural development scenarios (Serbia) ...... 23 Table 4: Matrix of the criteria and indicators and their relative weight ...... 24 Table 5: The main characteristics HPPs in operation located in Republic of Serbia or managed by EPS ...... 26 Table 6: The main characteristics of HPPs proposed by optimal scenario in Republic of Serbia ...... 28 Table 7: The main characteristics HPP in operation and existing dam located in Montenegro ...... 29 Table 8: The main characteristics of HPPs proposed by optimal scenario for Montenegro ...... 30 Table 9: The main characteristics of the "Višegrad" HPP ...... 31 Table 10: The main characteristics of HPPs proposed by the optimal scenario in Bosnia and Herzegovina .. 32 Table 11: The flow regulation status of the existing reservoirs ...... 38 Table 12: The flow regulation status of the new reservoirs proposed within selected optimal scenarios for each country separately – integral developments scenario for Drina River Basin ...... 39 Table 13: Minimum EF hydrological methods of the riparian countries in the DRB ...... 43 Table 14: Comparison of water quality classification legislative in three countries ...... 45

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ACRONYMS AND ABBREVIATIONS AASWA Agency of the Adriatic Sea Water Area ASRWA Agency of the River Water Area, BiH Bosnia and Herzegovina oC Degrees Celsius DIV Diversion (Hydropower Type) DNA Designated National Authority DRB Drina River Basin EBRD European Bank for Reconstruction and Development EEA European Environmental Agency EEC European Economic Community EF Environmental Flow EIA Environmental Impact Assessment EP Elektroprivreda EPA Environmental Protection Agency EPCG Elektroprivreda Crna Gore (Montenegro) EPR Environmental Performance Review EPS Elektroprivreda Serbia ERS Elektroprivreda Republike Srpske EU European Union EUR Euro FAO Food and Agriculture Organisation FASRB Framework Agreement on Sava River Basin FBiH Federation of Bosnia and Herzegovina FCDA Federal Civil Defence Authority FGO Federal Geological Office FHMO Federal Hydro meteorological Office FHMS Federal Hydro meteorological Service FIA Federal Inspection Authority FMAWMF Federal Ministry of Agriculture, Water Management and Forestry FMEMI Federal Ministry of Energy Mining and Industry FMET Federal Ministry of Environment and Tourism FMIA Federal Ministry of Internal Affairs FMTC Federal Ministry of Transport and Communications FOFDP Federal Operational Flood Defence Plan FRY Federal Republic of FSO Federal Statistical Office GCOS Global Climate Observing System GDP Gross Domestic Product GEP Guaranteed Environmental Flow method GHG Green House Gas GIS Geographical Information System GW Groundwater GWB Groundwater Body GWh Gigawatt-hours HDWG Hydrology Domain Working Group HEC-HMS Hydrologic Engineering Centre – Hydrologic Modelling System HEC-RAS Hydrologic Engineering Centre – River Analysis System HIS Hydrological Information System

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ACRONYMS AND ABBREVIATIONS HME Hydro-mechanical Equipment HMSS Hydro-Meteorological Service of Serbia HMWB Heavily Modified Water Body HMZ Hydro Meteorological Institute HPP Hydropower Plant HS Hydrological Station IAWD International Association of Waterworks in the Catchment Area IBRD International Bank for Reconstruction and Development ICPDR International Commission for the Protection of the Danube River IMO International Meteorological Organization INC Initial National Communication INDC Intended Nationally Determined Contribution IPCC Intergovernmental Panel for Climate Change IPF Investment Prioritisation Framework ISRBC International Sava River Basin Commission IWRM Integrated Water Resources Management JCI Jaroslav Černi Institute JV Joint Venture KM Convertible Marks km kilometres Km2 Square kilometres kV Kilovolt kW Kilowatt kWh Kilowatt hour l/c/d Litres per capita per day LEP Law on Environmental Protection LFFEP Law on Fund and the financing of environmental protection RS l/s Litres per second l/s/km2 Litres per second per square kilometre LW Law on Waters LWM Law on Waste Management LWP Law on Water Protection m Metres m³/s Cubic metres per second m³/year Cubic metres per year MAEP Ministry of Agriculture and Environmental Protection - Serbia MAFWM Ministry of Agriculture, Forestry and Water Management (RS BiH) MARD Ministry of Agriculture and Rural Development - Montenegro MCH Meteorological, Climatological and Hydrological database MCT Ministry of Communications and Transport MET Ministry of Environment and Tourism Mg/l Milligrams per litre MH Ministry of Health MIA Ministry of Internal Affairs MIEM Ministry of Industry Energy and Mining (RS) mm Millimetres Mm3 Millions of cubic metres Mm³/yr Million cubic metres per year

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ACRONYMS AND ABBREVIATIONS mm/a Millimetres per year MME Ministry of Mining and Energy MNE Montenegro MOFTER Ministry of Free Trade and Economic Relations (BiH) MoU Memorandum of Understanding MQ Mean Monthly Flow MS Meteorological Station MSPCEEP Ministry of Spatial Planning, Civil Engineering and Environmental Protection (RS) mV Millivolts MVA Mega Volt Ampere (apparent power) MW Megawatt NAMA Nationally Appropriate Mitigation Actions Nat. Natural NE Not Endangered NE North East NGO Non-Government Organisation NH3 Ammonia NO2 Nitrous Oxide NRW Non-Revenue Water O3 Ozone O&M Operation and Maintenance OECD Organisation for Economic Cooperation and Development OEL Operation Elevation Level OG Official Gazette Pas Protected areas PE Public Enterprise pH a numeric scale used to specify the acidity or alkalinity of an aqueous solution PHI Public Health Institute PHO Public Health Office PSHPP Pumped Storage Hydropower Plant (reversible HPP) PM Particulate Matter (PM10 PM2.5) POP Persistent Organic Pollutants PRTR Pollutant Release and Transfer Register PUC Public Utility Company Q Discharge RBMP River Basin Management Plan RCM Regional Climate Model RCP Representative Concentration Pathways REC Regional Environmental Centre RES Renewable Energy Sources RGSO Republic Geologic Survey Office (RS) RHMO Republic Hydro Meteorological Office (RS) RHMS Hydro meteorological Service of Serbia RIA Republic Inspection Authority RNP Regional Nature Park RP Regional Park RS Republic of Srpska (Bosnia and Herzegovina) SAA Stabilisation and Association Agreement

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ACRONYMS AND ABBREVIATIONS SEA Strategic Environmental Assessment SEEBAP South East Biodiversity Action Plan SEI Stockholm Environment Institute SEPA Serbian Environmental Protection Agency SFRY Socialist Federative Republic of Yugoslavia SHPP Small (mini) Hydropower Plant SNC Second National Communication SNR Special Nature Reserve SO2 Sulphur Dioxide SOx Sulphur Oxides SRB Sava River Basin SRES Special Report Emissions Scenarios SRO Science Research Organisation TDA Drina Rapid Transboundary Diagnostic Scan and Analysis TNC Third National Communication TPP Thermal Power Plant TOR Terms of Reference UN United Nations UNDP United Nations Development Program UNECE United Nations Economic Commission for Europe UNEP United Nations Environment Program UNESCO United Nations Educational Scientific and Cultural Organisation UNESCO-IHE UNESCO – Institute for Water Education UNFCCC United Nations Framework Convention for Climate Change USA United States of America USD United States Dollar WAAC Water Area Advisory Council WAC Water Area Council WATCAP Water and Climate Adaptation Plan WB World Bank WBIF Western Balkans Investment Framework WD Water Directorate WEAP Water Evaluation and Planning System by SEI WFD Water Framework Directive WHO World Health Organisation WHYCOS World Hydrological Cycle Observing System WISKI Water Information Systems KISTERS WMO World Meteorological Organisation WMR Water Management Region WQI Water Quality Index WRMP Water Resources Master Plan WWTP Wastewater Treatment Plan % Percentage µg/l Milligrams per litre µS/cm Micro Siemens per centimetre µm Micrometres

World Bank Drina River Basin – Roof Report Support to Water Resources Management in the Drina River Basin 1

1 Introduction

1.1 Background The project for "Support to the Water Resources Management in the Drina River Basin" extends within the three riparian states of Bosnia and Herzegovina (Federation BiH and Republic of Srpska), Montenegro and Republic of Serbia. The World Bank awarded the project to the Joint Venture (JV) Consultant comprising COWI AS of Norway, as lead, together with JV partners Stucky Limited from Switzerland and Jaroslav Černi Institute (JCI) from Serbia. A World Bank contract (Contract No 8005176) to provide support to the Water Resources Management (WRM) of the Drina River Basin (DRB) was awarded in September 2014. The Lead Consultant is also supported by three Sub Consultants, the Consultant "Regional Environmental Center for Central and Eastern Europe" - "REC" with headquarters based in Hungary, the Consultant "CEStra", based in and the Faculty of Civil Engineering of the University of Belgrade (FCE-UBG). The overarching objective of the project is to support more effective water resources management in DRB taking into consideration sustainable water use, flood mitigation and environmental management, while involving stakeholder consultations to ensure adequate public participation. This approach supports water management authorities in preparation of investment plans, strategic environmental assessment (SEA) and the river basin management plans. The Project commenced in October 2014 with the Inception Phase (October – November 2014), however it was very evident at the onset that the project would need more time in order to answer the TOR requirements and to reach all relevant stakeholders in three riparian countries. The Project was therefore extended twice until December 2017. The Inception Report was prepared and presented at an Inception Workshop held in Zagreb on 1st December 2014. The final version of the Inception Report was submitted in English in February 2015. Following minor amendments, the World Bank and the Steering Committee subsequently approved the Inception Report in March 2015 and a local language version was prepared and distributed in May 2015. Based on the request of the Bosnia and Herzegovina stakeholders the inception report was additionally modified with more accurate data for Bosnia and Herzegovina in April 2017. Following inception, all subsequent reports with the exception of the report in hand (Roof Report) were prepared individually for each riparian state. The summary of the main deliverables of the Support to Water Resources Management in the Drina River Basin project is given in Figure 1.

Figure 1: Main Deliverables and Project Timeline

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1.1.1 Bosnia and Herzegovina

The Integrated Water Resources Management (IWRM) draft Country Report for Bosnia and Herzegovina was submitted in English in September 2015 and December 2015 (in local language). Comments were received from stakeholders and further comments made at a stakeholder workshop held in Belgrade on 25/26 January 2016. After receipt of these comments and further discussions, the final version of the IWRM Country Report for Bosnia and Herzegovina was submitted in June 2016.

The Investment Prioritisation Framework (IPF) Report for the Bosnia and Herzegovina part of the DRB was submitted in draft format in English on November 2016 and presented to the stakeholders at the meeting held in Sarajevo in January 2017. The improved version of IPF Report for Bosnia and Herzegovina was delivered in June 2017 after additional requirements from stakeholders, received in March 2017. Based on the public consultation meeting additional remarks and comments were collected, the resolutions presented in draft Public Consultation Report (October 2017) and resolved in the final version of the IPF Report for Bosnia and Herzegovina (November 2017).

1.1.2 Montenegro

The Integrated Water Resources Management (IWRM) draft Country Report for Montenegro was submitted in English in August 2015 (October 2015 for local language version). Comments were received from stakeholders and further comments made at a stakeholder workshop held in Belgrade 25/26 January 2016. After receipt of comments and further discussion the final version of the IWRM Country Report for Montenegro was submitted in June 2016.

The draft IPF Report for the Montenegro part of the DRB was submitted in English on November 2016 and was presented to stakeholders at the meeting in December 2016. After receipt of comments from stakeholders, the final version of the IPF report was submitted in June 2017. Based on the public consultation meeting additional remarks and comments were collected, the resolutions presented in draft Public consultation report (October 2017) and resolved in the final version of the IPF Report for Montenegro (November 2017).

1.1.3 Republic of Serbia

The Integrated Water Resources Management (IWRM) draft Country Report for Republic of Serbia was submitted in English in September 2015 (December 2015 for the local language version). Comments were received from stakeholders and further comments made at a stakeholder workshop held in Belgrade on 25/26 January 2016. After receipt of comments and further discussion the final version of the IWRM Country Report for Republic of Serbia was submitted in July 2016.

The draft IPF Report for the Republic of Serbia part of the DRB was submitted in English on November 2016 and presented to stakeholders in December 2016. After receipt of comments from stakeholders the final version of the IPF report was submitted in April 2017. Based on the public consultation meeting additional remarks and comments were collected, the resolutions presented in draft Public consultation report (October 2017) and resolved in the final version of the IPF Report for Republic of Serbia (November 2017).

1.1.4 Other Reports

Besides the country specific IWRM and IPF reports mentioned above, other deliverables were also submitted.

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This included the report on development of the water resources management (WRM) model for the DRB in the WEAP software (SEI, 2015), submitted as draft in English and local language in January 2017. After the trainings performed in January 2017 and additional one in June 2017, the comments from participants were integrated in the final report, delivered in September 2017 (in English and local language). In addition, the Public Consultation Report in English and local language which provides a summary of the main feedback to the planned WRM of the DRB after the final public consultation is prepared. The public consultations were held in July 2017 in all three countries and the report was presented in draft version of Public Consultation report, supplemented with the summary from the final public consultation meeting in Belgrade and published as Final Public Consultation report in December 2017. Finally, an Annual (Interim) Report was prepared in English and local language to respond to the World Bank TOR requirements, which reported on operational and financial issues. The presented Roof Report has the objective to provide the overall findings of the investigations, data collections and analyses for all riparian countries related to the Water Resources Management in the Drina River Basin. It is a high-level document summarizing the main results of the project in a concise and synthetic view for the whole Drina River Basin and not from country optics. It is based on the previous reports as mentioned above for all three countries (Bosnia and Herzegovina, Montenegro and Republic of Serbia) and summarises the main outcomes. This Roof Report emphasises the main issues and baselines retained in the study, harmonised at the DRB level in order to help for a sustainable water resources management.

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2 The Drina River Basin

2.1 Natural setting

2.1.1 Geographic, topographic and geologic characterisation Geographic characterization The Drina River is 346 km long and is the largest tributary of the Sava River Basin, which in turn is the largest tributary by volume of water of the Danube River Basin that drains into the . The Drina River Basin (DRB) has a surface area of 19,680 km2 and spreads over territory within principally three riparian states: Bosnia and Herzegovina (BiH), which is subdivided into two entities, Republic of Srpska (RS) and Federation of Bosnia-Herzegovina (FBiH), Montenegro and Republic of Serbia. In addition, accounts for a very small part of the DRB (<1%) and is not included within the scope of this project. The division of territory within DRB and the geographical determination is shown in Figure 2.

Figure 2: Drina River Basin The Drina originates between the slopes of the Maglić and Pivska planina mountains, between the villages of Šćepan Polje (in Montenegro) and Hum (in Bosnia and Herzegovina). The Drina River rises at the joining of the River and River near the town of Šćepan Polje. The biggest and the most water-abundant tributary in Bosnia and Herzegovina is the River. Its tributaries are also River, Bistrica River, Ćehotina River, Prača River, River, Drinjača River and others. The DRB makes one fifth of the Sava River basin, and even one third of the Sava River water arrives through the Drina River. The most water abundant tributaries of the Drina River originate in Montenegro and the Piva River, Tara River and Lim River provide two thirds of the Drina River water. Topographic characterization The average altitude of the DRB is 961.6 m a.s.l., but it ranges from 75.4 m a.s.l. at the mouth to more than 2,500 m a.s.l. on the highest mountains (e.g. Prokletije Mountain 2,694 m a.s.l., Komovi Mountain 2,487 m a.s.l. and Mountain 2,522 m a.s.l.).

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Geologic characterization The Drina River with its tributaries in Serbia, Bosnia and Montenegro flows over few geotectonic units (terranes, blocks; Figure 3). In its lower course on the north, the Drina River flows into the Sava River and passes through the Block terrane (JBT). Then it passes through the Vardar Zone Western Belt (VZWB), known as “ suture”, which marks tectonic boundary between the Drina-Ivanjica and Jadar-Kopaonik thrusts. Toward south, the Drina River passes through the Drina-Ivanjica Element (DIE), than the Dinaridic Ophiolitic Belt (DOB) and the East Bosnian-Durmitor Block Terrane (EBDT). In Montenegro, in the area of Dalmatian-Hercegovinian Composite Terrane (DHCT), the Piva and Tara rivers flow into the Drina River. In its lowest course, the Drina River is meandering strongly. In this part, the region of lies on the Bosnia and Herzegovina side, and the region of Mačva on the Republic of Serbia side. Both regions are very arable, covered by sediments of Neogene age (sands and pebbles, sandy clays and clayey marlstones of Lower Pliocene in age) and Quaternary sediments (sands and fine-grained pebbles). Towards south, the river is passing through clastic and carbonatic formations of Devonian-Caboniferous age (thick over 1000 m), also Middle Permian clastites, bituminous Upper Permian limestones, sediments of Lower and Middle Triassic (claystones, sandstones and limestones), andesites of Middle Triassic age, Upper Triassic limestones and small masses of Cenomanian limestones. Neogene sediments cut by Drina with tributaries are represented by marine and lacustrine facies. For DRB, also important is the eastern part of Boranja granodiorite intrusive with granodiorite-porphyrites and pegmatites, and also extrusive rocks: dacito- andesites, quartz-latites and following pyroclastites. Further, the Drina River in "Zvornik suture" (Vardar Zone Western Belt) cut rocks of Ophiolite melangeF of Jurassic age in which folded blocks and fragments of sediments of Lower Creataceous age are incorporated. From Zvornik, Drina River passes through Paleozoic rocks of Drina-Ivanjica Element, made of change of metamorphosed sandstones and siltstones partly intercalated with conglomerates, and through rocks of Triassic age. DRB in territory of Montenegro includes two geotectonic units: East Bosnian-Durmitor Block Terrane and Dalmatian-Hercegovinian Composite Terrane, both in general Dinaric oriented (northwest-southeast). On the north, it borders with Dinaridic Ophiolitic Belt, and on southwest it is overthrusted over Dalmatian- Hercegovinian Zone. DRB includes areas of mountains , Pivske mts., Durmitor, Ljubišnja, Kovač, Sinjajevina, Lisa, Bjelasica, Komovi, Visitor, Mokra, Hajla and Žljeb. The East-Bosnian-Durmitor Block, which predominates in Montenegro, is built of clastic sediments of Paleozoic age, then clastic, carbonatic and siliceous sediments and volcanic rocks of Triassic age, also rocks of Jurassic, Cretaceous, Neogene and Quaternary age.

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Figure 3: The geotectonic position of central part of Balkan Peninsula between Moesia plate and Adriatic Sea Legend: DHCT - Dalmatian-Hercegovinian composite terrane; CBMT - Central Bosnian terrane; EBDT (=IBDB) - East Bosnian-Durmitor terrane; DOBT (=DOP) - Dinaridic Ophiolite Belt terrane; DIT (=DIE) - Drina-Ivanjica terrane; JBT(=JB) - Jadar Block terrane; VZCT - Vardar Zone composite terrane; SMCT - Serbian-Macedonian composite terrane. 1. Fault, observed and covered; 2. Thrust; 3. Tectonized boundary.

2.1.2 Climate Climate of the DRB is complex and influenced by general atmospheric circulation, its elongate shape in north-south direction, local orography and proximity of the Adriatic Sea. The southernmost part of the basin has a Mediterranean and a maritime temperate and humid climate according to the Köppen climate classification. Moderately cold and humid continental climate can be found at the altitudes above 1,000 m. Mediterranean influence, although mild, can be found in the upper part of the basin, up to Foča. From that point downstream a temperate continental climate prevails with warm summers and moderately cold winters. Generally, from south to north, along the altitude decline, accumulated annual precipitation also decreases, from about 2,100 mm measured in Kolašin on average to 820 mm in . In the same direction, mean annual temperature increases from 4.6 °C in Žabljak to 11 °C in Loznica. Seasonal distribution of precipitation differs throughout the DRB. Northern parts receive the most rain in the late spring, mainly in May and June, while winter is dry with the lowest precipitation in February. Due to the influence of the Mediterranean climate in the southern parts, maximum rain falls in the late autumn and the minimum during the summer months. The warmest month is July and the coldest is January. Relative humidity in the DRB is rather uniform, and is at its lowest in the period June-August and the highest in the December-January period. Snow cover significantly impacts the Drina River water regime due to large amounts of water accumulated in it, with the highest flows recorded in spring time, in April and May.

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Snow depth in some sections of the lower middle part of the DRB can be as high as 1.20 m (corresponding to a maximum of 200 mm of water) with frequent snow-drifts and in upper sections it can even exceed 5 m. Fogs constitute a characteristic feature of the Drina River valley and can occur throughout the year, but are most frequent in spring and autumn. Complex local topography in the upper course of Drina River significantly affects and modifies wind direction and speed. Despite this, strong winds are quite rare and are generally of low intensity.

2.1.3 The Drina River and its main tributaries The Drina River is the largest tributary of the Sava River in terms of the total area of the basin, length of the watercourse and the volume of water. The Drina River originates in Montenegro at an altitude of 2,500 m a.s.l. between the slopes of the Maglić and Pivska Planina mountains, between the villages of Šćepan Polje (in Montenegro) and Hum (in Bosnia and Herzegovina), draining a substantial karst plateau that receives the highest annual rainfall in Europe (about 3,000 mm/a), resulting also in the highest specific runoff in Europe (up to 50 l/s/km²). The hydrographic network of DRB is shown in Figure 4.

Figure 4: The hydrographic network of the Drina River Basin.

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The three source-rivers of Drina River in Montenegro are Tara River (sub-basin area of 2,006 km²), Piva River (1,784 km²) and Lim River (5,968 km²). The Tara River and the Piva River merge at Šćepan Polje along the Bosnia and Herzegovina /Montenegro border with a combined mean annual discharge of 154 m³/s, whereas the Lim River joins the Drina River at the Višegrad reservoir with a mean annual discharge of 113 m³/s. The Drina River reaches the confluence with the Sava River at an altitude of 78 m a.s.l. on the Pannonian Plain (Semberija and Mačva) after a length of 346 km and a height difference of 350 m (equivalent to an average 1% slope), the mean annual discharge of the Drina River close to is about 400 m³/s. The major tributaries of the Drina River in Republic of Serbia are the Lim River with River, Rzav River, Ljuboviđa River and Jadar River. The major tributaries of the Drina River in Bosnia and Herzegovina are the Sutjeska River, Bistrica River, Ćehotina River, Prača River, Lim River, Rzav River, Žepa River, Rogačica River, Ljuboviđa River, Drinjača River and Janja River.

2.1.4 Groundwater in the DRB Carbonate rocks predominate in the DRB and are suitable for karst processes, which are a significant hydrogeological feature. The underlying geology is suited for karst processes, tectonic movements have created, and old karst plateau, which is, incised with deep such as the Piva, Komarnica and Tara rivers. Karstification can range from a few meters to >2,000 metres. These karstic features are numerous and characterized by surface and underground forms including cracks, gorges, dry valleys, sinkholes, caves, potholes and sinks. Hence, porosity is a defining feature in aquifers in the DRB. The following units occur in the basin: • Karst-fissure aquifer, with good permeability, • Karstic-fissure aquifer, with moderate permeability, • Fissured aquifer, • Intergranular aquifer with good permeability, • Intergranular aquifer with moderate permeability and • Aquitard with poor permeability Groundwater sources provide the main water supply to rural communities from boreholes, dug wells and from springs. The current knowledge of the flow regime of the aquifers is inadequate and limited systematic long-term monitoring has occurred, but more is needed to fully understand the groundwater regime. Spring flow varies considerably due to climatic conditions with the largest flows generally observed in the late autumn and early winter and the minimum flows between August and September. The ratio between the maximum and minimum flows is difficult to quantify due to lack of data. The general trend of groundwater flow direction is along the Drina River valley from southwest to northeast. The lower parts of the DRB, especially Mačva and Semberija regions, are characterized by significant, still unexploited geothermal water resources.

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2.1.5 Biodiversity and Protected areas Biodiversity The DRB has a very complex and high diversity of ecosystems, adapted or developed in accordance with its notoriously extreme high and low flows. Even though, integrity of these ecosystems is already partially damaged as DRB hosts eight medium to large hydropower generation dams in addition with a history of lack of sustainable water and waste managements, which are already affecting sections of rivers. However, some sections of the flows in DRB are still rather untouched ecosystems and, despite possible pollution problems, constitute a unique heritage to be preserved. In addition, the DRB still hosts many species and habitats of outstanding ecological value and unique importance for biodiversity on national, regional and European level. Wetlands and alluvial forests are amongst of the most important habitats in DRB. Even though they are not covering large surfaces along the Drina River and its tributaries above the level of 140 m a.s.l, they are still an important factor in habitat diversity and they are providing conditions and shelter for a large variety of species and habitats that would be otherwise absent from the region. Downstream from the city of Zvornik, and especially from Loznica, all the way to the Drina River confluence into Sava River, wetlands are vast, old and more recent meanders dominate the landscape. These areas host some of the most important habitats on a continental level, they form freshwater supply, provide food and building materials, biodiversity. The wetlands help also in flood control, mitigate groundwater recharge, correcting the irregular discharge of dams, and the climate change. However, these precious ecosystems are insufficiently protected in the three countries of DRB. DRB is a region rich in biodiversity and is a home to many endemic species, as well as many species that have become rare or endangered locally and on continental level. Considering the large surface it covers, as well as the diversity of expositions and altitudes, DRB has very diverse flora and fauna. The Drina River Basin holds a high number of endemic species, many of them of European importance. The most famous endemic species in the DRB is the Serbian spruce (Picea omorika) but there are many others, including Campanula secundiflora, a Balkan stenoendemic species, whose populations are threatened by planned developments on the Lim River. The number of endemic and relict plants is exceptionally high in the southern part of the basin, in the karst massifs surrounding rivers Piva and Tara, where endemic plant diversity reaches almost a 100 per one UTM 10x10 square. In the whole Basin, the number of endemic plant species exceeds 130. As an example, here are some of the important endemic plant species: Daphne malyana, Saxifraga rocheliana, Centaurea incompta, Dianthus kitaibelii, Cerastium lanatum, Centaurea derventana, Aquilegia grata, Aquilegia nikolicii, Amphoricarpus autariatus, Valeriana braun-blanquetii, Campanula balcanica, Adenophora liliifolia, Cirsium wettsteinii, Cicerbita pancicii, Melampyrum hoermanianum, Teucrium arduini, Iris bosniaca. Endemic species are highly adapted to their home range and in a changing environment. Their adaptations can function as a sort of “insurance” for continuance of genetic diversity in the face of rapid changes. In average, losing one endemic plant species, between 10 and 30 specialized endemic animal species are gone with it. Thus, endemic species are a focus for the conservation of biodiversity. Drina River offers a variety of different habitats and ecosystems and is inhabited by more than 50 fish species. They are approximately half of all freshwater fish species found in all the three countries of the DRB. Drina River represents one of key fish diversity locations within the Balkans. The upper parts of the basin are primarily inhabited by Salmonid fish, mostly Danube Salmon (Hucho hucho) and Brown trout (Salmo labrax). Bullhead (Cottus gobio) and Brook barbel (Barbus caninus) are also common in these regions. These species are mostly affected by small dams, overfishing, especially Brown trout, and from a moderate amount of nutrients coming from nearby fish farms. Fishes are among the most endangered vertebrates. Preserving the rich fish populations of the Drina River would enable also the protection of a high proportion of the Balkan and European fish species and their genetic diversity. As an example, the Danube Salmon is one of the most endangered European fish species (IUCN Red list), endemic for Danube

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drainage, DRB being the most important population pool in the Balkans, totaling at 30% of Balkan distribution of the species. Its migration routes are interrupted with dams, and populations are showing a disrupted structure, whilst the population size has decreased significantly. Other important fish species present in the basin are the Grayling (Thymalus thymalus) and at only one locality (Gromiželj in Bosnia and Herzegovina), the European mudminnow (Umbra krameri). Regarding birds and mammals, the DRB shows exceptional richness. Indeed, there is a presence of over 230 species of birds and a large variety of mammal species. Otherwise, there are the rare elsewhere such as Brown bear (Ursus arctos), the Eurasian wolf (Canis lupus), the (Rupicapra rupicapra), the wild cat (Felis silvestris), the Eurasian Lynx (Lynx lynx) and the European otter (Lutra lutra), as well as two endemic species, the Blind Mole (Talpa caeca) and the Balkan Snow Vole (Dinaromys bogdanovi). Bats are exceptionally diverse in the DRB with a probable number of species ranging between 30 and 32. The Drina River has been confirmed as a corridor for the migration of bats. Especially important species are Barbastella barbastellus and Myotis bechsteinii, because they represent indicators for the quality of forest habitats and both are very abundant in the forests of DRB. In addition, DRB holds some very rare species for the region, such as Eptesicus nilssonii and Tadarida teniotis. The future management of the DRB needs to ensure that the focus of measures is not only on the restoration of pollution that affects rivers but also it must preserve the few important areas that are still ecologically intact. Nature protection in the basin is a challenging task as it is could oppose the planned investments and efficiency of its measures depends strongly on cross-border dialogues and regional cooperation. Protected areas A number of natural parks and protected areas covered the DRB and the landscape is dotted with unique glacial lakes and canyons. The DRB even host the Tara , a UNESCO World Heritage site. However, only 5.44% of the DRB is protected (under 3% in Bosnia and Herzegovina, 10% in Republic of Serbia and 7.9% in Montenegro), which is far under the European average. The DRB is then not sufficiently protected regarding the fact that it holds above average biodiversity and diversity of habitats. There are many of the planed protected areas (Pas), that could bring a better protection regarding terrestrial habitats but the benefit for the preservation of aquatic biodiversity is rarely considered in the future plans for protection. The existing and planned Pas are summarized in Table 1 and they are located in Figure 5.

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Figure 5: Existing and planned protected areas in the DRB in regard to proposed development scenarios

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Table 1: Protected Areas of Bosnia and Herzegovina, Montenegro and Republic of Serbia in the DRB Name and type of Protected Area Size (km2) Date Formed BiH: Federation Plans for several small sites exist BiH: Sutjeska: NP, IUCN: II 160.52 1962 (2012) Planned extension Gromiželj: SNR, IUCN: Ib Bijeljina municipality 8.33 2011 Sava-Drina: NP not yet protected Perućica (located within NP Sutjeska): SNR, IUCN: 14.34 1954 Ia Tara canyon and Ljubišnja: NP not yet protected Drina: NP 2017 Drina: Biosphere reserves not yet protected around 25 other PAs (see map) not yet protected Montenegro Biogradska gora: NP 56.5 1952 Durmitor: NP, UNESCO world heritage site, IBA 390 1952 Prokletije: NP 166.3 2009 Komovi: RP, IUCN: VI 195.04 2016 Piva: RP, IUCN: VI 320 2015 Serbia Tara: NP, Emerald site, IUCN: II 191.7 1981 Šargan – : RNP 108.14 2005 Part of the area of the village of Tršić and Tronoša 1965 Monastery: MNM Trešnjica River Gorge: 5.95 1995 SNR Trešnjica River Gorge Mileševka: RNP 4.57 1976 Zaovine: RNP Not yet protected Pester: 31.18 2016 Uvac: SNR 74.53 2006 Canyon of the Uvac River Slapovi sopotnice: MoN Waterfalls of Sopotnica 2005 River : RNP 419.23 2017 Many other MoN (small objects) Many sites from Serbian Ecological Network, most notable ones are Donje , Cer, Uvac and Not yet protected Milesevka, Valjevske planine, Ozren-Jadovnik, Kamena gora. Legend: MNM: Memorial Nature Monument; MoN: Monument of Nature; NP: Nature Park; RNP: Regional Nature Park; RP: Regional Park; SNR: Special Nature Reserve.

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Emerald sites Establishment of the Emerald Network in the DRB started in 2005 when the first projects aiming at designation of the Emerald sites in SE Europe was launched. Until 2011, the process was finished and identification of species and habitats was done with the proposal to expand the list of Emerald species that are significant for the individual countries that are sharing the basin. Most of the emerald sites are already in the protection system of the individual countries but this is not obligatory the case. The list of proposed and accepted Emerald sites can be found in the Table 2 and their spatial distribution seen in Figure 5. Table 2: Proposed and accepted Emerald sites of Bosnia and Herzegovina, Montenegro and Serbia in the DRB Emerald sites per country Surface (if known, in km2) Year of designation Serbia Trešnjica River Gorge 5.95 2011 Tara 191.7 2011 Zaovine 55.9 2011 Sargan-Mokra gora 108.14 2011 Zlatibor 419.23 2011 Milesevka River Gorge 4.57 2011 Pester 31.18 2011 Uvac River Gorge 74.53 2011 Montenegro Durmitor with Tara Canyon 1828 2011 Komovi 210 2011 Kanjon Pive 170 partially compliant Prokletije 140 partially compliant Visitor sa Zeletinom 310 partially compliant Kanjon Komarnice 23 partially compliant Ljubišnja 78 not yet compliant Dolina Lima not yet compliant Dolina Ćehotine not yet compliant BiH Raca-Bijeljina 84.4 partially compliant Veliki Stolac 155.7 partially compliant Drina Canyon 94.4 partially compliant Sutjeska 160.52 partially compliant

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Figure 5: Accepted and proposed Emerald sites in the DRB in regards to proposed development scenarios

2.1.6 Expected climate change impacts Climate change in DRB is considered under assumption of the Representative Concentration Pathways (RCP) scenarios on greenhouse gas emissions according to the International Panel on Climate Change (IPCC). To this end, an ensemble of climate simulations from four regional climate models (RCMs) based on the availability of model outputs over DRB. Two IPCC scenarios were considered: RCP 4.5, as a “middle line” and RCP 8.5 as a GHG intensive scenario. Changes in mean annual and seasonal 2 m temperature and precipitation are analysed for two 30-years periods, namely 2011-2040 and 2041-2070, with respect to the reference period, 1961-1990.

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All models under both scenarios project a temperature increase over the entire DRB in all seasons during both considered future periods (Figure 6). The increase in the ensemble median mean annual temperature ranges from 1.1 °C to 1.4 °C under RCP 4.5 and 8.5 respectively in the near future (2011-2040) and from 2.0 °C to 2.7 °C in the distant future (2041-2070) with respect to the reference period 1961-1990. The largest heating is projected for summer season under both scenarios and in both future periods, and also for winter season in distant future under RCP 8.5 (especially in the Republic of Serbia part of DRB). The smallest increase is expected in autumn for near future, and in spring for distant future. Precipitation change in the future relative to the reference period is negative under both scenarios and generally small on the annual scale (Figure 7). The changes in the ensemble median annual precipitation in Montenegro in near future range from -3.8% to -4.5% under two scenarios, while in Bosnia and Herzegovina and Republic of Serbia they are smaller and range from -1.5% to -2.5% in near future under two scenarios. In distant future, the changes in Montenegro for two scenarios range from -5.8% to -9.8% and from -5% to -8% in Bosnia and Herzegovina and Republic of Serbia. However, the seasonal changes are more pronounced with opposite tendencies that cancel each other out on the annual scale. Winter precipitation is expected to increase, while summer precipitation is expected to decrease. Spring precipitation shows small decrease in both periods, while autumn precipitation tends to increase first and then decrease in distant future. The largest projected change is the decrease of about 30% in summer precipitation in distant future.

2011-2040 RCP 4.5 2041-2070 RCP 4.5

2011-2040 RCP 8.5 2041-2070 RCP 8.5

Figure 6: Changes in mean annual temperature in future relative to 1961-1990 under two climate scenarios.

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2011-2040 RCP 4.5 2041-2070 RCP 4.5

2011-2040 RCP 8.5 2041-2070 RCP 8.5

Figure 7: Changes in annual precipitation in future relative to 1961-1990 under two climate scenarios. Uncertainty of the projected temperature and precipitation change is greater for the distant future than for the near future. Summer and spring season have the largest ensemble span for the temperature change, in both periods and both scenarios. Range for the precipitation change is more or less uniform across the seasons, with an exception of summer that has the largest ensemble span. This difference is more pronounced in the second period for both scenarios. The assessment of the climate change impact on water resources is based on the application of a hydrologic model by using daily precipitation and temperature projections from the ensemble of RCMs. The hydrologic simulations are performed for the future time frame 2011-2070 and for the baseline time frame 1961-1990. The changes in the hydrologic regimes of the Drina River, as well as its major tributaries Piva, Tara, Ćehotina, Lim and Uvac, are estimated on the basis of the following indicators: mean annual flow, mean seasonal flows, high annual flow having 10% exceedance probability and low annual flow having 90% exceedance probability. The results have shown that the change in mean annual flow ranging from -12% to +15% is expected in the near future (2011-2041) relative to the baseline period 1961-1990 (Figure 8). The changes are more pronounced in individual seasons and especially in the winter season for which the changes range from +7% to +64%. In the spring season, which is characterised by the greatest flows in DRB, a reduction of up to 22% is expected. The summer flows are reduced according to all simulations, and the reduction is up to - 35%. The changes in the autumn season in the near future range from -19% to +12% in accordance with changes in the climate drivers.

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More significant changes in runoff can be expected in the distant future (2041-2070). The changes on the annual scale range from -18% to +13% for two scenarios relative to the baseline period 1961-1990. The winter runoff is expected to increase by up to 87%, while the spring runoff is expected to decrease by up to 35%. A significant decrease in runoff can be expected during the summer season according to all climate scenarios, ranging from -18% to -49%. During the autumn season, a decrease in runoff is mostly expected by up to 40%, but the projections with two climate inputs from two RCMs also suggest a slight increase. High and low annual flows of 10% and 90% exceedance probabilities, respectively, are indicators of frequency of wet and dry years in the basin’s hydrologic response. Expected changes in these indicators vary with climate data sets used as the input. Low annual flows are expected to change by -9% to +5% and by -15% to +10% in the near and distant future periods, respectively, relative to the baseline period 1961- 1990. High annual flows are expected to change in the range from -7% to +22% and from -21% to 20% in the near and distant future periods, respectively. Changes in the minimum and maximum flows were not analysed because the seasonal time scale was used for this analysis, but these changes are indirectly indicated in the expected changes in mean runoff in individual seasons. The results suggest that the dry spells could occur more frequently during summer and autumn, especially in the distant future when the greatest increase in temperatures accompanied by a considerable decrease in precipitation can be expected. Change in occurrence of flood flows can also be expected meaning that significant high flows could occur more frequently during the winter season. This is a shift compared to the observed series, where the flood flows are characteristic of the spring season as a consequence of snowmelt.

Runoff change (%) relative to 1961-1990 Runoff change (%) relative to 1961-1990 (RCP 4.5) (RCP 8.5) -60 -40 -20 0 20 40 60 -60 -40 -20 0 20 40 60

DJF DJF

MAM MAM

JJA JJA

SON SON

ANN ANN

2011-2040 RCP 4.5 2041-2070 RCP 4.5 2011-2040 RCP 8.5 2041-2070 RCP 8.5

Figure 8: Changes in mean runoff in future relative to 1961-1990 under two climate scenarios.

2.2 Socio-economic characteristics

2.2.1 Natural resources Territory of the DRB is rich in natural resources, which are distributed among the region in a specific manner. Agricultural land dominates in the Lower Drina Basin (Republic of Srpska (BiH) and Republic of Serbia), while the forestland and forests can be found in the Upper Drina Basin. In the area of Upper Drina Basin, agricultural land is less common and mostly consisted of meadows and pastures. There are also

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mineral resources spread over the area of the DRB. The lower parts of the DRB are characterized by significant but still unexploited geothermal water resources. However, natural resources are inadequately planned without a sustainable exploitation: insufficient exploration of mineral resources, inappropriate use from the standpoint of the welfare of the countries and the local government units (water, minerals and forests), unsustainability of the use of agricultural land (reducing the amount and worthiness) and forests (more the cutting than increment). The importance and role of agriculture and forestry stem from natural conditions for its development (agricultural land, forests), but also from the tradition and the fact that the majority of the population of DRB is directly and indirectly economically relied on agriculture and forestry (to a lesser extent). The past period was characterized by insufficient investment in land development, so that significant agricultural areas exposed to floods, erosion, landslides and various forms of pollution. The current trend is that agricultural areas in the DRB are constantly decreasing. Besides, the process of land comminuting reached such a volume that the agricultural production on small plots becomes economically unjustified and uncompetitive. Important natural resource is the gravel from the riverbed of the Drina River which extraction is an important economic activity and can be a source of benefit for local economy. For the adequate use of such a resource, it should be regulated by the state and controlled in coordination with water management authorities. The original purpose of the controlled gravel extraction is to obtain an appropriate capacity of the Drina cross sections, while uncontrolled extraction can affect the bed morphology and lead to channel destabilisation. Unfortunately, the data on the quantities of excavated sediments are unavailable. There is a strong lack of a cooperative management of the gravel extraction in the DRB, especially on the border section of the Drina River. The regulation and the management should integrate the water management, environmental and security components. Furthermore, the Drina River is very important resource for the development of tourism. For now, there are two main touristic manifestations in Middle Drina: “Drina Regatta” and “Drina-Prača New touristic paths”. The Drina Regatta is the oldest event of tourist - recreational character in the Drina River region, which is organized in memory of the ancient tradition of the Drina rafters. The regatta is the most visited event in Western Serbia and central summer event on water that attracts with a variety of amenities tens of thousands of visitors from Serbia and abroad. Rafting Drina is organized by Municipality of in the length of approximately 40 km from Ljubovija town to the village of . In Bosnia and Herzegovina the Tourist Board of the Bosnian-Podrinje Canton Goražde and the municipality of Foča - Ustikolina organize Drina River rafting starting from Ustikolina to Goražde town. Rural areas are very important for the development of tourism and the focus should be on construction of accommodation facilities such as eco-lodge resort, agro-tourism farms, ethno-villages, ski villages, camping and more. Decorating the traditional summer pastures and their placement in the function of tourism, should encourage the development of sport, mountain, hunting and fishing tourism, as well as the development of eco-tourism.

2.2.2 Demography The area of DRB includes parts or the entire territory of 56 local government units (municipalities and cities), in which, according to the last census lives a population of approximately 1,100,000 inhabitants. The administrative boundaries of municipalities and cities include a larger area (22,948 km2) than the DRB area (19,680 km2). The total area of DRB is divided into three main administrative units, so that the participation of Republic of Serbia is 34%, Montenegro 30% and Bosnia and Herzegovina 36%. However, from total population of the DRB in Montenegro live only 14% inhabitants, while in Serbia live 47% and in Bosnia and Herzegovina live 39%. The area of DRB in Montenegro is located in mountainous terrain, which is characterized by low

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population density of 22 inhabitants/km2. The highest population density is in the Republic of Serbia part of DRB, approximately 63 inhabitants/km2. The population density in the Republic of Srpska (BiH) is 51 inhabitants/km2, while in the Federation BiH (BiH) it is 59 inhabitants/km2, in the area covered by DRB. In the period from 1948 to 1991, the population in the DRB increased steadily, but after this period, the number of inhabitants constantly declined until the last Census. "Urbo-oriented" policy in the years after World War II, under the conditions of a command economy, increased the differences in quality of life between urban and rural settlements. The economic collapse of the countries in the 1990s intensified migration, particularly economic migration not only from villages to the cities, but also from towns and smaller cities to the capital cities. Most of these cities during the 60s and 70s of the last century, were the pillars of accelerated industrialization. When the industry extinguished, cities have turned into cities of pensioners. Observing the level of the states in the DRB, highest average age of the population is characteristic for Republic of Serbia (41.9 years). For Bosnia and Herzegovina, it is 40.8 years, while the lowest is in Montenegro (39.2 years). In all three countries, average age of female population is greater than for male population. Population growth rates are negative in all three countries (Republic of Serbia -0.46, Bosnia and Herzegovina -0.11 and Montenegro -0.49). The main problems in DRB are unfavourable demographic structures and distribution of the population. DRB is facing complex demographic problems that manifest by constant reduction in the birth rate and negative population growth, by reducing the number of pupils in primary schools, by processes of de- population, the disappearance of villages, aging population, and emigration of fertile and working population abroad. There is a possibility of a slight recovery of demographic resources, which depends on appropriate economic and social development. Population aging is especially characteristic of rural areas, while the primacy in the reproduction of the population takes place in urban areas.

2.2.3 Cultural heritage and monuments The DRB has been inhabited by early man for many millennia and evidence from charcoal burning can be seen in some of the caves that are interspersed along the Drina River valley. Cultural and historical capital of DRB is heterogeneous, including cultural goods created in a wide range, from prehistoric and ancient to medieval, Ottoman and modern times. They were created, because of its geographical position, by participation in four major civilization of Europe: Mediterranean, Central European, Byzantine and Oriental- Islamic. Cultural heritage in Bosnia and Herzegovina is very important compared to other countries in the basin primarily due to the period of conflict between 1992-1995 where a large number of sacral, secular and monumental sites, have been destroyed or damaged. Some of the institutions in the field of heritage lost their status, budgets, documents and experts. There are 434 protected cultural heritage sites in the DRB (138 in Republic of Serbia, 258 in Bosnia and Herzegovina and 38 in Montenegro). The most important are two UNESCO World Heritage Sites: The Mehmed Pasha Sokolović Bridge in Višegrad in Bosnia and Herzegovina and Djurdjevi stupovi - Monastery of the tracts of St. George in Berane in Montenegro. Considering the municipalities where the HPPs and storages have been planned in the future development of the DRB, there are 46 cultural heritage sites in Republic of Serbia, 35 in Bosnia and Herzegovina and 7 in Montenegro. For now, it is not known if some of them would be directly affected by the construction of the dams and reservoirs. Not only the officially protected cultural heritage could be affected but also a numerous religious objects, urban structures and other sites important for the local population and their cultural and religious feelings. It is also possible that project work may affect accidentally discovered buried or submerged cultural resources.

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Therefore, it is essential to make a social assessment study for each planned HPP and to propose mitigation measures to preserve the cultural heritage of the DRB and to bring benefice to the DRB population.

2.3 Proposed development scenarios Based on the ToR, the outcomes of the IWRM country reports, on the strategic and investments plans and overall in collaboration with stakeholders of the three countries, different development scenarios have been proposed for each country (Tables 3a, 3b and 3c). In general, the following main scenarios have been defined: - “Green Growth” – is the basic case, required by ToR, which have considered developments in accordance with the valid strategic documents related to water resources in each country in relation to environmental and social issues. This scenario not includes construction of the new HPPs but comprises improvements actual water management conditions (flood protection, drought problems, water supply etc.) - "Full HPP Maximization" Scenario – includes all HPPs identified within valid strategic documents, development strategies and other relevant technical documents cited within Inception Report and selected as “relevant” by stakeholders as were presented within IWRM CRs per each country. - “Reduced/Optimized HPP Maximization Scenario” – is defined based on previous one and conclusions derived on Public Consultations – meeting with stakeholders as were presented within corresponding IPF CRs. This scenario includes the HPPs selected from a set of relevant as particularly perspective. All scenarios include extension and development of waste water drainage systems in accordance with the national strategies. In addition, all development scenarios include closing and cleaning of wild municipal dumpsites in riverbanks, as well as sanitation of existing landfills and full implementation of regional solid waste management strategy. Therefore, evaluation of the “Reduced” and “Maximisation” scenarios may be considered as relative in comparison with the “Green Growth” scenario. Table 3a: Structural development scenarios (Bosnia and Herzegovina) Item "Green Growth" "Reduced HPP Maximisation "Scenario "Hydropower Scenario Variant #1 as per Sava Variant #2 over Maximisation" RBMP in BiH (app. 6 longer time frame Scenario years) New dams No new dams Yes Yes Yes have multi- purpose Use Domestic Present and future Present and future Present and future Present and future Water Supply demand is secured demand is secured demand is secured demand is secured Industrial Present demand is Present and future Present and future Present and future Water Supply secured demand is secured demand is secured demand is secured Irrigation Present demand is Present and future Present and future Present and future Supply secured demand is secured demand is secured demand is secured Hydropower No new HPP is 4 in total 7 in total 16 in total developed "Buk Bijela" ("low") "Buk Bijela" ("low") "Buk Bijela" ("low") Existing HPP made HPP, "Foča" ("low") HPP, "Foča" ("low") HPP, "Foča" ("low") more efficient HPP, "Ustikolina" HPP, HPP, "Paunci" HPP, HPP, "Paunci" HPP, and "Mrsovo" HPP "Ustikolina" HPP, "Ustikolina" HPP, "Goražde" HPP, "Goražde" HPP, "Dubravica" HPP and "Rogačica" HPP, "Mrsovo" HPP "Tegare" HPP, "Dubravica" HPP,

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"Kozluk" HPP, "Drina I" HPP, "Drina II" HPP, "Drina III" HPP, "Sutjeska" HPP, "Mrsovo" HPP and "Vikoč (Luke)" HPP. Other Power More green energy Still likely to rely on Still likely to rely on Increased HPP may Supplies options are developed TPP for regularity of TPP for regularity of make it possible to (e.g. wind, solar etc.) energy supply energy supply reduce reliance on TPP Flood Present flood Present and future Present and future Present and future Regulation regulation is secured flood regulation is flood regulation is flood regulation is as long as no new secured secured secured dams are needed Water Quality All planned WWTP are Limited influence on Limited influence on Limited influence on constructed, water quality (increase water quality water quality Municipal wild in sediments) (increase in (increase in dumpsites in sediments) sediments) riverbanks are closed and cleaned up Education for sorting wastes Increase of recycling wastes Air quality Most severe plan for Potential closure of Potential closure of Closure of thermal reduction of emission thermal power plant thermal power plant power plant with of SO2, NOx and with neutral energy with neutral energy neutral energy particles for thermal balance due to new balance due to new balance due to new and combustion HPP. HPP. HPP. plants (implementation of the National emission reduction plan - NERP) Minimum Minimum Minimum Minimum Minimum Environmental environmental flow is environmental flow is environmental flow is environmental flow is Flow guaranteed on the guaranteed guaranteed guaranteed entire basin Tourism Tourism is controlled Moderate influence on Moderate influence Moderate influence in protected areas tourism (recreation on tourism (recreation on tourism (recreation (guided access, no areas are created at areas are created at areas are created at conversion of new dam reservoir new dam reservoir new dam reservoir protected habitats for sites) sites) sites) infrastructure) Climate change Present drought Present and future Present and future Present and future and Drought period is mitigated by drought periods are drought periods are drought periods are mitigation using water storage in mitigated by using mitigated by using mitigated by using existing dam water storage in water storage in water storage in reservoirs existing and new existing and new existing and new reservoirs reservoirs reservoirs

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Table 3b: Structural development scenarios (Montenegro) Assumptions Green Growth Reduced HPP Maximisation Full HPP Maximisation Scenario (Follows Energy Development Strategy (EDS) for MNE) Domestic Water Supply Present and future demand is Present and future demand is Present and future demand is secured secured secured Industrial Water Supply Present demand is secured Present and future demand is Present and future demand is secured secured Irrigation Supply Present demand is secured Present and future demand is Present and future demand is secured secured Hydropower No new HPP is developed Reduced HPP Maximization Full HPP Maximization Scenario Water fluctuation Operation of Scenario shall include the shall include the following HPPs: Piva dam is adapted to mitigate following HPPs: "Komarnica" "Komarnica" HPP, "Otilovići" the downstream water HPP, "Otilovići" SHPP and SHPP, "Kruševo" HPP, "Lukin fluctuation "Kruševo" HPP (only the HPPs Vir" HPP and "Andrijevica" HPP from the Strategy of Energy ("Gradac" HPP and "Mekote" Sector Development are to be HPP will not be considered due analyzed). to relative vicinity of the state border with BiH and the "Vikoč" HPP). Other Power Supplies More green energy options are As per EDS including “Pljevlja II” As per EDS because of extra developed (e.g. wind, solar etc.) TPP and “Maoče” TPP HPPs Flood Regulation Present flood regulation is Present and future flood Present and future flood secured as long as no new dams regulation is secured regulation is secured are needed Water Quality All planned WWTP are Limited influence on water Limited influence on water constructed, in particular in quality (sediments) quality (sediments) Pljevlja. Municipal wild dumpsites in riverbanks are closed and clean up The industrial dumpsite of Gradac is adapted to sanitary criteria Minimum Environmental Minimum environmental flow is Minimum environmental flow is Minimum environmental flow is Flow guaranteed for each water guaranteed guaranteed intake Tourism Tourism is controlled in Moderate influence on tourism Moderate influence on tourism protected areas (guided access, (recreation areas) (recreation areas) no conversion of protected habitats for infrastructure) Drought mitigation Present drought period is Present and future drought Present and future drought mitigated by using water periods are mitigated by using periods are mitigated by using storage in dam reservoirs water storage in dam reservoirs water storage in dam reservoirs

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Table 3c: Structural development scenarios (Republic of Serbia)

Assumptions Green Growth Reduced/Optimized HPP "Full HPP Maximisation" Scenario Maximization Scenario Domestic Water Supply Present and future Present and future demand Present and future demand is demand is secured is secured secured Industrial Water Supply Present demand is Present and future demand Present and future demand is secured is secured secured Irrigation Supply Present demand is Present and future demand Present and future demand is secured is secured secured Hydropower No new HPP is 6 in total 10 in total developed (4 on Drina) (7 on Drina) Existing HPP made “Rogačica” HPP, "Tegare" Rogačica" HPP, "Tegare" HPP, more efficient HPP, "Dubravica" HPP, "Dubravica" HPP, “Kozluk" HPP, “Kozluk" HPP, "Drina I" HPP, "Drina II" HPP, (2 on Lim) "Drina III" HPP, " “Brodarevo I” HPP, and (3 on Lim) “Rekovići” SHPP “Brodarevo I” HPP, “Brodarevo II” (1 PSHPP – Lim and Uvac HPP and “Rekovići” SHPP Rivers) (1 PSHPP – Lim and Uvac Rivers) Other Power Supplies More green energy Still likely to rely on TPP for Increase to reduce reliance on TPP options are developed regularity of energy supply (e.g. wind, solar etc.) Flood Regulation Present flood Present and future flood Present and future flood regulation regulation is secured as regulation is secured is secured long as no new dams are needed Water Quality All planned WWTP are Limited influence on water Limited influence on water quality constructed, quality (sediments) (increase in sediments) Municipal wild dumpsites in riverbanks are closed and cleaned up Minimum Minimum Minimum environmental Minimum environmental flow is Environmental Flow environmental flow is flow is guaranteed guaranteed guaranteed for each water intake Tourism Tourism is controlled in Moderate influence on Moderate influence on tourism protected areas tourism (recreation areas) (recreation areas are created at (guided access, no new dam reservoir sites) conversion of protected habitats for infrastructure) Climate change and Present drought period Present and future drought Present and future drought periods Drought mitigation is mitigated by using periods are mitigated by are mitigated by using water water storage in using water storage in dam storage in existing and new existing dam reservoirs reservoirs reservoirs

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For the selection of the optimal scenario per each country, the VIKOR method of multi-criteria compromise ranking was used. VIKOR is the method that is used to solve optimization tasks with several heterogeneous and conflicting criteria. Finding a compromise solution included the following activities: study of the system and generation of scenarios, definition of criteria, evaluation of the proposed scenarios and analysis of the preferred stability. The generation of scenarios was based on the main objective and purpose of the system, which is the same for all scenarios; only the values of some parameters were changing. The evaluation of the proposed scenarios was made according to a matrix of criteria and indicators and their relative weights. This matrix is shown in Table 4.

Table 4: Matrix of the criteria and indicators and their relative weight CRITERIA WEIGHT OF INDICATORS WEIGHT OF INDICATORS CRITERIA Levelized cost of electricity (LCOE) / 0.3 Dynamic prime cost (DPC)

Dynamic generation cost of water 0.2 storage capacity Environmental impact 0.3 Geology and soils 0.02 Climate 0.03 Air quality 0.03 Hydrology 0.09 Hydraulic 0.09 Surface water quality 0.07 Ground water quality 0.07 Terrestrial vegetation 0.05 and habitats Migration corridors 0.05 Terrestrial fauna 0.05 Aquatic ecosystems 0.14 Alluvial ecosystems 0.12 Conservation areas 0.16 Landscape 0.03 Social-economic impact 0.2 Population 0.50 Agriculture 0.10 Forestry 0.10 Fishing/Hunting 0.05 Infrastructure 0.05 Energy sources/Use 0.04 Health 0.04 Education 0.03 Ethnicity/Culture 0.01 Visual aspects 0.04 Cultural 0.04 Heritage/Tourism

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Methods for technical and preferential definition of relative weights were applied for determining weights of the criteria and indicators. The evaluation of the proposed scenarios was done in accordance with the territorial affiliation, for Republic of Serbia, Montenegro and Bosnia and Herzegovina, and in accordance with a division into options CONSTRUCTION and OPERATION. For the territory of Serbia, two scenarios were evaluated, in Multi Criteria Analyses (MCA) marked as VS2 and VS3 (reduced/optimized HPP maximization, resp. full maximization), in accordance with the options CONSTRUCTION and OPERATION. In the OPERATION option, the compromise solution for final decision is the scenario VS2, with an advantage of 100% compared to the scenario VS3. The result in the option CONSTRUCTION is same. For the territory of Bosnia and Herzegovina three proposed scenarios were evaluated, in MCA marked as VS2A, VS2B and VS3 (reduced/optimized HPP maximization (4 resp. 7 new HPPs), resp. full maximization). According to the option OPERATION, a compromise solution for the final decision is the set of scenarios VS2B and VS2A, where VS2A scenario has an advantage of 10.4% compared to VS2B. The Compromise and final decision for option CONSTRUCTION is VS2A with an advantage of 33.4% compared to the scenario VS2B. For the territory of Montenegro, two scenarios were evaluated: in MCA marked as VS2 and VS3 (reduced/optimized HPP maximization, resp. full maximization). For both option CONSTRUCTION OPERATION, the compromise solution for final decision is the VS2 scenario. The VS2 scenario shows an advantage of 100%, compared to the scenario VS3. The optimal scenarios selected per country, are the base for forming the integral development scenario for the whole Drina River Basin.

2.3.1 Republic of Serbia Within the Drina River catchment area located on the Republic of Serbia territory, the following power plants are presently in operation: “Zvornik”, “Bajina Bašta” (HPP and PSHPP), “Bistrica”, “Kokin Brod”, “Uvac” and “Potpeć”. The “Zvornik” HPP and “Bajina Bašta” HPP are located along the boundary line between Republic of Serbia and Bosnia and Herzegovina (at the territory of Republic of Srpska); they are managed by EPS. The total installed capacity of these existing HPPs is 675 MW (PSHPP capacity: 614 MW). The total annual energy production of HPPs and PSHPP is 4,152 GWh. The main characteristics of existing HPPs on territory DRB within Republic of Serbia are presented in the table below.

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Table 5: The main characteristics HPPs in operation located in Republic of Serbia or managed by EPS

HPP “Zvornik” "Bajina "Bajina "Bistrica"** "Kokin "Uvac" "Potpeć". Bašta" Bašta" Brod" HPP PSHPP* River Drina Drina Beli Rzav Uvac Uvac Uvac Lim Chainage km 93+100 km km 62+000 km Km Km 199+500 54+000 72+075 53+600

3 Qav (m /s) 369 349 14.4 13.9 11.5 77.6 Dam Concrete Concrete Rock fill / Rock fill / Rock fill / Earth fill Concrete type/construction gravity / 42 / 91 130 42 82 / 110 gravity / height (m) 46 Reservoir volume 47.43/21.32 340 / 218 170 / 153 7.6 / 4.1 250/209 200/160 27.5 / total/active (mil. 19.8 m3) Plant type non- non- PSHPP diversion non- diversion non- diversion diversion diversion diversion Inst. capacity 96 368 614 102.6 21.4 36 51 (MW) Mean annual 500 1650 1200 370 60 72 300 electricity generation (GWh) * Lazići Dam and reservoir ** Radoinja Dam and reservoir

Projects for the construction of ten new hydropower schemes have already been developed. A multi- criteria analysis aiming at making the best selection among these projects was conducted with the stakeholders and it was concluded that a package of six projects would optimally satisfy the imposed criteria (Table 6). These six projects are: - "Rogačica" HPP 113 MW Drina River Trans-boundary HPP - "Tegare" HPP 121 MW Drina River Trans-boundary HPP - "Dubravica" HPP 87 MW Drina River Trans-boundary HPP - "Kozluk" HPP 88 MW Drina River Trans-boundary HPP - "Brodarevo I" HPP 26 MW Lim River - "Rekovići" SHPP 7.2 MW Lim River

Generally, pumped-storage HPPs (PSHPPs) are not effective in water-management and improvement of, water balance and low discharges. They are not energy sources, but sinks (typical round-trip efficiency of the PSHPP operation is approximately 80%). Their possible role in flood protection is very uncertain, as their pumping capacity is usually drastically lower than the incoming flood discharges. Improvement of low discharges using water from PSHPP's upper reservoir is financially prohibitive in comparison with usually dedicated reservoirs along rivers. Therefore, it makes little sense to compare PSHPPs and HPPs using criteria adopted in the present study. Consequently, no PSHPP was analysed in this report. In particular, the "Bistrica" PSHPP was not included

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into development scenarios for Republic of Serbia. Since this PSHPP was included into various planning and strategic documents in power in Republic of Serbia, as well into the strategic documents developed by the Electric Power Industry of Serbia, the Consultant recommends the inclusion of this project into further projects that should follow the present one. The large active volume of existing reservoirs provides conditions for a very flexible management of "Uvac" HPP, "Kokin Brod" HPP and "Bistrica" HPP. These HPPs can satisfy almost of all needs of the system, such as regular coverage of the consumption of energy and power, all forms of reserves in the system (including the “cold” reserve), power regulation etc. The smallest possibility of regulation is provided by the "Zvornik" reservoir, since it is already half-filled with sediment. This storage can also play only a limited role in flood control. The flexibility of load variation (i.e. the regulation capacity) of the "Bistrica" HPP is limited by its long diversion system. However, under present conditions it satisfies the actual needs. The selected optimal development scenario can satisfy the electricity production and consumption projections defined in the Energy Development Strategy of the Republic of Serbia with minimal environmental and optimal socio-economic impact. It is also estimated that this scenario is in line with other strategic documents of the Republic of Serbia.

Comparing the main characteristics of the proposed optimal scenarios for Republic of Serbia and Bosnia and Herzegovina, it is important to note that four of the six selected HPPs ("Dubravica" HPP, "Tegare" HPP, "Rogačica" HPP and "Kozluk" HPP) are located along the border with Bosnia and Herzegovina (at the territory of Republic of Srpska).

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Table 6: The main characteristics of HPPs proposed by optimal scenario in Republic of Serbia

HPP "Rogačica" "Tegare" "Dubravica" "Kozluk" "Brodarevo "Rekovići" I" River Drina – Drina – Drina – Drina – Lim Lim Middle part Middle part Middle part Lower part Chainage km 173+250 km km 118+700 km 60+200 km 101+887 148+750

3 Qav (m /s) 330.2 333.5 340.4 369.9 74.4 87.63 Dam Concrete Concrete Concrete Concrete Concrete Concrete type/construction gravity/ 42 gravity / gravity / 39 gravity / 38 gravity / gravity / height (m) 44.3 38.8 14.7 Reservoir volume Negligible Negligible Negligible 49.8/15.0 3.99/1.02 0.5/0.5 total/active (mil. m3) Plant type non- non- non- non- non- non- diversion diversion diversion diversion diversion diversion Inst. capacity 113 121 87.2 88.5 26.10 7.18 (MW) Mean annual 420 452 333 394.69 101 34.46 electricity generation (GWh) Investment costs 217 253 281 290 75 20 (mil. EUR)* * Note: Estimated based on methodology described in the corresponding IWRM Report.

2.3.2 Montenegro On the territory of Montenegro currently there are several hydropower plants in operation, but only "Piva" HPP is located in the DRB. This HPP and its dam and reservoir present the largest structure that was built on the Piva River. With its generous useful volume, the "Piva" reservoir provides favourable conditions for important discharge regulation. The "Piva" HPP operates in the "peak-load" mode within the regional hydropower system. Its installed capacity is 342 MW and its annual energy production 800 GWh.

Within the Drina River catchment area the "Otilovići" dam is in operation, its main purpose being water supply. The use of surplus water and environmental discharges for energy production in some future small HPP has been considered.

The main characteristics of existing HPP and dam on territory DRB within Montenegro are presented in the table below.

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Table 7: The main characteristics HPP in operation and existing dam located in Montenegro

HPP “Piva” "Otilovići " Dam River Piva Ćehotina Chainage km 10+000

3 Qav (m /s) 74.4 4.68 Dam type/construction Arch concrete / 220 Arch concrete / 91 height (m) Reservoir volume 880 / 790 18/13 total/active (mil. m3) Plant type underground - Inst. capacity (MW) 342 - Mean annual electricity 800 - generation (GWh)

Projects for the construction of eight new hydropower schemes have already been developed. A multi- criteria analysis aiming at making the best selection among these projects was conducted with the stakeholders and it was concluded that a package of three projects would optimally satisfy the imposed criteria (Table 8). These three projects are: - "Komarnica" HPP 170 MW Piva/Komarnica River - "Otilovići" SHPP 3.0 MW Ćehotina River - "Kruševo" HPP 120 MW Piva River The selected optimal development scenario can satisfy the electricity production and consumption projections defined in the Energy Development Strategy of Montenegro with minimal environmental and optimal socio-economic impact. It is also estimated that this scenario is in line with other strategic documents of Montenegro.

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Table 8: The main characteristics of HPPs proposed by optimal scenario for Montenegro

HPP "Komarnica" "Otilovići" "Kruševo" River Piva/Komarnica Ćehotina Piva Chainage km 50+000 (Piva)

3 Qav (m /s) 21.6 4.15 75.8 Dam type/construction height Arch concrete / 176 Arch concrete Rock-fill - concrete (m) (existing) gravity / 68 Reservoir volume total/active 176 59 25.4/18 (mil. m3) Plant type non-diversion Diversion (105m long) non-diversion Inst. capacity (MW) 170 2.961 120 Mean annual electricity 220.5 11.73 267.4 generation (GWh) Investment costs 322 4 166 (mil. EUR)* *Note: Estimated based on methodology described in corresponding IWRM Report.

2.3.3 Bosnia and Herzegovina On the territory of Bosnia and Herzegovina, three hydropower plants are in operation: "Zvornik" HPP, "Bajina Bašta" HPP and "Višegrad" HPP. The first two are located along the boundary between Republic of Serbia and Bosnia and Herzegovina (at the territory of Republic of Srpska) and are managed by EPS. Only "Višegrad" HPP is completely located in Bosnia and Herzegovina (at the territory of Republic of Srpska) and is managed by ERS – the "Višegrad" HPP. Its installed capacity is 345 MW and its annual energy production is 1,010 GWh. The main characteristics of "Višegrad" HPP are presented in the next table. The characteristics of "Zvornik" HPP and "Bajina Bašta" HPP are presented in Table 9.

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Table 9: The main characteristics of the "Višegrad" HPP

HPP “Višegrad” River Drina Chainage km 245+000

3 Qav (m /s) 342 Dam type/construction height (m) Concrete gravity/ 79.5 Reservoir volume total/active (mil. 161/105 m3) Plant type Non diversion Inst. capacity (MW) 333 Mean annual electricity generation 1010 (GWh)

Projects for the construction of sixteen new hydropower schemes have already been developed. A multi- criteria analysis aiming at making the best selection among these projects was conducted with the stakeholders and it was concluded that a package of four projects would optimally satisfy the imposed criteria (Table 10). These four projects are: - "Buk Bijela" ("low") HPP 94 MW Drina River - "Foča" ("low") HPP 44 MW Drina River - "Ustikolina" HPP 60 MW Drina River - "Mrsovo" HPP 37 MW Lim River Under construction "Buk Bijela" HPP is the most important and attractive hydropower plant along the upper part of the Drina River course, with a long history. The "Buk Bijela" profile (12 km upstream of Foča) controls the basin area of approximately 4.000 km2 (20% of the total DRB area). "Buk Bijela" dam height was chosen so as to not disturb the natural flow regime at the "Šćepan Polje" profile under adverse conditions. According to reasons cited in Sub-Section 2.3.1 and similarly to the "Bistrica" PSHPP, "Buk Bijela" PSHPP was initially not included into development scenarios. Since the "Buk Bijela" PSHPP was in the meantime included into the Spatial Plan in force in Republic of Srpska (BiH), as well into the strategic plans developed by the Electric Power Industry of Republic of Srpska (BiH), the Consultant recommends the inclusion of this project into further projects that should follow the present one. When the main characteristics of the proposed optimal scenarios for Republic of Serbia and Bosnia and Herzegovina are compared, it is important to note that four ("Dubravica" HPP, "Tegare" HPP, "Rogačica" HPP and “Kozluk” HPP) of the six HPPs included in the selected development scenario for the Republic of Serbia are located along its border with Bosnia and Herzegovina (at the territory of Republic of Srpska). None of these HPPs is included in the most favourable-optimal development scenario for Bosnia and Herzegovina, but they are included within valid spatial planning documents in Republic of Serbia. The Consultant believes that the most reasonable solution for construction of these HPPs would be a joint effort of Investors from both countries, as any "asymmetric" construction could lead to a number of problems.

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Table 10: The main characteristics of HPPs proposed by the optimal scenario in Bosnia and Herzegovina

HPP "Buk Bijela" "Foča" ("low") "Ustikolina" 'Mrsovo" (" low”) River Drina Drina Drina Lim Chainage km 334+550 km 324+678 km 305+285 km 17+850

3 Qav (m /s) 162.37 178 204.70 112.5 Dam type/ construction Concrete gravity / Concrete gravity Concrete gravity Concrete gravity / height (m) 36 / 21 / 19 28 Reservoir volume 15.7/11 6.7/4.6 8.23/2.51 8.9/7.7 total/active (mil. m3) Plant type non-diversion non-diversion non-diversion non-diversion Inst. capacity (MW) 93.5 44.15 60.48 36.80 Mean annual electricity 375.33 199.24 235.29 141 generation (GWh) Investment costs 195.50** 119.09** 109.00* 94* (mil. EUR)

*Notes: * Estimated based on methodology described in the corresponding IWRM Report ** Taken from existing technical documentation on request of EPRS

2.3.4 Proposed integral development scenario for Drina River Basin The optimal development scenarios for each of three countries have been adopted based on results obtained by multi-criteria analysis and are the base for definition of the integral basin development scenario. Due to the fact that there is no incompatibility between the HPPs included in optimal scenarios for individual countries with the projects in other countries, the proposed integral development scenario for the whole basin includes the following projects: • Drina River "Buk Bijela" ("low") HPP, "Foča" ("low") HPP, "Ustikolina" HPP, "Rogačica" HPP, "Tegare" HPP ", Dubravica" HPP and"Kozluk" HPP, • Lim River "Brodarevo I" HPP, "Rekovići" SHPP and"Mrsovo" HPP, • Piva/Komarnica River "Komarnica" HPP, • Ćehotina River "Otilovići" SHPP • Piva River "Kruševo" HPP. The total installed capacity of the development scenario is 970.2 MW, with an estimated mean annual electricity generation of 3,186 GWh and estimated total investment costs approximating 2,146 million Euros. Except “Otilovići” SHPP, all HPPs belong to the non-diversion HPP type.

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The "Dubravica" HPP, "Tegare" HPP, "Rogačica" HPP and "Kozluk" HPP) are located along the border between Republic of Serbia and the Republic of Srpska (BiH). Although the cited HPPs are not included within the optimal development scenario for Bosnia and Herzegovina, their position in the proposed integral scenario for the whole basin is undisputed by the fact that construction of actual HPPs has been foreseen in strategic planning documents of Republic of Srpska (BiH). Transboundary issues should be solved by permanent communications, coordination, exchange information etc. between the relevant institutions/representatives from both river sides.

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Figure 9: Proposed development scenario for DRB (green – HPPs proposed by optimal scenario for Montenegro, pink – HPPs proposed by optimal scenario for Bosnia and Herzegovina and yellow – HPPs proposed by optimal scenario in Republic of Serbia)

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3 Water management

3.1 Protection against adverse water effects

3.1.1 Flood control

Current flood hazard and risk assessment indicate that the Drina River Basin is endangered by: • Flood waves that propagate along the river valleys of the Drina River and its tributaries; • Urban flooding within the flood-protected (interior) zones originating from coinciding occurrence of heavy storms and high groundwater levels; • Flooding of the interior areas due to insufficient drainage; • Migration of the main Drina channel toward East in its lower course downstream of the Jadar River mouth due to lack of the river engineering and bank stabilisation works; • A lack of riverbank stabilisation, especially in urban areas, where river training works should be exercised for safety reasons, as well as for urban planning purposes; • A torrential river flow and accompanying erosion processes, which eventually result in aggradation of a riverbed and consequent increase in water levels, reduced discharge capacities that increase the probability of main-channel overflow in minor tributaries at greater discharges; • Uncontrolled dredging of sand and gravel that alters riverbed morphology and might also trigger flow destabilisation. Flood prone areas in the upper DRB include urban areas along the main Drina River course (towns of Foča, Ustikolina, Goražde, Donji Modran, Ravan and Mrđelići) and left tributaries (Sokolac, Rogatica, Pale-Prača, Hrenovci, Čajniče, Rudo and Miljevina), as well as traffic roads along the tributaries. The town of Prijepolje by the Lim River is also flood prone. In the middle DRB, flood prone areas include: municipality by the Likodra River, Osečina municipality by the Jadar River, the town of Loznica by Štira and Jadar Rivers, the town of Bajina Bašta by the Drina River, the municipality of Ljubovija by Ljuboviđa and Drina Rivers, municipality by the Drina River, and towns of and by Drina River's left tributaries. The largest flood prone areas are in lower DRB and include arable lands of Semberija on the left Drina bank and Mačva on the right bank. They are endangered both from external and internal flooding. The Sava and Drina Rivers are potential origin of external flooding, while the internal flooding is caused by high groundwater table. Frequent external flooding on the left Drina bank is due to the absence of flood protection infrastructure along this river bank and a low conveyance capacity of the Drina main channel (1,100 m3/s) caused by shallow, braiding and meandering channel. Such a morphology results from great discharge variability, geological composition of river bed and banks, regimes of bed and suspended load and unscheduled dredging of sand and gravel from the main channel and/or banks. Landslides usually accompany the flooding during/after heavy rains in mountainous regions, sometimes causing damage to dwellings and infrastructure or triggering mud spills from old mine tailings and mines with eventual ecological consequences on farming lands. The effects of three proposed development scenarios in the DRB (“Green Growth”, “Reduced/Optimised HPP Maximisation” and “Full HPP Maximisation”) on flood hazards and risks are discussed in view of estimated changes in flood flows along the Drina River under the impact of climate change. The upper and middle DRB. For the Green Growth scenario (no new reservoirs in the basin), the flood risk is not expected to increase due to climate change, but the existing risk can be reduced if coordinated operational plans of the upstream reservoirs are made as well as the plans for informing the downstream

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users on the operational decisions during floods. Under the “Reduced/Optimised HPP Maximisation” scenario, construction of three or five concrete gravity dams (scenario option 1 or option 2) would introduce high risk of potential dam-break induced flows in towns downstream of the dams (Foča, Goražde and Ustikolina). Therefore, inundation and flood risk maps, and emergency plans must be a part of the design for every dam. The estimated flood flows with 1% probability of exceedance (i.e. 100-year floods) at this location are smaller than the evacuation capacities of dams, and therefore the least favourable option is the conveyance of the flood wave through the evacuation structures without the flood wave transformation in the reservoir. In this case, the downstream flood risk should be controlled by reconstructing existing revetments and embankments and/or construction of new ones. Reconstruction of the storm sewer systems should be considered to avoid flooding of urban and interior areas. The same conclusions and recommendations hold for the “Full HPP Maximisation” scenario. In all scenarios for the upper Drina River with a cascade of reservoirs, the risk level downstream of each dam in the cascade would increase unless an integrated river basin management was applied, and particularly unless the consensus between the water and hydropower sectors of all three countries is achieved about the reservoir management during floods. The lower DRB. Under the “Green Growth” scenario, the existing flood protection system along the lower Drina course is not fully adequate and can have its full protection effect against the 1% flood only under a series of preconditions. Structural preconditions include reconstruction of the existing system to meet design criteria, enlargement of the system in areas where it does not already exist, regular infrastructure maintenance, and systematic protection of banks from erosion. Non-structural preconditions include improved management practice related to management of all upstream reservoirs during high-water periods to reduce risk of downstream flooding, as well as establishment of the strict sediment management practices, especially in the lower Drina course. Construction of the “Kozluk” concrete gravity dam in the “Reduced/Optimised HPP Maximisation” scenario would increase the risk of internal flooding on the left bank due to permanent rise of groundwater table caused by the reservoir operating levels. To reduce this risk, a complementary drainage and pumping stations system in the valley should be built. Additionally, preparation of inundation and flood risk maps is recommended for a selected number of embankment-breach scenarios. Since the total evacuation capacity of the “Kozluk” reservoir (8,000 m3/s) highly exceeds 1% flood estimated both from the observed records and two climate change scenarios, the downstream risk level would increase unless an integrated river basin management is applied, and particularly unless the consensus between the water and hydropower sectors is achieved. Under the “Full HPP Maximisation” scenario, risk of external flooding would be decreased, but the operational reservoir levels, which would be well above the ground level on one or both river banks would foster the risk of internal flooding due to permanent rise of groundwater table in Semberija and Mačva regions. To control/reduce such a risk, it is highly recommended that: 1) operational plans for the entire reservoir cascade during floods are synchronised, 2) the consensus between water and hydropower sectors on drawdown plans from reservoirs during floods is achieved, and 3) both Mačva and Semberija regions are divided into polders that would help localise the possible damage to the area close to the dike-breach. It must also be taken into account that it is necessary to implement a more restrictive policy regarding land use planning. On no account should housing and the procedures for issuing construction permits be allowed when the plans show such buildings to be in flood prone areas.

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3.1.2 Droughts The high environmental value of the DRB could be endangered during drought periods. Primarily the small tributaries of the Drina River can be most affected during these drought events. Indeed, during extreme droughts, the main effects on environment could be: • Endangered fish population (reduction of the population) by drying complete section of small tributaries, putting pressure on the food resources, increasing the water temperature, increasing the concentration of pollutants and degrading the water quality. • Endangered terrestrial fauna habitats by destruction due to increase of forest fires. This situation happened during extreme droughts in 2012 and 2013 when many kilometres of salmonid streams were left without water. The Drina River Basin is generally abundant with water but the droughts can occur. The increased climate variability has been observed since 1981 in all seasons. For example, a trend of rapid changes from extremely hot or cold periods, usually lasting between 5 and 20 days, and periods of intense rainfall, has been observed. Drought has also been more frequent and more intense over the past ten years: since 2000, there were five very dry years (2000, 2003, 2007, 2011 and 2012). Due to the limited irrigation infrastructure in lower Drina River Basin (e.g. only 0.65% of arable land in Republic of Srpska (BiH) is irrigated), the year 2012 was the fourth successive year in which agriculture suffered significant losses due to droughts. The damages caused by drought and high temperatures during the summer of 2012 in BiH/RS were estimated at about USD 1 billion in lost agricultural production with almost 70% of vegetables and maize fields destroyed. The hydrologic simulations with the ensemble of climate projections under two climate change scenarios for 2011-2070 have shown that significant reduction in the river discharge during summer season can be expected in the future. Having in mind that the low flows occur in late summer and early autumn, such a result gives rise to a concern about the effects of the droughts in DRB in the future. The results of the water balance simulations with the Drina water management model in WEAP1 for two climate change scenarios (based on the ensemble of hydrologic projections for 2011-2070) suggest that the coverage of the required environmental flows at head parts of the basin where no reservoirs exist would generally decrease in time with decreasing runoff under both climate scenarios. On the other hand, the flow requirements below the existing reservoirs and HPPs (“Green Growth” scenario) can be fully satisfied from the reservoirs at any time in future. The flow requirements below the planned reservoirs and HPPs under Reduced/Optimised Hydropower scenario can be fully satisfied everywhere except for the Lim River. Under the “Full Hydropower Maximisation” scenario, four planned facilities on the Lim River ("Andrijevica" HPP, "Lukin Vir" HPP, "Brodarevo 1" HPP and "Brodarevo 2" HPP) can meet the environmental flow requirements by discharging water from the reservoirs with coverage of about 99%. The analysis of the effects of specifying greater environmental flow requirements (suggested by stakeholders) on water balance has shown that, under the same hydrologic input, the higher flow requirements along the Drina main course can be fully satisfied (with 100% coverage). Increased flow requirements are not reflected upon hydroelectricity production or upon coverage of municipal, industrial and agricultural water supply. In conclusion, the guaranteed release of the environmental flow for the development scenarios is a key issue to mitigate the impacts on the aquatic ecosystem during drought events. For small tributaries without planned reservoir, the presence in situ and observations of fishing guards are essential to restock the fish population into an appropriate river before the drying of the watercourse.

1 Detailed description of the Drina water management model, developed using the WEAP software, and the simulation results are the subject of the separate report.

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3.2 Use of water

3.2.1 Hydropower In a general way, the management of HPPs depends on the actual reservoir capacity, the hydrological situation, the production tool availability (efficiency, outages, maintenance, etc.) and the situation in the power system of the country and the region. The reservoirs are structures that can enable the largest and the most flexible human influence on the water regime of a basin. The relative size of a reservoir is the ratio of the reservoir useful storage volume (Vus) to the average annual inflow into the reservoir (Vavg), as shown in the formula below: V   us V avg This ratio is usually named the regulation coefficient (β). Engineering experience indicates that large reservoirs (with seasonal regulation) are those with regulation coefficients above approximately 0.08, i.e. a reservoir useful storage volume higher than 8% of the average annual inflow into it. The flow regulation status of the existing reservoirs is presented in Table 11. Table 11: The flow regulation status of the existing reservoirs Rank Reservoir Country Useful Volume Average Regulation 3 No Vus (Mm ) Annual Inflow Coefficient Qavg (m3/s) β=Vus/Vavg 1 "Kokin Brod" HPP Serbia 209 13.9 0.477 2 "Uvac "("Sjenica") HPP Serbia 160 11.5 0.441 3 "Piva" HPP, Montenegro 790 74.4 0.337 4 "Otilovići" SHPP Montenegro 13 4.68 0.088 5 "Bajina Bašta" HPP Serbia/BiH 218 349 0.020 6 "Višegrad" HPP BiH 101 342 0.009 7 "Radoinja-Bistrica" HPP Serbia 4.1 14.4 0.009 8 "Potpeć" HPP Serbia 19.8 77.6 0.008 9 "Zvornik" HPP Serbia/BiH 21.3 369 0.002

Based on obtained reservoir flow regulation coefficients, the flow regulation status of the existing reservoirs is as follows: • "Kokin Brod" HPP and "Uvac" HPP – weekly and seasonal regulation. The large active volumes of these reservoirs provide conditions for very flexible management, flood retention and mitigation and releases of environmental flow in all hydrological regimes. Even in extremely dry periods, they can satisfy almost of all needs of the energy system, such as regular coverage of the consumption of energy and power, all forms of reserves in the system, power regulation etc. • "Piva" HPP reservoir – seasonal regulation. It can achieve positive retention of flood and can satisfy environmental flow requirements in all hydrological regimes. The regime of the entire Drina River is considerably influenced by the operation of the "Piva" storage and HPP. Until 2014, this plant operated within the electricity transmission system of Serbia and worked according to its rules. Since January 2014, "Piva" HPP operates in accordance with the demands and rules of the power system of Montenegro. Due to a lack of retention reservoir downstream ("demodulation basin"), during the peak-load operation of “Piva” HPP was occasionally released uncontrolled flow downstream, which caused large fluctuations of the water level.

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• "Zvornik" HPP and "Potpeć" HPP reservoirs – daily regulation. The smallest possibility of regulation is provided by the "Zvornik" storage, since its reservoir is filled with sediment (almost 50% of the reservoir volume). This storage can also play only a limited role in floods and droughts control. • "Bajina Bašta" HPP reservoir – daily and weekly regulation. It can achieve a positive retention on flood waves. • “Bistrica” HPP and “Višegrad” HPP reservoirs – daily and weekly regulation. • "Potpeć" HPP, "Bajina Bašta" HPP and "Zvornik" HPP may participate in the regulation of the power system. • Existing reservoir "Otilovići" provides seasonal regulation. In the present state, this reservoir is not equipped with an HPP; it can satisfy requirements for water supply of the "Pljevlja" TPP, wood industry and water supply to part of the population of the Pljevlja city. An environmental flow of 0.8 m3/s is being constantly released from the reservoir. Most plants proposed as the optimal ones according to the recommended scenarios are non-diversion type run-of-river plants that have no impact on river water management. Based on their reservoir volume summarized in the Table 12, all proposed new HPPs, except the "Komarnica" HPP, do not have a capacity for significant flood retention. Table 12: The flow regulation status of the new reservoirs proposed within selected optimal scenarios for each country separately – integral developments scenario for Drina River Basin Reservoir Country Useful Average Regulation Volume Annual Inflow Coefficient 3 3 Vus (Mm ) Qavg (m /s) β=Vus/Vavg "Kozluk" HPP Serbia/BiH 15 365.4 0.0013 "Brodarevo I" HPP Serbia 1.02 69.3 0.0005 "Rekovići" SHPP Serbia 0.5 91.9 0.0002 "Rogačica" HPP Serbia/BiH 0 388.3 0.0000 "Tegare" HPP Serbia/BiH 0 341.7 0.0000 "Dubravica"” HPP Serbia/BiH 0 347.7 0.0000 "Komarnica" HPP Montenegro 160 20.1 0.2524 "Otilovići" HPP + SHPP Montenegro 13 4.68 0.0881 "Kruševo" HPP Montenegro 18 71 0.0080 "Buk Bijela" ("low") HPP BiH 11 158.4 0.0022 "Mrsovo" HPP BiH 7.7 122.9 0.0020 "Foča" ("low") HPP BiH 4.6 173.1 0.0008 "Ustikolina" HPP BiH 2.51 202.9 0.0004

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Based on the obtained reservoir flow regulation coefficients, the flow regulation status of the proposed new reservoirs is as follows: • "Komarnica" HPP - seasonal water regulation. • "Kruševo" HPP, "Buk Bijela" ("low") HPP and "Foča" ("low") HPP reservoirs can provide daily or weekly regulation, but they may also participate in the regulation of the water released from the "Piva" HPP reservoir. Their role may be significant in the mitigation of flood waves released from the "Piva" HPP reservoir and reduction of water elevation oscillations along to downstream river sections. • Although the other new reservoirs do not have volumes sufficient for significant flow regulation and flood retention, they help in meeting requirements regarding environmental flow released even during dry periods. In order to avoid negative effects caused by unfavourable operation of existing reservoirs (especially the "Piva" reservoir), in the future it will be necessary to pay attention to developing management strategies for all existing reservoirs. Also should as soon as possible be considered the erection of new structures along the upper part of the Drina River watercourse, between "Piva" and "Višegrad" reservoirs.

3.2.2 Irrigation In Montenegro irrigation demand is less important and the principal focus lies on quality products rather than on large productions, and this is reflected by the number of organic food producers which are increasing year on year. Through its access to EU pre-accession funds, Montenegro can promote organic production, expand good farming practices and improve the market for organic and local products in eco touristic areas. Agriculture water demand through irrigation is very important in the lower Drina basin covering Republic of Serbia and Bosnia and Herzegovina. With the likely onset of climate change water demand for agricultural production will become more important throughout the DRB. The principal agricultural areas are assigned to the sub-basins downstream of Kozluk in both Bosnia and Herzegovina and Republic of Serbia. Crop production is highly vulnerable to weather conditions and this situation is expected to worsen with climate change. In order to keep up production, irrigation demand in the basin will likely increase. For example, the area of Semberija in Bosnia and Herzegovina is planned for expansion. For new and existing irrigation schemes, it is important to put efficient irrigation technologies to avoid overuse and limit cross-sectoral impact. Such technologies will provide improved resilience to droughts and will provide reduced competition with domestic use on groundwater

3.2.3 Potable water

Groundwater is used as the main potable water source in the DRB, and the quality is good, but the actual monitoring is often sparse and irregular. In spite of a general abundance of water in the basin, some areas face severe shortages in water supply and availability during dry seasons where demand increases substantially during the summer months (although this concern is more relevant to the tourism at the coastal region, outside of the DRB).

Due to impacts of climate changes the occurrence from heatwaves could be foreseen, while safe drinking water supply is under threat also in the event of floods. Disaster management/early-warning systems for heatwaves and floods are necessary. There are also indirect effects of higher temperatures such as an increase in the number of water borne diseases (e.g. gastroenteritis) where children are particularly vulnerable and algal contamination of water.

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It is assessed that also the potable water in the future will be of sufficient quantity. It is recommended to improve monitoring system in a systematic way to be able to control the quality also under more severe climate conditions.

3.2.4 Industrial uses

The water supply for industry is not a significant issue for the WMR in the DRB. Industry use is the smallest among the other uses (domestic with the largest percentage and irrigation, as second one). Industrial production has significantly declined in last decades and demand is not substantial, what is also an assessment for the future. The same issue prevails on the quality aspects and there is need of corresponding wastewater treatment plants at the main centres of population and for industry in order to reduce the pollution loads in the rivers.

3.2.5 Recreation The DRB is a very important recreational resource and there are potential opportunities to expand this sector (especially tourism) throughout the rivers of the DRB. To achieve this, it is essential to promote and to agree on cooperation between the riparian states. Socio-economic pressures from forest ownership and management, invasive species, hunting and fishing, land ownership disputes in protected areas, change of land use, water use and water management, wastewater, tourism and recreation, and illegal collection of medicinal herbs and fungi, are all contributing to the detriment of the protected areas. Growth of tourism leads to the development of legal and illegal constructions, to the development of infrastructure, to an increase of waste left behind, and to increased water consumption. This development of tourism threatens the ecosystem balance, damages vulnerable zones and needs sustainable management with a limitation of the number of tourists and of the access to natural areas to protect the vulnerable habitats and species. Recreation, tourism and fishing are in obvious conflict with other water uses, e.g. hydropower construction and operations, the diversion of waters resulting in dry riverbeds, pollution etc. The ISRBC has recently developed initiatives and specific guidelines for the promotion of eco-tourism at the level of the Sava basin.2 This document offers a cooperative perspective on the sector, aimed at promoting rural economy across the riparian borders, along the natural course of the river. The guidelines can be focused down to the Drina Basin level aimed at the protection of wildlife and biodiversity, promotion of local products - including agricultural products - and renewable energies.

3.2.6 Aquifers The general trend of groundwater flow direction in DRB is along the Drina valley from southwest to northeast. Although there is adequate groundwater protection legislation in place in all three countries; and the fundamental principles, objectives and measures from the EU Groundwater Directive have been included in the national legislation; often monitoring, enforcement and correct implementation is frequently lacking due to lack of staff and training. This issue can seriously undermine and threaten groundwater quality at source, which is important, as groundwater is the main source of domestic consumption in all countries. Aquifers are particularly at risk near the main settlements. Therefore, it was recommended that in the future establishment of a common groundwater monitoring program and harmonisation of criteria for explanation of source protection zones for the whole DRB should be implemented.

2http://www.savacommission.org/dms/docs/dokumenti/documents_publications/publications/other_publications/tr ansboundary_eco_tourism_guidelines.pdf

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3.3 Protection of water

3.3.1 Sediment management All DRB riparian states through the ISRBC have developed a Protocol on Sediment Management to the FASRB, which affirms the need for efficient cooperation among the riparian countries for promotion of sustainable sediment management (SSM) solutions. The above UNESCO/Sednet initiative provided a practical guidance on how to achieve an SSM plan (as in ISRBC publication "Towards Practical Guidance for Sustainable Sediment Management using the Sava River Basin as a Showcase"). Unfortunately, sediment analysis in the DRB is poorly monitored. Ideally, there should be well-established stations, which should take the following measurements: • Suspended sediment concentrations (SSC) and suspended load, size graduation of suspended sediment and bed materials on a regular basis • Bedload measurements on an occasional basis Alas, in Montenegro and the Bosnia and Herzegovina part of the DRB systematic monitoring of sediment does not exist3. In the Republic of Srpska (BiH) part a soil erosion map that can provide data on erosion processes has been prepared, but the monitoring sites are not within the DRB4 In Serbia three stations are located within the DRB at Mihaljevići, Radalj and , which are being monitored by RHMS for SSC and load transport rate. However, there are many gaps and uncertainties in the record due to outdated instruments and the scope of sediment monitoring is not sufficient. Therefore, for the future the DRB should be better monitored and assessed for sediment by: • increasing the number of sediment monitoring sites especially on the Drina and the main tributaries • Increasing the monitoring of bed load measurements • Agreeing a standardised methodology for sampling and measurement of suspended load and bed load in the DRB • Increasing and updating the amount of monitoring equipment especially for continuous monitoring and for peak flood events and • Undertaking sediment quality measurements according to the EU WFD. Furthermore, the monitored sediment parameters in the DRB stations (existing and future stations) should be connected to a joint Sediment Database free to access for all riparian countries preferably through the ISRBC. There should be better harmonisation of monitored sediment data through application of the same technical international standards. The monitoring network should be made denser with the introduction of new stations and there should be improvements in modelling the data.

3.3.2 Environmental flow Environmental flow (EF) is considered as being the minimal water discharge necessary for maintaining the river health (water quality protection), as well as for the ecosystems (environmental protection) and recreation (social protection).

3 In 1989/90 some measurement of suspended sediment concentration and bedload size was undertaken upstream of isegrad to define reference conditions. 4Tošić R, Dragićević S, Kostadinov S, Dragović N 2011: Assessment of soil erosion potential by the USLE method: case study: Republic of Srpska – BiH. Fresenius Environ. Bull., 20(8), 1910–1917

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After several discussions with the stakeholders in 2016, it was decided that the aim of the study was not to set up a new methodology to estimate the EF in the DRB, but: - To compare the EF values according to the regulations of the three riparian countries, as well as with regard to other international methodologies (USA method, Lanser and GEP methods used in Europe); - To analyse the water balance with the EF values specified in the existing technical documents of the planned HPPs5 and, if no value was found, with the values proposed by the consultant as well as with the maximal values of the respective regulation; - To propose harmonized values to be applied over the entire DRB. As specified during the study, the respective methodologies proposed in Bosnia and Herzegovina, Montenegro and Republic of Serbia are based on hydrological data and allow to calculate the minimal environmental flow. They are summarised in Table 13. Table 13: Minimum EF hydrological methods of the riparian countries in the DRB

MNE FBiH RS-BiH Serbia

Addendum Rulebook OG n° 04/13 No Rulebook No Rulebook of the Rulebook OG n°2/16

mEF=Q95%* mEF=0.1QM* mQmin for mQM(j) / mQmin <10 mEF=

0.2 mQM(j) for mQM(j) / mQmi  10 Q95%: Mean flow exceeded QM: Mean Flow with a 95% probability Based on at least 10 years of hydrologic *In practice till new bylaw will be data : *In practice till new bylaw will be established established mQmin: Mean of the minimum annual values of the mean daily flow

mQM(j): Mean of the mean monthly flow for the month j

Qepp=mEF Based on at least 10 years of hydrologic data :

Qsr=mQM :Mean of the mean annual flow

srQmin=mQmin srQDEK(j)=Mean of the decade flow for the month j

As recommended in the countries' regulations of Federation BiH (BiH) and Montenegro, and recommended by the Consultant, in regions of high environmental value, dedicated an environmental study should be performed to adapt (and possibly increase) the magnitude of the minimal EF. The results of the water balance computations with the Drina Basin water management model (using the WEAP software) show that the water balance is conserved when using the EF minimal values based on the three countries regulation and when using the EF values proposed in the technical documents of the planned HPP.

5The tested values in the Drina Water Management Model in WEAP have been updated on the basis of the stakeholders' comments through the development of the IWRM and IPF reports and based on the requests during the WEAP workshops.

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The Drina River crosses the Federation BiH (BiH), Republic of Srpska (BiH) and Republic of Serbia territories; some tributaries as the Lim and Ćehotina rivers also cross two or three countries in the DRB. The Consultant therefore recommends the three countries to agree on adopting a harmonized method of evaluation of the minimal EF based on hydrological data of the DRB. The FBIH methodology (Art. 11 of Rulebook OG FBiH, No 04/13) proposes a method to calculate the minimal EF resulting from a consultation of key stakeholders from HPPs, hydrology and environmental institutions. The method defines a seasonal variation of the minimal EF relevant for the corresponding needs of both users and aquatic ecosystems. In addition, the resulting minimal EF values are a good compromise covering the values estimated by the Republic of Serbia and Republic of Srpska (BiH) methods (single constant value over the year). The Montenegro method (Art. 8 of the addendum of the Rulebook OG No 2/16) depends on the monthly hydrological values. It leads to monthly minimal EF values. It can be observed that in some cases, the fluctuation of the monthly minimal EF value is not always in harmony with the needs of the aquatic ecosystems. Therefore, for the future development scenarios of the DRB, the consultant recommends adopting the Federation BiH (FBiH) method for calculating the minimal EF throughout the DRB for the new water intakes. In river sections with natural spawning areas of high value fish species (like the Danube Salmon or the Brown trout), in protected areas or in sensitive alluvial ecosystems, a specific environmental study should be performed. The assessment study to adapt the EF value should also integrate the characteristics of the new HPP/SHPP (diversion or not) and the backwater effect of the existing reservoirs.

3.3.3 Water quality Classification Although all three countries are in the process of WFD transposition in national legislation, the methodology for classification of water quality and corresponding standards differ in the DRB countries are summarized in Table 14. The methodology used to determine the ecological and chemical status of water bodies in Republic of Serbia is formulated in the Act on Parameters of Ecological and Chemical Status and Quantitative Status of Surface Waters and Parameters of Chemical and Quantitative Status of Groundwater (Official Gazette of Republic of Serbia, No. 74/11). This Act establishes the parameters and their threshold values for the determination of the ecological and chemical status of rivers and lakes; parameters of ecological potential for artificial and significantly modified water bodies; and parameters of the chemical and quantitative status of groundwater. Ecological status of surface water is determined based on the three groups of quality indicators: biological, hydromorphological and physico-chemical. The ecological status of natural (unmodified) water bodies is classified as: excellent (I), good (II), moderate (III), poor (IV) and bad (class V). Chemical status indicates whether the water body is under the influence of pollution by priority, priority hazardous and other pollutants. The chemical status of water bodies is assessed based on the monitoring results, as good status or failure to achieve good status. The classification of water quality in Bosnia and Herzegovina is comparable with the Republic of Serbia legislation. The classification of the water quality in Republic of Srpska (BiH) is provided by the Decree on Water Classification and Categorization of Water Courses (RS OG, No 42/01) and on the Law of water (RS OG, No 50/06, 92/09, 121/12 and 74/17). However, the Decree did not define limit values for all biological and physical-chemical parameters as required on EU Directive and for some specific parameters, the prescribed limit values do not comply with these EU regulations. In Federation BiH (BiH), the classification is based on the Characterization of surface water and groundwater (FBiH OG, No 1/14), which has been harmonized with the EU Directives. This decision provides the reference conditions and parameters to determine the status of surface water and groundwater.

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In Montenegro, Decree on classification and categorization of waters (OG 2/07) categorises water into three classes according to the permissible limit values of certain groups of parameters, depending on the purpose of the water usage. In this sense, water may be used for drinking, used for beverages and food industry; fish and shell farms; bathing and swimming. Obviously, there is a need for harmonization of the classification for the three countries, in order to have a homogeneous picture of the surface water status at the basin level and to provide comparable Management Plans. The strategy for harmonization is completion of the WFD transposition into national legislation and its implementation, including institutional system and methodology by all three countries. Table 14: Comparison of water quality classification legislative in three countries Republic of Serbia BiH Montenegro Ecological status for surface FBiH: Classification according to water and Ecological potential Since 2014, classification permissible values of physico- for highly modified water harmonized with EU Directives chemical and biological indicators bodies (HMWB) is classified depending on the purpose of the based on physico-chemical and RS-BiH: water usage: microbiological indicators Five classes of water quality - Water that can be used for Classes I to V (Excellent to Poor) status (I to V) based on physico- dinking and food production chemical, microbiological and (Classes A, A1, A2 and A3) Chemical status is categorized hydromorphological - Water for fish and shell as good or not achieved good parameters. Not completely production (Classes S, W and C) status, based on the content of harmonized with the EU - Bathing water (Classes K1 and priority, priority hazardous and directives. K2) other pollutants. Water quality categorization: Class I: A1, S, K1 Overall status/potential is Class II: A2, K2, C classified as worse case of two. Class III: A3

Following characterisation is determined according to each country classification. Baseline water quality characterization Generally, the water quality in the DRB has been improving after the war (since 1995), mainly due to the reduction/closure of industrial facilities in the basin and the slow uptake of new industry and agriculture. The characterisation study revealed that present water quality status, which includes ecological and chemical status of the Drina River and its tributaries, can be considered as moderate to good. Drina River At the upstream part of the Drina River (up to Goražde) the ecological and chemical status is good, while the downstream part has higher nitrogen, phosphorous and organic loads. The ecological status from Goražde to Višegrad and from Zvornik to the mouth is classified as moderate. However, its chemical status from Goražde to Višegrad and from Zvornik to the mouth is classified as bad. Present status of water quality is a consequence of various sources of adverse impacts, which are discussed in the next chapter. Tributaries The tributaries in the DRB are mostly considered to have a good water quality status. There are few tributaries with moderate to bad water quality. They correspond to tributaries under direct influence of sewage outflows or industrial/mining dumpsites (e.g. Ćehotina River and its tributary Vezišnica River in

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Montenegro with pollution discharges from the thermal power plant, the coalmine and the Šuplja stijena lead and zinc mine in Pljevlja; Kostajnička River and River in Republic of Serbia receiving filtrate from the tailing etc.).Lim River has good status at the upper, while the lower part (downstream from Berane) has not reached the good status. Tara River has a good status along nearly 65% of its watercourse. However, the water quality is deteriorated by communal waste deposit site in the municipality of Kolašin and one site within the Municipality of Mojkovac. Piva River has a good status with the best quality of water in Montenegro. This is due to the very few settlements along this river. Groundwater Despite the lack of precise information, groundwater bodies are mainly considered as of good water quality and quantity status. The karstic aquifers with good permeability and substantial groundwater accumulation dominate the DRB and represent the most significant water-bearing rocks of the DRB, especially in the Montenegro. It should be emphasized that groundwater is the main source of potable water in the DRB. The most significant pressures on groundwater quality are evident in the area of Mačva and Semberija with intergranular aquifer porosity, due to agriculture activities and inadequate sanitation. The recharge of quaternary aquifers in this area is dominated by the surface infiltration and Drina riverbank infiltration, while the water supply exploitation represents the main discharge in the aquifer water balance.

Identification of significant pressures

The most significant adverse impacts on water quality are urban and industrial non-treated wastewater, municipal solid waste, wild landfills, industrial waste deposit sites near the riverbanks and agricultural activities.

The main municipal hotspots in Montenegro are present in Pljevlja, Berane and Bijelo Polje. In Federation BIH (BiH), they are present in the municipalities of Goražde, Pale-Prača, Ustikolina and Kladanj. In Republic of Srpska (BiH), all the municipal hotspots are located downstream of wastewater outfalls from main settlements on the tributaries and on the main Drina River. This includes settlements such as, Bijeljina, Zvornik, Višegrad and Foča. In Republic of Serbia, Loznica, Mali Zvornik, Krupanj, Ljubovija, Bajina Bašta, Prijepolje, Sjenica, Priboj, Nova Varoš and Čajetina.

At the DRB scale, slightly above20% of population is covered with the sewage collection systems, with similar coverage ratio in all three countries. The rest is considered as diffusive load released directly into the streams or into the septic tanks. The collected wastewater is mainly released directly into the river without any treatment. In Montenegro part of the DRB, about 22% of population is connected to the sewage system, with municipal wastewater discharge load of 80,250 EP. Only Mojkovac and Žabljak have WWTP facilities (5250 EP and 2150 EP, respectively). In BiH part of the DRB, the percentage of coverage is similar (22%) with total municipal wastewater discharge load of 137,000 EP. There is only one functional WWTP in Bijeljina (V. Obarska) with capacity of 40,000 EP (The WWTP releases effluent to the Sava River by Majevički channel). In the Republic of Serbia part of the DRB, there are no operational WWTPs and municipal wastewater load is estimated about 91,000 EP.

The most polluting centres of industrial activity are located at nine sites in the Bosnia and Herzegovina part of the DRB, with the four largest potential industrial pollution sources being coal mining in , bauxite mining in Zvornik and lead and zinc mining in Srebrenica. Main industrial sites in the Republic of Serbia part are located at Loznica, Bogatić, Koceljeva, Ljubovija and Mali Zvornik, with the Loznica chemical industry and the mines at Ljubovija with the greatest cause for concern. In Montenegro part of the DRB, there are no significant industrial facilities, except in the Pljevlja region, where the TPP and coal, zinc and lead mines pose a significant threat to human health and environment.

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Solid waste disposal into landfills and general "fly tipping" in the catchment represent a persistent problem. There is no waste incineration or mechanical and biological waste treatment in the DRB. Landfill disposal is the only current option for solid waste management; hence, work to reclaim, remediate and sanitise them is urgently required.

The Figure 10 shows urban wastewater hotspots of the DRB and registered industrial and solid waste landfills including the “wild” landfills.

Figure 10: Urban, Industrial and solid waste hotspots at the DRB

Agricultural hotspots are a major source of distributed pollution of surface water and groundwater, originating from uncontrolled and excessive use of agrochemicals, improper use of pesticides and fertilizers, and others discharges such as farm slurry etc. The main agriculture hotspots are located in large pockets of farmland, particularly surrounding the cities of Goražde, Bratunac Bijeljina in Bosnia and Herzegovina, Loznica, Bogatić, Vladimirci and Koceljeva encompassing the Semberija area in the northern part of the DRB.

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Main challenges to protect water quality All strategic documents in three countries indicate release of urban wastewater into streams and rivers as a significant pressure on water quality. It is certain that planned goals established in these documents regarding sanitation infrastructure and WWTP construction are quite optimistic. These investments require significant investments e.g. in the Montenegrin part of the DRB by 2029, it is planned realization of WWTP facilities in 9 municipalities with the extension of the existing sewage infrastructure by 227 km of primary of secondary mains. In the Bosnia and Herzegovina part of the DRB, it is planned to construct seven new WWTP facilities by 2027. In the Republic of Serbia part of the DRB it is planned that all conglomerations larger than 2,000 EP will provide adequate wastewater treatment by 2040. Realization of planned sanitation and WWTPs will be challenging from additional reasons: existing sewage systems are mainly developed partially, from the central part of municipalities towards the periphery, causing the capacity problem; dominantly the combined sewer systems are present; limited sewage coverage; etc. Moreover, public utility companies and local communities, which are responsible for maintenance of existing systems and development of new ones in all three countries, are highly constrained by legal, organizational, financial and other aspects and resources. In order to provide sustainability of wastewater systems, it is necessary to implement legal, institutional and operational measures related to the efficiency and performance of these companies. Implementation of WWTPs will have significant positive effects on water quality management of proposed reservoirs. HPPs, as the most economically effective parts of integrated water management system in the basin, may represent a spin-off trigger for realization of wastewater related strategies. Similar conclusion can be derived regarding existing solid waste management development strategies. The current waste management at the DRB rely heavily on landfill disposal, with extremely low operational standards and environmental considerations. This is best illustrated by the fact that there is only one existing regional solid waste center in the DRB (Bijeljina, Republic of Srpska (BiH)), while nine more are planned according to existing strategies on waste management (Foča, Goražde and Zvornik in Bosnia and Herzegovina, Bijelo Polje, Berane, and one for municipalities Pljevlja and Žabljak in Montenegro, and Loznica, Užice and Nova Varoš in Republic of Serbia). Development of sanitary compliant landfills must be accompanied with gradual closure of the existing waste dumps and significant shift in public attitudes to waste. As dams and water management schemes are constructed, the requirements of wastewater treatment investments will be additionally pronounced. Formation of reservoirs and transition from lotic towards the lentic conditions generally increases the sensitivity of water quality status on untreated wastewater load. Implementation of comprehensive wastewater infrastructure development plans is needed for the DRB, since pollution of water is mostly due to untreated municipal and industrial wastewaters caused by the lack of facilities for wastewater treatment. Mains expected impacts of scenarios development and investments In the case of relatively low reservoir volumes of the planned HPPs, the river flow regime downstream of the HPP is not expected to be influenced significantly. The most of considered reservoirs will represent aquatic ecosystems that will act and function as a transitional form between river and the lake systems, characterized by an average water retention times between 0.5 days (“Goražde” HPP) and 4.8 days (“Drina III” HPP). Several would form the typical lentic conditions due to significant volume related to average flow rates (“Komarnica” HPP – 118 days, “Andrijevica” HPP – 32 days, “Vikoč” HPP – 146 days and “Sutjeska” HPP – 52 days retention time). Considering the current water quality at the designated locations, i.e. anthropogenic influence reflecting in this quality, reservoirs will generally not have a significant potential trophic level, except the “Vikoč” HPP reservoir on the Ćehotina River, with the significant trophic potential.

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In addition, reservoirs at the lower part of the basin (“Drina I-III” HPP and “Kozluk” HPP), due to relatively small averaged water depth, will have significant trophogenic portion of the volume and significant littoral zones with fine sediment and low water velocity. This will provide excellent conditions for production of macrophytes. Accompanied with stable water level and favourable water temperature, significant primary production can be expected in these reservoirs. In all other cases, there is a potential of minor adverse impact of proposed reservoirs on several water quality indicators. As an example, one may expect that water temperature will be slightly increased during the warm season and slightly decreased during the coldest period. In addition, dissolved oxygen concentrations will certainly be slightly decreased in comparison with current conditions. On the other hand, one could expect certain beneficial effects regarding water quality at downstream stretch of the river (e.g. turbidity, heavy metal concentrations, etc.). Overall, it can be expected that planned reservoirs will represent a kind of water treatment reactors for downstream users. In addition, the reservoirs may have significant protection role in accidental contamination events. Main objectives of protection and recommendations The targets of the Water quality development comprise all relevant water related national strategies and other relevant development policies and strategies that can influence the water quality. Main strategic objectives: • Achievement and maintenance of good status of surface water and groundwater bodies in the context of overall environment and health protection: - For water bodies with estimated good or high status, the objective is to provide conditions for its long-term maintenance through the pollution control. - For other surface water and groundwater bodies with moderate to bad status, it is necessary to suspend the causes of pollution and to provide conditions for water quality revitalization. Operational objectives: • Reduction of contamination of surface water and groundwater (point pollution sources): - Development of urban waste water sewage collection systems and WWTPs in accordance with strategic priorities; - Reduction of pollution from industrial activities in accordance with the relevant legislation: Improvement of waste water treatment and application of best available technologies; - Sanitation of solid waste landfills and industrial tailings/dump sites; - Improvement of the solid waste management; - Improvement of the fish farming process (as built of nutriment precipitators). • Reduction of contamination of surface water and groundwater (distributed pollution sources): - Reduction of individual domestic wastewater releases (distributed type of pollution); Development of sanitation infrastructure must be followed with WWTP developments, otherwise, effects on surface water quality are adverse. - Reduction of pollution from agriculture activities: strengthening of the use of insecticides and pesticides. • Establishment of information system and monitoring of water quality status indicators for surface water and quality and quantity status indicators for groundwater. • Improvement of water management towards improvement and maintenance of good status of water bodies: reservoir management, HPP operation, promotion of groundwater recharge, etc.

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• Identification and protection of protected areas: - Establishment and Protection of water supply sources; - Identification and protection of nutrient-sensitive areas; - Identification and protection of economically significant aquatic species; - Identification and protection of water bodies identified as bathing waters.

Main short term proposed priorities: In order to prioritize the water quality targets and base on previous discussions with stakeholders, it is proposed to consider in a short term the following targets: • Increase of population covered with the sewage system and construction of treatment facilities with prioritization from larger agglomerations towards the smaller ones. • Removal of illegal municipal and industrial solid waste landfills near rivers and construction of regional sanitary landfills and sanitation of existing landfills. • Increase of the solid waste collection system and of the education to sort-off wastes. • Protection of groundwater (application of groundwater protection zones, regulation of groundwater extraction and implementation of measures for prevention of contamination).

3.3.4 Flora and fauna management Main expected impacts of scenarios developments and investments The development of the Wastewater and solid waste managements of the retained scenarios will improve the water bodies’ status and the riparian areas. Therefore, these managements will contribute to the improvement of the aquatic ecosystem for biodiversity. Finally, the main pressures for biodiversity due to the proposed development scenarios concern the construction and the operation of new HPP and SHPP. The main maximal expected impacts of these HPP and SHPP investments, without appropriate mitigation measures, are summarized below. During construction phase The negative effect of dam development is the direct destruction of wildlife by cleaning of the terrain. Therefore, during development of individual dams, associated objects and infrastructure, it will be necessary to remove all vegetation on surfaces on which these objects will be situated. Potential emission of pollutants during construction can have direct and indirect negative effects on organisms. Burning fossil fuels and usage of heavy machinery that uses large quantities of lubricants will have direct and indirect negative influences on biodiversity and especially plant communities found around the sites if they are used without caution and if the machines do not meet the pollution standards. Noise levels on site during construction, as well as presence of humans and heavy machinery will increase significantly, limiting the use of the construction site by local fauna. Hydro-technical works during construction will influence migration patterns and reproduction success of aquatic organisms in the construction site, with potential spread of influence on the zones proximate to the site. They will have diverse negative effect on the ecosystem of the river as well as habitats associated with it. Most prominent negative influences are changes in river profile, changes in water level and turbidity, emission of dust and vibrations, potential emission of liquid pollutants. These effects will have a negative influence on aquatic organisms, notably on migration and food base of fish, habitat requirements and availability for aquatic invertebrates, macrophyte and phyto and zooplankton.

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Activities during construction will affect alluvial forests (forests of willow, alder and birch) within DRB. As construction activities affect flow regime and remove vegetation, the floristic structure will be changed in surrounding terrestrial ecosystems. This can lead to proliferation of invasive plant species that were recorded in the surrounding areas, considered very aggressive: Amorpha fruticosa, Acer negundo, Aillanthus altissima, Aster sp. Reynoutria japonica etc. Destruction of plant communities will be followed by other negative effect such as reduction of food availability and of hides for fauna as well as erosion and reduction of nutrient value of the soil. Bigger and more mobile representatives of fauna will be able to evacuate the site and find more suitable feeding and breeding grounds, but this will come with an increased resource competition with the individuals already present on these sites. During construction, population of many of the species will decline on the site. Due to all the stated negative influences, landscape characteristics will degrade and numbers of grand majority of species previously present in the area of the future reservoir will drop, some of which will disappear. It should be noted that most of the “construction phase” adverse effects might be reduced or mitigated by application of adequate mitigation measures and best available technologies (see below following chapter). During operation phase At the moment, there are eight medium-to-major reservoirs in DRB. Among them, there is only one fish ladder (at the "Zvornik" dam) with a temporary function. Construction of reservoirs destroys habitats over the area they cover. In addition, the reservoirs divide the populations of many species. This division is at times incomplete, as the fish ladder can be constructed and integrated in the project, but even then, ecological division will remain, as the ecological conditions in free flowing rivers are completely different when compared to reservoirs (free aerated high-speed water stream to calm and slow stream). For the lower Drina, where the section of the river is characterized by calm water and rich population of Cyprinid fish, the impact of new dams is more mitigated than in the upper part of the DRB. Construction of reservoirs on Drina River will drastically change the ecological characteristics of the basin, altering significantly ecological balance. Downstream from the reservoirs, rivers will flow as before, but with variable temperature, clarity and water level. Upstream of dams, it will change into an ecosystem similar to the small natural mountain lakes in the upper-stream and further downstream, as the turbidity and level of pollutants rise, the newly formed reservoirs will likely advance to typical mesotrophic lakes. Therefore, most of the negative impacts can be summarized into following categories: • Change of river ecosystems into lake ecosystems, whose influence is augmented through their role as a physical and ecological barrier. • Loss of ecological balance: Fast change of temperature, turbidity and oxygen levels, downstream from reservoirs lead to ecological problem for the required conditions for the present fish population. • Changes in microclimate that leads to change of groundwater levels: that could affect the plant communities, potentially at a larger scale. • Loss of autochthonous plant communities and fauna, followed by invasion of alochtonous or previously absent species. As already mentioned, the impacts of development scenarios can be mitigated with adapted measures as described in following sections. Even equipped with a fish ladder, the proposed new reservoirs will change the abundance and the population structure of certain species. This issue can be mitigated with complex fish restocking but the history of the dams already constructed on Drina River did not really demonstrate

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proper management of the fish populations, even though initial projects demanded it after construction. The risk that the same will happen with future projects is therefore high. Main objectives of protection and challenges The water management and developments of investments must integrate environmental managements with a set of specific protection measures:

- Aquatic ecosystem protection in particular fish population The protection of aquatic ecosystem is perhaps the most important of the environmental parameters to consider. Indeed, construction of HPP could jeopardize the natural migration of fish species in the DRB if it is not limited and if it is not properly mitigated. The changes in water intakes and water abstractions management, in dam constructions and operation as well as in climate changes would modify hydraulic regimes (discharge, water level and stream velocity). This could deeply influence the functionality of the fish populations in DRB, even though they would continue to exist in a near natural state in the sections of the river unaltered by reservoirs and hydro-peaking. Based on the status described above, preservation of the functionality and resilience of the aquatic ecosystems is a key issue and to achieve it, the following objectives can be derived: • Improvement of the existing water resource management (quantity of water). • Avoiding reservoir construction and hydro-peaking in the areas known as spawning sites of Danube Salmon. • Impose fish ladder for new dams where technically possible for every new reservoir. • Establishment of the fish-stocking program: Reservoirs represent ecological and physical barriers to the free movement of fish species, especially important during migration period, even with a functioning fish ladder. • Establishment of a monitoring scheme for aquatic ecosystems, primarily for the populations of the 4 targeted fish species: the Danube salmon (Hucho hucho), the Grayling (Thymallus thymallus), the Bullhead (Cottus gobio) and the Brown trout (Salmo labrax), and also a monitoring scheme for phytoplankton, other aquatic flora and aquatic macro-invertebrates. • Monitoring of the state of the remaining riparian vegetation and alluvial ecosystems. • Impose and control of the environmental flow. • Reduce in hydro-peaking during spawning period. • Efficient regulation and management of gravel exploitation. • Enforcement of the stricter fishing regulation during the period of drought. • Reduce the pollution caused by the fish farming process - Achievement and maintenance of the good status of surface and ground water bodies (quantity and quality) See the above Sub-Section 3.3.2. - Guaranteed provision of a minimal environmental flow in all rivers and tributaries of the DRB The provision of a minimal environmental flow (EF) is necessary to meet the aquatic ecosystem and the water quality objectives. In order to provide sustainable and sufficient minimal quantity of water, the targets for the provision of minimal quantity of water are:

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• To impose a minimal EF for all the new surface and groundwater intake structures (HPP, fish farms, industrial water intakes, groundwater extraction…) which is compatible with the sustainability of the ecosystem and other water uses. • In high ecological regions (protected areas, spawning areas), definition of the EF value based on an environmental assessment study (see Sub-Section 3.3.2). • Harmonization of the minimal EF method of calculation between the riparian countries for transboundary rivers (see Sub-Section 3.3.2). - Protection of wetland/alluvial riparian ecosystems Unfortunately, there is very little data available about riparian ecosystems and no European classification of quality of the riparian ecosystems. Therefore, at this stage, it is not possible to locate the riparian ecosystems of high, good and moderate quality. In order to secure the functioning and preservation of the alluvial and riparian habitats, the following targets should be met: • A classification and monitoring scheme of the riparian and alluvial habitats in the DRB should be established • Riparian vegetation along rivers should be protected and restored, especially along smaller tributaries in order to prevent soil erosion, filter pollution and prevent floods • Concept of flood protection to be coordinated • Mitigation of drought with water from HPP reservoirs • Coordination of land use and in particular agriculture • Protective forests should be managed in order to prevent clear cutting, especially near the streams or other water bodies. Improvement of forestry practices for the purpose of sustainable use and protection of forests and expansion of forest areas in critical / significant zones. - Extension of protected areas In order to secure the functioning and preservation of the protected area network and the biodiversity it supports, the following targets should be met: • Harmonization of the national regulations and fostering of cooperation between the three countries in the DRB in order to successfully implement biodiversity protection programs, • Reinforcement of the protection regime in protected areas in coherence with the requirements for nature protection and target species • Strengthen regulation concerning riparian ecosystems in protected areas. Main recommendations to protect the biodiversity for the future developments As already mentioned, the environmental impacts due to the future developments can be significantly mitigated with adapted mitigation measures, as following: Environmental recommendations during construction (Implementation responsibility) • All sites of temporary storage of materials should be restored to their original state after the construction process has been terminated (Contractor). • As the biodiversity values of the sites proposed for construction are relatively unknown, a detailed field study of the biodiversity of the local sites should be conducted during minimum 1-year period to implement the environmental assessment study. If necessary, projects should be adapted based on the results, within the technical characteristics of the project (Investor).

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• In case that the impact cannot be avoided, destroyed habitats or species should be, if technically possible, moved, relocated, recreated or ameliorated elsewhere to compensate for the loss caused by the project development. If it comes to species relocation or amelioration of the habitats outside of project zone, appropriate management should secure their long-term sustainability. All these measures must be done in accordance with the regulations (Investor). • During submission procedure to the enterprise, specificity of type of machines and antipollution measures should be imposed in the tender documents. As an example, only organic oil should be used for machines, sealed area for hydrocarbons, deposit area outside the river influence… (Contractor). • Material managements should be optimized to use as possible the site materials and to minimize the transport of material (and therefore to minimize the air pollution) (Contractor). Environmental recommendations for operation, including existing dams (Implementation responsibility by Investor) • For the existing dams, fish ladder has to be used whenever possible and flushing should be done in a low intensity increase and decrease of discharge to avoid erosion and fast changes in turbidity, water level and temperature. • Fish ladder should be installed on all the proposed dams as a mean of connecting the populations on both sides of the reservoir. Even though fish ladder cannot overcome ecological barriers of a reservoir, it can help in preservation of migration routes and have a positive influence on spawning success. • Based on the characteristics of the river flow and its fauna, a complex, site-specific fish stocking programs should be designed and applied to mitigate the negative effect of dams on the quantity and the structure of the fish population. • An assessment environmental study should be realized to fix the environmental flow; indeed, the country regulation gives the methodology to calculate the minimal environmental flow based on hydrological data, but in any case, the minimal value should be improved to integrate the high environmental value of the downstream section of the impacted River. • A controlled flushing program, for normal operation condition, should be established taking into account the sensitive period for the aquatic and riparian ecosystems to prevent rapid changes in turbidity, water and oxygen levels. This operation program should decrease stress and destruction on the organisms located downstream during flushing operation. • A monitoring of the target species defined in the environmental assessment study should be done during the three first years of operation to control if the mitigation measures are sufficient for the impacted biodiversity and should concluded if some improvements of the dam and operation are needed.

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3.4 Monitoring

3.4.1 Introduction In the ToR are defined the following Consultant's tasks related to monitoring: • To perform the identification of the existing monitoring networks, • To present an overview of data availability and reliability of existing data and • To propose improvement measures (network optimization and standardization). These tasks were not modified in the Inception Report. The Consultant has presented the corresponding analyses in IWRM and IPF Country-Reports in the following manner: • In IWRM Country Reports are presented the list of existing (active) measurement stations (hydrological and meteorological) and general recommendations related to network improvement and • In IPF Country Reports are presented specific recommendations, i.e. the list of stations proposed by the Consultant or stakeholders.

3.4.2 Results presented in IWRM Country Reports In Section 11.1. "Monitoring infrastructure" is presented the general information on monitoring, division of monitoring into types, classification of measurement stations, as well as the basic data on monitoring in the Drina River basin. In Section 11.2. "Organization of Monitoring" is given an overview of organizations in the Drina River Basin involved in monitoring, for the entire basin, as well as for individual countries. In Section 11.3. "Data Exchange" are presented the explanations related to data management and data exchange on various levels (global, regional and basin level). In Section 11.4. "Conclusions and Recommendations" are presented recommendations related to improvement of the measurement stations' network, improvement of the data management system and improvement of the data exchange practices. Within the annexes are presented the data on existing hydrological and meteorological stations in the basin, as follows: • For Republic of Serbia on 10 hydrological and 42 meteorological stations, • For Montenegro on 12 hydrological and 45 meteorological stations, • For Federation BiH (BiH) on 1 hydrological and 1 meteorological station and • For Republic of Srpska (BiH) on 1 hydrological and 18 meteorological stations. This overview was formulated upon information and data obtained from authorized institutions, primarily hydro-meteorological services, electric power companies and water management companies. It served as a good starting point for definition of proposals related to improvement of operation of existing and introduction of new hydrological and meteorological stations on the River Drina Basin territory.

3.4.3 Results presented in IPF Country Reports In IPF Country Reports were used data on the existing network of stations, the overview of which was presented in IWRM Country Reports; based on that were developed specific recommendations, i.e. the list of stations proposed by the Consultant.

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The list of existing stations presented in IWRM Country Reports was updated and the total of 30 hydrological and 78 meteorological stations in the Drina River Basin were identified (in Republic of Serbia 10 HS and 44 MS, in Montenegro 12 HS and 18 MS and in Bosnia and Herzegovina 8 HS and 16 MS). In Sub-section 4.4.1 "Current state of the network" is given an overview of the current monitoring network status. In Sub-section 4.4.2 "Users' needs for system improvement" are identified individual users and their needs related to the improvement of the existing system. In Sub-section 4.4.3 "Minimum set of measurement parameters" are given comments on the minimum set of parameters which should be measured on all existing and future stations. In Sub-section 4.4.4 "Improvement of existing station network" are given specific recommendations regarding the improvement of the existing monitoring network. In Sub-section 4.4.5 "Network expansion with new stations" are given proposed new hydrological and meteorological stations, based upon harmonized stakeholders' and Consultant's opinions. In Sub-section 4.4.6 "Increase in number of subjects whose measurements are used" is presented the discussion about the prospects of inclusion into the monitoring network of certain subjects whose measurements have not been used so far, except for their own purposes. In Sub-section 4.4.7 "Implementation of network improvement program" is given a comment regarding the possibilities of implementation of the monitoring network improvement program. In Sub-section 4.4.8 "Conclusions" are presented conclusions and recommendations, some of which will also be given here.

3.4.4 Proposed new monitoring stations One of the most important results produced by the Consultant is the list of proposed new stations, developed in the following manner. First was performed a detailed analysis of the existing monitoring network. In the next step was defined the methodology for network improvement and identification of new measurement stations, which can be used for assessment of stations' importance based upon several criteria that take into consideration various users' needs. This methodology was first tested using the existing stations and it was demonstrated that its results correspond to generally accepted perception regarding the importance of specific stations. Following this was formulated a wider list of potential stations and they were ranked using the abovementioned methodology. During the formulation of this list were also taken into consideration the stations the introduction of which was proposed by stakeholders themselves (they are listed in various stakeholders' planning and other documents). The best rated stations are presented in the IPF Country Reports as high-priority ones and for a certain number of meteorological stations are also listed alternative locations. The following numbers of new stations are proposed: • On the territory of Republic of Serbia 6 hydrological and 6 meteorological stations, • On the territory of Montenegro 19 hydrological and 13 meteorological stations and • On the territory of Bosnia and Herzegovina 14 hydrological and 15 meteorological stations.

3.4.5 Conclusions related to monitoring The existing network of hydrological and meteorological stations in the Drina River basin is not uniformly developed and the same lack of uniformity can be noticed related to data availability, not only historical,

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but current as well. The improvement of this network, by improvement of the existing stations, as well as by introduction of new ones, is necessary. A certain part of the funds necessary for these purposes already exists in budgets of the most important monitoring subjects in the basin. The remaining funds could be provided within the framework of planned projects in the basin. In IPF Country Reports it is stated that it would be possible to use the funds envisaged within the GEF SCCF project for this purpose. Currently there is no available information on this project, but there is an information on the West Balkans Drina River Basin Management (WBDRBM) Project, which should be considered as well. It is also suggested that certain stakeholders should procure the software which would allow for uniform data management and facilitate data exchange in the basin. The improvement program presented in IPF Country Reports defines the priorities and directions for further development of monitoring in the Drina River Basin in a clear and unambiguous manner.

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4 Specific issues

4.1 Coherence of development scenarios A potential source of inconsistency could be imagined in a gap between the strategic development plans of the countries and the scenarios resulting from the MCA analysis. As the stakeholders were all actively involved in the preparation of the scenarios for their own territory, such a risk is however quite limited. It is therefore assumed here that, for each country, the results of the analysis applied to its own scenarios are in line with its strategic plans. Montenegro is fortunate to be able to develop their optimal electricity production infrastructure largely independently from the other countries. Their retained scenario does not generate serious inconsistencies with other development plans in the same sector. Some precautions will however possibly have to be taken for coordinating with other countries (located downstream) during the operation phase, but they do not jeopardize the meaningfulness of the selected projects. The optimal development strategies of Republic of Serbia and Bosnia and Herzegovina present, on the other hand, a strong discrepancy along the middle and lower course of the Drina River. The optimal scenario for Bosnia and Herzegovina does not include construction of the new hydropower plant on this stretch of river, whereas optimal scenario for Republic of Serbia opted for the construction of four HPPs there (“Rogačica”, “Tegare”, “Dubravica” and “Kozluk”). Obviously the optimal development intentions are not coordinated. The temporary discrepancies between optimal scenarios are caused by the fact that performed analyses were made for each country separately. Actually, based on valid strategic planning documents four mentioned HPPs are proposed for construction both in Republic of Serbia and Bosnia and Herzegovina, and there are not real discrepancies. The integral development scenario for whole Drina River basin includes all HPPs included within optimal development scenarios for three countries. The potential transboundary issues should be solved by coordination and permanent communication between riparian countries. At the next station on the way to concretizing the plans developed in the present project, discussions will have to be initiated between the countries, in order to find practicable solutions for a harmonious regional development. The next two sections present the legal implications of such a situation and sketches ways to resolve the – for now only apparent – inconsistency.

4.2 Transboundary issues

4.2.1 Status, challenges and obstacles For realization of transboundary projects involving the three countries in the Drina River Basin, i.e. Republic of Serbia, Bosnia and Herzegovina (Republic of Srpska and Federation BiH) and Montenegro, there are several general factors. As the most important could be considered their status in regard to international agreements and character of obligations of these countries derived from international agreements they are parties to, then the possibilities and methods of their implementation, then the status and prospects of development of the country-level regulation in the field of water resources management and other regulation related to environment, status of regulation in other fields of direct importance to water resources management (energy production, communal services, agriculture etc.), status of capacities of institutions authorized for application and enforcement of regulation etc. The EU integration process, into which all three countries are included, i.e. the process of harmonization of country-level regulation with the EU acquis, is the key factor that impacts, among the other, the current legal system status and tempo of their further transition. In Republic of Serbia, Montenegro and Bosnia and Herzegovina (at the level of Republic of Srpska and Federation BiH) there is a relatively complete system of regulation in the field of water resources management and other fields of importance to water resources management. In the EU integration process, the final objective of which is the membership in the EU, three

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countries have attained different levels of activities and different levels of harmonization of their country- level regulation with the EU acquis. Montenegro has gone farthest in this process, while a certain lag on behalf of Bosnia and Herzegovina is most often explained by circumstances related to the complex political system structure and government organization, i.e. peculiarities of internal affairs in this country. All three countries are parties to the most important international multilateral agreements in the field of water resources management. These agreements are: Helsinki Convention on Protection and Use of Transboundary Watercourses and International Lakes and Sofia Convention on Co-operation for the Protection and Sustainable Use of the River Danube. All three countries participate in activities defined by the Framework Agreement on Sava River Basin. However, there are certain differences regarding the status in certain multilateral agreements in the field of water resources management. Montenegro is the only one of these three countries to be a party to the Convention on the Law of the Non-navigational Uses of International Watercourses, but it is not a party of the Protocol on Water and Health attached to the Helsinki Convention on Protection and Use of Transboundary Watercourses and International Lakes. Montenegro had defined its status regarding the Framework Agreement on Sava River Basin by conclusion of the Memorandum of Understanding. The cooperation among the countries in the region is defined by obligations derived from international agreements, while the elaboration of a certain part of activities in the field of water resources management was realized through the content of strategic and other documents adopted within the framework of institutions established by the corresponding international agreements to which these countries are parties. There is a high level of symmetry among the countries in the region in regard of other key international multilateral agreements related to environment, but there are also certain differences, that could, under certain circumstances, present a challenge in implementation of activities which include transboundary projects. Of general importance are international agreements that regulate the issues of direct importance to the status of water resources and water resources management in the basin, such as international agreements in the field of climate change, biodiversity protection, industry accidents, hazardous waste management and hazardous chemicals etc. All three countries ratified the Paris Climate Agreement. For realization of cooperation among the countries in the region, one should particularly consider the obligations derived from international agreements which regulate the application of environmental impact assessment in the transboundary context and strategic environmental impact assessment, as well as the provisions of the Aarhus Convention. All three countries are parties to the Espoo Convention and Aarhus Convention. Bosnia and Herzegovina and Montenegro are not parties to the Kiev PRTR protocol. All three countries are members of the Energy Community of South East Europe, and the Energy Community Treaty defines, inter alia, the obligations related to harmonization of regulation with the EU acquis, including the environment, renewable energy sources, energy efficiency etc. Implementation of the Energy Community Treaty has indicated that there are certain difficulties and challenges. One of the issues that also deserve attention is the fact that the three countries in the Drina River Basin do not have bilateral agreements which should regulate the issues related to water resources management. Initiatives have been launched for conclusion of bilateral agreements between Bosnia and Herzegovina and Republic of Serbia, and Bosnia and Herzegovina and Montenegro. There are similarities and differences in regard of the method of resolution of the authority in regard of performance of tasks related to water resources management. It can be estimated that the capacities of authorized institutions, as well as the coordination among them, must be improved. Organization of tasks related to water resources management, or of importance to water resources management (for instance, in the part related to waste management) at the local level requires further improvement. Financing in the water resources management sector presents a particular challenge to system functioning in all three countries. The subject of method of regulation of (potentially) open issues derived from (or which could be derived from) the conflict of methods of water use can be considered one of the general challenges to all three

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countries, with certain impact upon the modes of international cooperation among the countries in the basin. Implementation of the procedure of transboundary consultations regarding preparation and adoption of the projects that could have a transboundary impact, i.e. preparation and development of strategic documents requires, among others, the public participation. Difficulties in provision of public participation can have various causes, some of which having system-related nature and be related with the circumstances external to water resources management in the narrow sense of the word, while a part of them can also be related with the provision of conditions for consistent adherence to defined obligations of competent authorities. Without harmonization of strategic documents of importance to water resources management between countries in the region the realization of transboundary projects will not be possible. The issue of compliance of strategic documents related to water resources management, spatial planning and construction, with strategic documents in other fields, requires a considerably more intensive coordination between authorized institutions and other stakeholders. Organization of tasks related to prevention measures and reaction to emergencies related to water resources management requires a more intensive cooperation between authorized institutions. A special challenge can be posed by the manner in which the use of Drina River hydropower potential will be arranged. Construction of new hydropower structures will require the regulation of relations among stakeholder countries. The method of exploitation of existing plants' potential should also be regulated by corresponding agreements.

4.2.2 Solutions In international law are developed the rules for management of transboundary watercourses and all three countries in the region are parties to the international agreements contained certain rules of importance to these issues. Several general principles are of particular importance. The principle of equitable and reasonable utilization and participation in use of international water resources is considered an universally accepted rule, which is also explicitly stipulate by provisions of relevant international agreements. Provided is the (inexhaustible) list of criteria upon which it can be defined what constitutes an “equitable and reasonable share”. Related to this is the principle of prohibition of causing damages by the activities performed on the territory of one country to property and persons on the territory of another country, as well as certain other principles. Besides that, to the use of transboundary water resources of the countries in the Drina River Basin can also be of importance the rules of customary international law, as well as the legal practice of various international judicial and arbitration bodies. Countries in the Drina River Basin must intensify the mutual cooperation. The obligation to cooperate has a wider foundation in international law and a more detailed elaboration in international water law, also including the international agreements to which the countries in the Drina River Basin are parties. Countries located in the Drina River Basin must harmonize their strategic plans and the methods of use of common water resources in a manner that acknowledges the interests of all countries in the region. All three countries are parties to international agreements that regulate the rules of application of environment impact assessment in the transboundary context and strategic environmental impact assessment. Stakeholder countries must continue with their activities related to ratification of international multilateral agreements to which they are not parties. It is necessary to intensify activities aimed at testing of the most suitable common forms and content necessary to initiate cooperation between the institutions, i.e. to conclude regional treaty on cooperation in the field of water resource management, or certain elements of importance to water resources management (in accordance with estimated level of relevance in relation to the fact that the countries in the basin are in the same time the parties to multilateral agreements, i.e. in accordance with their estimated individual and common interests).

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In the view of the above mentioned it is necessary to initiate, i.e. intensify the activities aimed at conclusion of bilateral agreements on cooperation between the countries in the basin, there subject of regulation being the specific individual issued of interest to bilateral relations between the countries in the basin. It is necessary to further intensify the process of harmonization of country-level regulation, preparation of corresponding sub-laws in accordance with the real conditions in economy and society, building of capacity of authorized institutions and provision of conditions for a more complete implementation of regulation. Also it is necessary a consistent adherence to international agreements in the field of environmental impact assessment in the transboundary context to which the countries in the region are the parties. Bosnia and Herzegovina should ratify two amendments to the Espoo Conventions (Sofia and Cavtat). Bosnia and Herzegovina and Republic of Serbia should consider the possibilities related to ratification (acceptance, accession) of the New York Convention on the Law on Non-navigational Use of International Watercourses. In the part related to energy production, depending on the position regarding the method of regulation of international relations, it would be necessary to contractually regulate the subject of harmonization of activities directed at the construction of new and use of the existing hydropower structures. In that sense, of certain importance can be the other countries' experience in practice of resolution of the issues related to common exploitation of hydropower potential of certain watercourses, also including the subject of sharing of produced energy and other benefits coming from the common use of transboundary water resources.

4.3 Legislation in the Field of Concessions Among the legislations of Bosnia and Herzegovina (BiH), Montenegro and Republic of Serbia, which regulate the field of concessions, there is a considerable number of similarities, but there are also certain differences. Here is presented a general overview of certain similarities and differences in legislations of these three countries (method of legal regulation, the subject of legal regulation, the granting procedure, procedural elements, authority, who can be a concessionaire, period for which the concession is granted, treatment of environmental protection, institutional issues, termination of the concession, dispute resolution etc.). In the same time, one should also be aware of the fact that for the field of concessions can also be relevant an entire set of related regulations (for instance, foreign investments, foreign trade business, public-private partnership, business entities, free zones, custom duty, public procurement etc.), as well as the regulations in various other fields, especially in case of fields related with the concession subject, or a potential concession subject. 1) Regarding the method of legal regulation, it should be noted that the field of concessions is legally regulated by the law in all three countries. In Bosnia and Herzegovina there are in power three laws which regulate the field of concessions, for Bosnia and Herzegovina itself, as well as the laws at the entity level (Republic of Srpska and Federation BiH). At the same time, within Federation BiH (BiH) the field of concessions is also legally regulated by canton laws, including, for example, also the Bosnia-Podrinje canton of Goražde. In Republic of Serbia the field of concessions is legally regulated together with issues related to public-private partnership. In case of Republic of Serbia the law also envisages that, beside the issue of procedure, all other issues of importance for concession grants for an individual area or activity can be legally regulated by a special law which regulates that field or activity (Art. 11). Certain issues are in all three countries legally regulated by by-laws (mostly the method of establishment and operation of the committees, the method of determination of concession fees etc.). 2) Regarding the legal regulation of the concession subject, there are certain differences. Still it should be noted that the water resources and energy are recognized by all laws as subjects of legal regulation, in a direct and/or an indirect manner. Law of Republic of Serbia treats as "special concessions the concessions for public works and concessions for public services (Art. 10. Par. 2). A concession as a right to perform an economic activity, i.e. a right to perform an activity of public interest, is also recognized by other laws.

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3) The issue of authority for concession granting is legally regulated in a similar manner. In Bosnia and Herzegovina (at the BiH level) the competence for concession granting has a ministry or another legal authority of Bosnia and Herzegovina appointed by the Council of Ministers of Bosnia and Herzegovina to grant concessions in accordance with Article 4 Paragraph 1 (Art. 3). In Republic of Srpska (BiH) for granting of concessions from the Article 6 of this law is authorized the Government, except in case of concessions from Clause k) for which is authorized the assembly of the local authority. In exceptional cases the Government can empower the local authority also for the granting of a concession from Article 6. Paragraph 1, C. j), lj), m) and n) of this law. In Federation BiH (BiH) "all authorized ministries or governmental authorities of Federation appointed by the Federation BiH (BiH) government to grant concessions." (Art. 4). In Montenegro the grantor is the Assembly of Montenegro, Government of Montenegro, local authority, the administrative center (city) and the Metropole (municipality) (Art. 4 of the Law). In Republic of Serbia the concession grantor can be: 1) the Government, on behalf of Republic of Serbia, if the public bodies and concession subject within the authority of Republic of Serbia; 2) the Government of the autonomous province, on behalf of the autonomous province, if the public bodies and concession subject are within the authority of the autonomous province; 3) assembly of the local authority, if the public bodies and concession subject are within the competence of the local authority; 4) public enterprise, i.e. legal person authorized by special laws for concession granting (Art. 13). 4) Regarding the procedure of concession granting there are similarities and differences. In a general manner, there are two principal methods of initiation the procedure of concession granting: when the initiative comes from a competent authority and when the initiative comes from an interested person. The procedure of public advertisement, and/or tendering procedure are legally regulated in detail by all laws. a) According to the Law on Concessions of Republic of Srpska (BiH) the procedure of concession granting can be initiated based upon: 1. initiative of the competent authority; 2. initiative of the interested person and 3. a proposal in a negotiation procedure (Art. 11). The concession is granted based upon public advertisement, by the means of the so-called open procedure, two-phase procedure and summary procedure (Art. 20). Tender procedure is legally regulated by provisions of Article 23 of the Law on concessions of Federation FBiH (BiH), while the Article 28 regulates the procedure in case that the tenderer submits to the ministry a proposal for a concession for which no public tender was published (so-called unsolicited tender). Situation is similar in case of the Law on Concessions of Bosnia and Herzegovina (public request to potential tenderers and an unsolicited proposal). b) In case of Montenegro the procedure for concession grant is initiated by the competent authority by development of the concession act, in accordance with the plan listed in Article 7 of this law. The procedure can also be initiated by an interested person (Art. 17). There are three methods of concession granting based upon a public advertisement (by the means of the public competition in the open procedure, by the means of the public competition in the two-phase procedure and by the means of the public competition in the summary procedure). c) In Republic of Serbia a public body has the right to autonomously initiate the procedure for realization of a PPP project with concession elements (Art. 13), i.e. it has the right to consider and accept a proposal made by persons interested in realization of a PPP project with or without concession elements, under the condition that these proposals are not related to a project for which a procedure for granting of a public contract was initiated, or a request for proposals was published (Art. 19). After the adoption of the concession act by the competent authority, the procedure of concession granting begins by the date of publishing of a public call in the "Of. Gazette of Republic of Serbia", and is terminated by adoption of the final decision on selection of the most favourable proposal, or by adoption of the final decision on the annulment of the procedure of concession granting (Art. 33). In case that the estimated concession value should exceed 50 million Euro, a public body can decide that the procedure of concession granting can be performed in several phases.

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5) All laws make reference to a Feasibility Study (analysis) of concession grant, or a similarly titled document. 6) Criteria for selection of the most favourable proposal, i.e. proposal evaluation, are legally regulated by laws (Art. 17, Republic of Srpska (BiH), Art. 29. Montenegro, Art. 39 Republic of Serbia) and there are certain differences in the method of regulation. 7) The content of the Concession Contract is legally regulated in detail by the laws. There is a high level of similarity among them, but there are also certain differences. 8) Regarding the subject of who can be a concessionaire, the regulations in Bosnia and Herzegovina do not mention in an explicit manner the possibility of a concessionaire also being a natural person, but mention a "business subject" (Bosnia and Herzegovina), i.e. a "legal person" (Federation BiH (BiH)), i.e. a "business entity" in case of Republic of Srpska (BiH), which must be established in accordance with domestic laws. In Montenegro a concessionaire is a domestic or a foreign business entity or other legal person, an entrepreneur or natural person to which the concession was granted, a consortium or another form of business association which legally regulates the mutual relations by the means of the separate contract (Art. 4). In the Law on concessions of Republic of Serbia is mentioned a "private partner" which is "a natural of legal person, domestic or foreign…" (Art. 4). 9) Concession duration period is defined in a similar manner in all countries, although there are certain differences. There are also certain differences in regard of the possibility of prolongation of the contractual period. In Bosnia and Herzegovina there are differences among the entities. In Republic of Srpska (BiH) the Concession Contract shall be concluded for a period which cannot exceed 50 years (Art. 28). In Federation BiH (BiH) and at the Bosnia and Herzegovina level the Concession Contract shall be concluded for a period which cannot exceed 30 years, and exceptionally can be extended to 50 years (Art. 29., i.e. Art. 26). It is interesting that in the BPC Goražde (BiH) is also accepted the period of up to 50 years, except for several concession types, for which is as the period of contract conclusion envisaged the period of up to five years (Art. 28). In Montenegro are defined two periods. A period cannot exceed 30 years if the decision on concession granting is made by the Government and a municipality, nor can it exceed 60 years when the decision on concession granting is made by the Assembly (Art. 8). In case of Republic of Serbia a period for which a public contract shall be concluded shall be defined in a manner "that does not limit market competition more than it is necessary in order to allow for amortization of investment of a private partner and a reasonable return of invested assets, at the same time taking into the account the risk related with commercial use of the subject of the contract." It is, however, envisaged that the period cannot be shorter than five years and longer than 50 years, (Art. 18). However, it should be borne in mind that the Law leaves the possibility that the period for which the concession shall be granted can be defined by a special law, which regulates the field to which the concession subject belongs. 10) The issue of concession fee is in all three countries legally regulated by separate legal provisions. It is a mandatory element of the Concession Contract. Criteria for determination of the concession fee are legally regulated by by-laws (Montenegro, Republic of Srpska (BiH)). 11) Environmental protection is in a certain manner mentioned in all laws which legally regulate the field of concessions, but in a different manner and in a different context. a) The possibility of contract cessation is also envisaged by the law in Republic of Srpska (BiH) - if the performance of concession activity endangers the environment and human health or the public resources protected by the law, above the allowed and defined standards (Art. 46). Among the criteria upon which the proposals shall be evaluated, depending on the concession subject, can also be "e) environmental

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impact" (Article 17). The amount of the concession fee shall be determined upon relevant parameters, including the "ecological" ones (Art. 31), and the means coming from the concession fee shall be used, inter alia, for environmental protection (Art. 32). Concession Committee, within its authority, has the obligation to promote economical and other options for investment by the means of concessions, with consideration of the protection of economic and social interests, protection of space, population and environment (Art. 47). A similar provision is also contained in the Law on Concession of Bosnia and Herzegovina (Art. 5), i.e. the Law on Concessions of Federation BiH (BiH) (Art. 7). Envisaged is the possibility to request that the Study of economic justification shall also contain the estimations, the objective of which is environmental protection (Art. 22 – reference to the tender in case of Bosnia and Herzegovina, i.e. Art. 24 in case of Federation BiH (BiH)). In Federation BiH (BiH) the Concession Contract particularly contains, inter alia, also the "concessionaire's obligations in the field of environmental protection" (Art. 29). b) In case of Montenegro there is a possibility of concession withdrawal if "the performance of concession activity endangers the environment and human health, or the areas and structures protected by the law, what could not have been foreseen at the time of concession granting, and the measures envisaged by special laws are not sufficient to prevent that" (Art. 53). In a similar way is also legally regulated the conduct in case of "finding at the location at which a concession activity is performed" (Art. 48). The provisions related to environment are also a part of the contents of the Concession Act (Art. 19). It is envisaged that one of the criteria upon which the proposals shall be evaluated is also the "program and degree of environmental protection and measures for improvement of energy efficiency (Art. 29). The mandatory content of the Concession Contract (Art. 43) is to a certain extent related to environmental protection, unlike the law in Republic of Serbia. It is defined that the contract should contain the provisions related to: conduct of a concessionaire regarding the objects found during the use of the concession subject, which represent a historical, cultural or natural value; the obligation to rehabilitate the renewable natural resources, i.e. to perform recovery - reclamation of areas degraded by performance of a concession activity; 9) rights and obligations regarding the application of measures for provision of public safety, health protection and environmental protection, improvement of energy efficiency, as well as the responsibility for compensation of the damage caused by endangering of public safety and environmental protection. c) Only the law in Republic of Serbia envisages, in an explicit manner, that a concession can be granted also "for certain activities within the protected natural areas, as well as for the use of other protected natural resources" (Art. 11). Regarding the obligation to apply the measures for environmental protection or related to environment, the Law envisages the following: • A proposal related to a public-private partnership (PPP) project must contain, inter alia, also the "requirements in the field of environmental protection, ..." (Art. 27) • A competent public body prepares a proposal for issuing of a Concession Act "based upon economic, financial, social and other indicators and assessment of environmental impact of the concession activity (Art. 29), a proposal must also include the "data on the impact of the concession activity on environment, on infrastructure and other fields of economy, on efficient functioning of technical-technological systems" • During the development of the Feasibility Study a public body has an obligation to "especially consider", inter alia, also the "environmental impact", the "protection of environment and cultural resources" (Art. 31) • The criteria upon which the concession grantor shall base the selection of the most favourable proposal "in case of the economically most favourable proposal from the standpoint of the concession grantor, are the criteria related to the concession subject, such as, inter alia, the "ecological properties" (Art. 39).

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• Public partner can unilaterally breach a public contract "if a private partner does not apply measures and activities necessary for protection of a resource being in a public use, i.e. a public resource, for protection of nature and cultural resources" (Art. 54) • If "the performance of concession activity endangers environment and human health, and measures envisaged by special laws are not sufficient for prevention of that, in a manner and under the conditions defined by a public contract" the concession relation can be terminated by concession withdrawal (Art. 56) • The Committee for public-private partnership, which is formed by the Government, shall also include a representative of the ministry authorized for environmental affairs (Art. 65) • If a private partner should during the performance of works find any objects that represent "natural values", the law defines the obligation of this private partner to submit them to the public partner, i.e. to, under certain conditions, "terminate the works and inform about that the governmental authority authorized for tasks related to protection of historical, cultural and natural values" (Art. 73) 12) All laws (Bosnia and Herzegovina as a whole, Republic of Srpska (BiH), Federation BiH (BiH), Montenegro and Republic of Serbia) legally regulate the method of establishment and competence of the Concessions Committee. 13) Concession termination is regulated by special provisions of the laws in all three countries. a) By Article 27 of the Law on concessions of Bosnia and Herzegovina is envisaged that the Concession Contract can be ceased: a) if a concessionaire is insolvent or if it goes bankrupt, b) if a concessionaire or a grantor do not fulfil the contracted obligations. In Republic of Srpska (BiH) the Concession Contract shall terminate: a) by termination of existence of the concession subject, b) expiration of the contracted period, v) petition in bankruptcy or liquidation of a concessionaire, g) unilateral breach, d) an agreement between a grantor and a concessionaire, đ) the date of validity of the decision made by the Government on establishment of public interest for construction of structures or performance of works on the concession resource in accordance with the laws which regulate the field of expropriation, e) validity of the decision of the court by which the Concession Contract is declared void or annulated, ž) abatement, annulation or declaration of being void of the decision on selection of the most favourable tenderer and concession grant, following the conclusion of the Concession Contract, z) fulfilment of conditions defined by another law the consequence of which is the termination of the Concession Contract (Art. 45). In more detail are defined the conditions under which a grantor can unilaterally breach a contract (Art. 46). In Federation BiH (BiH) the Concession Contract is terminated: (1) by expiration of the contracted period; (2) by petition in bankruptcy for a concessionaire; (3) termination of existence of concession subject and (4) breach of Concession Contract (Art. 30). b) In case of the law in Montenegro, it is envisaged that the concession relation terminates (by cancellation of the contract, by cancellation of the contract by mutual consent and by expiration of the contracted period). There is also the possibility of "concession withdrawal" (Art. 53). c) the Law in Republic of Serbia envisages that a public-private partnership (PPP) with or without concession elements shall be terminated upon: 1) fulfilment of legal conditions; 2) breach of a public contract because of the public interest; 3) breach by mutual consent of a public contract; 4) unilateral breach of a public contract; and 5) validity of the decision of the court by which a public contract is declared void or annulated (Art. 53). Regarding the special purpose vehicle (SPV), concession relation can be terminated by concession buyout and concession withdrawal (Art. 56). 14) By provisions of the law regarding the dispute resolution related to concession relations are legally regulated, inter alia, the authority of courts and the applicable law. The authority of domestic courts is

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defined by laws of Bosnia and Herzegovina, Republic of Srpska (BiH) and Federation BiH (BiH), and the applicable law are the respective laws of these countries. The Law of Montenegro envisages that the "method of dispute resolution and application of the applicable law", shall be legally regulated by the Concession Contract (Art. 43). Arbitration, as a method of dispute resolution, is envisaged by the law in Republic of Serbia, but the arbitration with a seat abroad cannot be contracted if a private partner is a domestic legal or natural person, i.e. a consortium composed exclusively of domestic legal and natural persons (Art. 68). The courts of Republic of Serbia are exclusively authorized only if the parties have not contracted dispute resolution by arbitration. The applicable law is the law of Republic of Serbia.

4.4 Possible financing sources for the implementation of measures and recommendations For the implementation of measures and recommendations related to building of administrative and institutional capacities of the countries, as well as the measures contributing to better transposition, implementation and enforcement of the relevant EU acquis, the available pre-accession funds should be utilised, in line with the country programming documents (i.e. IPA 2 - Co-financing of Connectivity Projects in the Western Balkans). For the implementation of measures and recommendations related to construction of facilities that will be used for commercial activities, the usual funding sources would be (as stated in the main report): • International Financial Institutions loans, • Commercial bank loans, • Concessions, • Public Private Partnership and • National funds. The EU is consuming and importing increasing quantities of energy. The acknowledgement of the advantages of coordinated action in such a strategic field has led to the adoption of common rules and strategies to pool Europe’s efforts to secure the energy that it needs at an affordable price, while generating the least possible pollution. The EU thus adopted in February 2015 the Energy Union Strategy based on the three long-established objectives of EU energy policy: security of supply, sustainability and competitiveness. It is in the perspective of stronger security of supply and market integration that the EU set out in particular the target of 10% electricity interconnection by 2020, which is the minimum necessary for the electricity to flow and be traded between Member States. With the aim to extend the EU internal energy market to EU neighbouring countries in South East Europe and the Black Sea region, the Energy Community (EnC) was created in Athens in October 2005 and entered into force in July 2006. The EnC takes in particular measures to create a single energy market, its legal framework relying principally on the adoption of EU energy acquis. Adopted in October 2013, the South East Europe Energy Strategy outlines the key objectives and actions needed to create a regional energy market, as well as the investment needs for energy efficiency and renewable energy. A list of Projects of Energy Community Interest (PECIs) was subsequently adopted, identifying in particular the electricity and gas interconnections as key areas that would contribute to the Western Balkans economic development and further EU integration. In parallel, the EnC prepared a list of national soft measures to accompany these investments (third party access, unbundling, regulator independence, licensing and permitting regimes, customer switching, etc.). The EnC also flagged the regional measures necessary for the operation and development of a real regional energy market in the Western Balkans region, based on three pillars (spot market development, cross-border balancing and regional capacity allocation). The WB6 Ministerial meeting in Vienna on 2 July 2015 focused on the energy dimension of the connectivity agenda and agreed on the high priority deliverables in this sector. The Cohesion Fund allocates a total of € 63.4 billion to activities under the following categories:

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• Trans-European transport networks, notably priority projects of European interest as identified by the EU. The Cohesion Fund will support infrastructure projects under the Connecting Europe Facility; • Environment: here, the Cohesion Fund can also support projects related to energy or transport, as long as they clearly benefit the environment in terms of energy efficiency, use of renewable energy, developing rail transport, supporting intramodality, strengthening public transport etc. The European Regional Development Fund (ERDF) focuses its investments on several key priority areas. This is known as “thematic concentration”: • Innovation and research; • The digital agenda; • Support for small and medium-sized enterprises (SMEs); • The low-carbon economy. The ERDF resources allocated to these priorities will depend on the category of region: • In more developed regions, at least 80 % of funds must focus on at least two of these priorities; • In transition regions, this focus is for 60 % of the funds; • This is 50 % in less developed regions. Furthermore, some ERDF resources must be channelled specifically towards low-carbon economy projects: • More developed regions: 20%; • Transition regions: 15% and • Less developed regions: 12%.

4.5 Links to other related projects During the study of the current project, several other projects related to the Drina River Basin have been implemented, too. The Consultant monitored the activities on some of them and collaborated with the corresponding consultants as necessary. The results obtained in the current project have been further used in at least two other studies. One of them is the “Technical Assistance for the Preparation of the GEF SCCF West Balkans Drina River Basin Management Project”. The objective of this project was to assist in the preparation of the “West Balkans Drina River Basin Management Project”, also supported by the World Bank; more data on this project can be found under http://projects.worldbank.org/P145048?lang=en. Another very important project is the WBIF “Regional Strategy for Sustainable Hydropower in the Western Balkans” Project (also addressed as the “Regional Hydro Master Plan”). This project has a somewhat different objective than the present one, as it covers not only the Drina River Basin, but the entire Western Balkans, and puts more emphasis on hydropower. This is a very important perspective, as it should present viable projects to possible investors, primarily from the EU. Due to the importance of the WBIF study, the Consultant made a detailed comparison between the results produced in the framework of this project and the present DRB study. This comparison can be found in the Annex to the present report.

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4.6 Information to stakeholders According to the Inception report for the project and its communication plan several interactions with different actors have been established: • Stakeholder meetings (initial and follow up meetings) with representatives from ISRBC, State Authorities from the Riparian States, Local Authorities (Municipalities) and NGOs; • Public Meetings with broader public to be involved in the draft reports consultations and to be presented with final reports for clarifications and for knowledge sharing. A number of interaction channels have been also developed and implemented by JV Consultant throughout the project: • Public presentations held within the Drina River Basin during different stages of project development for the review and analysis of deliverables like IWRM Country Reports and IPF Country Reports for the three riparian states, Roof Report and the report on the Drina Water Management Model in WEAP, • Project website available on www.wb-drinaproject.com with deliverables published in local and English at different stages of development of documents for review and a feedback via the Web site, • Monthly reports to the Client and the core stakeholders to provide the summarized information on the project development, • Minutes of meetings from different events, presentations and meetings during the development of the project, • Minutes/reports from performance of trainings for building capacities and using the Drina Water Management model in WEAP and the hydrological model. More details about the consultations with public in different countries is provided in the Public Consultation Report available in English and local language. Public consultations, organized in all three countries, were the opportunity to discuss the results and findings from the drafts and later also from final versions of documents. The meetings also provided possibilities for stakeholders to obtain additional explanations, broader view on the topic, comparisons with similar projects elsewhere and expert opinions on water resources management. In addition, they serve for consultants as a source of valuable information, open challenges and other related issues for which they could propose suitable solutions or recommendations. The interactions with stakeholders and broader public with the number of comments received during the implementation of the project show several important points which are applicable to this project. They can be summarized as: • Due to a long period of implementation, the key stakeholders, also the Focal Points, have been changed in the riparian countries. In addition, also the composition of the Consultant’s team changed. All the changes influenced the project from the management point of view. Therefore, it is recommended that, if possible, the project’s duration shall not be further extended. • There were often requests to change decisions made during the meetings and different resolutions were taken afterwards with responsible stakeholders, which than prolonged the development of final deliverables. It is suggested that decision-making process should be stricter to avoid time consumption. • Some stakeholders decided to take part in the project only at later phases and they also open again a number of questions which were assumed to be already resolved. Also, as they came late, they are not familiar with boundary conditions for the project. Therefore, it is proposed to promote

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similar projects at the start more intensively to a very broad public to avoid delays due to newcomers. • The time available for reviewing of the reports by the stakeholders was often not taken into account and consequently the remarks and comments were not provided to the Consultant team in time. It is recommended to take all these findings into account and to invent the countermeasures to mitigate the consequences in the similar future projects. It is also clear that to agree on compromise solutions is sometimes quite difficult in the region which is also burdened with so much historical heritage.

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5 Conclusions and recommendations

5.1 Conclusions This report represents a snapshot of the complex and integrated use, development and management of water resources in the Drina River Basin, required in order to meet the water needs of multiple users and harmonization of their needs in the future. This report, together with the earlier IWRM and IPF Country Reports, can enable further improvement of the water resources management of the DRB in the three riparian countries (Republic of Serbia, Bosnia and Herzegovina – Federation BiH and Republic of Srpska - and Montenegro) for the foreseeable future. The objectives of the development scenarios mentioned in this report are to protect, restore and enhance surface water bodies and groundwater in order to at least achieve their “good” status, thus upholding the principles of the WFD, and to thereby provide sufficient water for unhindered and sustainable development of society in general in a sustainable environment. In this respect, it is important to complete the WFD transposition and implementation in all three countries. It is important to emphasize the need for construction of reservoirs in the basin and their incorporation into the planning documents. In order to implement the proposed solutions in the future, it is necessary to reserve and allocate adequate space in the current cadastral and spatial plans; this should also include potential reservoir sites that are not yet a priority in the basin. These areas should have some form of protected status akin to that of the natural resources, so that their development is assured against future pressures on space from other needs for construction and other anthropogenic activities. Since the current flood control systems in the Drina River Basin are not complete and may not be satisfactory in the view of the current and future flood hazard and risk levels, the future development should consider upgrading of the existing protection infrastructure. With the cascades of reservoirs planned along the Drina River, the downstream flood risk level would increase unless an integrated river basin management is applied, and particularly unless the consensus between the water and hydropower sectors is achieved. It must also be taken into account that it is necessary to implement a more restrictive policy regarding land use planning in flood-prone areas. Besides, there is a critical need to build wastewater treatment plants (WWTP) and to improve the solid waste management to give Drina River and its tributaries a chance to improve their water quality status. Considering the substantial financial investments for achieving this, it needs to be undertaken in stages. Regarding the construction of new HPPs in the DRB, Section 2.3 lists the projects included in the most favourable development scenario, along with additional explanations, necessary for the proper understanding of the results obtained by MCA, integrating economic, environmental and social criteria. In the conclusions, the Consultant would also like to comment upon these results from a different point of view, which transcends the former Country Reports. It is important to note that four of all HPPs included in the selected integral development scenario for the Drina River basin (“Dubravica” HPP, “Tegare” HPP, “Rogačica” HPP and “Kozluk” HPP) represent a hydropower potential that has to be shared between Republic of Serbia and Bosnia and Herzegovina (they are located at the territory of Republic of Srpska). The Consultant believes that the most reasonable solution for construction of these HPPs would be the joint effort of investors from both countries, as an “asymmetric” construction could lead to a number of problems. The improvement to the monitoring network in the DRB requires a number of measures, including improvements to the existing stations, establishment of new ones (with an emphasis on locations that already hosted measurement stations in the past) and improvements to data exchange in the DRB. Considerable financial means are already available from the budgets of a number of institutions involved in measurements in the DRB, some means will be provided within the WBRDBM project, but the countries in the basin should make an additional effort and provide additional funds for completion of this activity.

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5.2 Recommendations As discussed in Section 2.3, many recommendations have been provided on the DRB through the preparation of the three IWRM and IPF Country Reports. The Roof Report focuses on the main recommendations associated with the Basin development scenarios. Based upon the above conclusions, the recommendations are the following. In terms of flood control, the Consultant recommends: ▪ That water management operations within the DRB should seriously consider weather forecasting techniques in their future planning, ▪ That HPP operation and discharging should be coordinated between the riparian countries to mitigate sediment-negative impacts and flood peaks, ▪ That flood control should be managed at the basin scale and should be coordinated with the environmental protection, hydropower sector and land use planning. In terms of climate change adaptation measures, the Consultant recommends to: ▪ Undertake revision and improvement of the monitoring system across the basin to enable better detection of the impact of climate change, ▪ Undertake continuous vulnerability surveys in relation to climate change across the Basin in respect to hydrologic regime and all water-related sectors, ▪ Raise public awareness within the Basin’s stakeholders regarding potential impacts associated with climate change and undertake education and training programs in adaptation measures especially regarding water use and water saving measures. Based upon the outcome of the MCA, the Consultant recommends prioritizing investigations into the feasibility of undertaking selected development scenarios. This will require at least the following: ▪ Improvement and harmonization of the legislation enforcement related to the environment protection and implementation of the ESIA procedure; ▪ Undertaking a full public consultation process advocating the preferred schemes; ▪ Undertaking a detailed feasibility, EIA and SIA of individual schemes advocated as part of selected scenario; ▪ Selecting and imposing a set of environmental and social mitigation measures of each individual scheme to reduce at minimum the impacts during construction and operation phases; ▪ Imposing a harmonized minimal flow for each new water intake and controlling its efficiency; ▪ Avoiding reservoir construction and hydro-peaking in the areas known as spawning sites of Danube Salmon; ▪ For the selected scenario, devising of a year-by-year identification of the projects to be completed and clear demonstration of the differences between the recommended scenario and the baseline plans. In terms of hydropower development, the Consultant recommends: • Undertaking of baseline capacity expansion plan to define the opportunities for development of new hydropower investments; • Prioritization of investigations into the feasibility of undertaking the selected development scenario; • Following the integral development scenario proposed based on optimal scenarios for all three countries defined by results obtained by MCA analyses. Because all HPPs that were analysed within scenarios formulated per countries are integral parts of valid planning documentation, which is an

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important prerequisite, there are possibilities for them to become more attractive under changed conditions. The technical documentation developed for certain HPPs is not at the level necessary for final decision making. Therefore, further development of technical documentation for all HPPs on at least the Preliminary Design Report level, assessed in corresponding IPF CRs, is recommendable. • Resolution of hydropower potential sharing issues - the selected development scenarios include the construction of HPPs which can be considered reasonably feasible. However, there remains the problem of the hydropower potential that has to be shared between the Republic of Serbia and Bosnia and Herzegovina (they are located at the territory of Republic of Srpska). It is therefore recommended that all involved parties should harmonize their interests regarding the construction of the HPPs that produce electricity based upon the shared potential. • Inclusion of “Bistrica” PSHPPs and “Buk Bijela” PSHPP into further projects that should follow this one is recommendable especially taking into account that they were included into various planning and strategic documents in power in Republic of Serbia and BiH. • Familiarization of governments and stakeholders with estimates of what might be gained from carbon finance and with the necessary studies to secure such financing. In terms of future monitoring within the Basin, the Consultant recommends: • Data exchange with an hourly time step as the general objective of network development; • Consideration of alternative monitoring techniques such as radar and satellite observations to provide integrated basin monitoring and harmonized input for modelling and assessments; • Establishment and harmonization of information system and monitoring of water quality status indicators for surface water and quality and quantity status indicators for groundwater; • Monitoring of the aquatic and alluvial ecosystems; • Increasing and improving the sediment monitoring (Suspended Sediment Concentration, bedload measurements in specific river cross-sections, sediment quality); • Empowering water management authorities to collect all relevant data related to all water uses from all economic sectors as a prerequisite for effective water management; In terms of water management concerns, the Consultant recommends: • There is a need to accelerate the implementation of existing sub-laws and standards and harmonize the existing secondary legislation, including guidelines and standards. • Stakeholders need to maintain the efforts to improve: - The solid wastes management with adequate sanitary landfills construction, sanitation of existing landfill and industrial tailings/dump sites as well as increasing the part of recycling waste. - The removal of illegal municipal and industrial solid waste landfills near rivers. • Stakeholders need to make concerted efforts to carry on the construction of WWTPs in the DRB with prioritization from the larger settlements toward the smaller ones. In all three countries this requires legal, institutional and operational measures related to the efficiency and performance of public utility companies responsible for sustainability of wastewater systems. • To focus effort on: - Improvement of the fish farming process (as built of nutriment precipitators), - Reduction of pollution from agriculture activities: strengthening of the use of insecticides and pesticides, - Reduction of pollution from industrial activities in accordance with the relevant legislation.

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• To strengthen the establishment and protection of water supply sources. • The harmonization of the methodology to estimate the minimal EF and integration of environmental and HPP characteristics to adopt this minimal value. • The mitigation of drought with water from HPP reservoirs. • Strengthening harmonization for managing the aquatic ecosystems, including the inquiries related to fish passes and fish restocking. • The harmonization and efficient regulation for managing the sediment extractions. • The protection and restoration of the riparian vegetation along rivers especially along smaller tributaries in order to prevent soil erosion, filter pollution and prevent floods. In terms of transboundary cooperation, the Consultant recommends: • It is very important that the three countries establish an official agreement to guarantee a strong cooperation for the sustainable development, protection and water management of the DRB. • Transboundary cooperation among the riparian countries will be needed for the purpose of maintaining and further developing the water resources management (WRM) model for DRB, developed within this project using the WEAP software. Upon the project finalization, the countries will have to exchange data and information needed for model application to enable its sensible use. Harmonization of the model structure and input data is a necessity for Bosnia and Herzegovina and Republic of Serbia. Although Montenegro could maintain the model independently from the other two countries, its contribution to the downstream model users is of the utmost significance. Separate model application and development by the riparian countries would not support an integrated approach to water management in the basin. It is therefore highly recommended that the countries develop a protocol for exchange of data and information related to WRM model of DRB. Cooperation on the exchange can take various forms. The simplest form would be that the model files are exchanged annually, and that rotation of countries in charge of harmonizing the input data occurs every three years. Occasional meetings on the technical level, with participation of stakeholders’ staff actually maintaining the model, would also be beneficial. • Consideration of a possibility to intensify the activities directed at the conclusion of bilateral agreements on cooperation in the field of water resources management among the countries in the Drina River Basin (certain stakeholders, including the AVP Sava, Sarajevo, agree with this initiative and even denote it as one of the highest priorities for the future).

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6 List of References Bosnia and Herzegovina:

AR5, 2014. Fifth Assessment Report (AR5). International Panel of Climate Change. http://www.ipcc.ch/report/ar5/ Dankers, R., et al., 2013: First Look at Changes in Flood Hazard in the Inter-Sectoral Impact Model Intercomparison Project ensemble. Proceedings of the National Academy of Sciences of the United States of America. 111(19): 3257–3261. COWI. 2012, Update of the Basis for the Water Resources Management of the River Basin, World Bank – Module 1 – Hydrological and Water Resources Assessment. COWI. 2012, Update of the Basis for the Water Resources Management of the Vrbas River Basin, World Bank – Module 2 – Hydropower Development Study COWI. 2012, Update of the Basis for the Water Resources Management of the Vrbas River Basin, World Bank – Module 3 – Integrated Water Resources Management Assessment COWI 2016 - SERBIA – IWRM STUDY AND PLAN EU Delegation to BiH (2012): The European Union supports ecotourism development in the . http://europa.ba/?p=19571 IPCC (2014) Flato, G., J. Marotzke, B. Abiodun, P. Braconnot, S.C. Chou, W. Collins, P. Cox, F. Driouech, S. Emori, V. Eyring, C. Forest, P. Gleckler, E. Guilyardi, C. Jakob, V. Kattsov, C. Reason and M. Rummukainen, 2013: Evaluation of Climate Models. In: Climate Change 2013: The Physical Science Basis. Contribution of Working Group I to the Fifth Assess¬ment Report of the Intergovernmental Panel on Climate Change [Stocker, T.F., D. Qin, G.-K. Plattner, M. Tignor, S.K. Allen, J. Boschung, A. Nauels, Y. Xia, V. Bex and P.M. Midgley (eds.)]. Cambridge University Press, Cambridge, United Kingdom and New York, NY, USA. Implementation program of the Spatial Plan of RS 2010-2020, GRS, 2011. Liquid Art Productions (2014): The Story of a Danube Salmon. Nature documentary. http://liquid- art.net/#/category/the-story-of-a-danube-salmon Main service for the audit of public sector of the Republic of Srpska (2013): Report on the audit of financial reports of the Ministry of Spatial Planning, Civil Engineering and Ecology of the Republic of Srpska for the period 01.01- 31.12.2012., Number: RV018-13. http://www.gsr-rs.org/static/uploads/report_attachments/imported/RI018- 13_Lat.pdf Milly, P.C.D. and K.A. Dunne, 2011: On the Hydrologic Adjustment of Climate Model Projections: the Potential Pitfall of Potential Evapotranspiration. Earth Interactions, 15 (1): 1-14. Petronić, S., Kadić, J., Srndović, R. and Kovačević, D. (2009): Integrativna zaštita u Nacionalnom parku "Sutjeska". Zbornik Druge i Treće konferencije o integrativnoj zaštiti. Republički zavod za zaštitu kulturno-istorijskog i prirodnog nasljeđa Republike Srpske. Banjaluka Riahi et al., 2011. RCP 8.5—A scenario of Comparatively High Greenhouse Gas Emissions. Climatic Change.109:33– 57. SEI (2015) WEAP – Water Planning and Evaluation System, User Guide, Stockholm Environment Institute. www.weap21.org Stojković M., Jaćimović N., 2016. A Simple Numerical Method for Snowmelt Simulation Based on the Equation of Heat Energy,Water Science & Technology 73(7):1550-1559. Tomson et al., 2011. RCP4.5: A Pathway for Stabilization of Radiative Forcing by 2100. Climatic Change (2011) 109:77–94. www.nezavisne.com (2011): U Drinu ubačeno 35.000 mlađi pastrmke. www.058.ba (2014): Poribljavanje u Foči. http://058.ba/2014/09/drina-poribljena-sa-oko-16-000-jedinki-mladi- pastrmke/ www.rtrs.info (2014): Poribljavanje Drine kod Višegrada. http://www.rtrs.info/vijesti/vijest/poribljavanje-drine- kod-visegrada-113704 www.zelenasrbija.rs (2012): Srbija i Republika Srpska zajedno poribljavaju Drinu. http://zelenasrbija.rs/fullregion/1561-srbija-i-republika-srpska-zajedno-poribljavaju-drinu Water Management Strategy of the Danube River Basin, Draft version, IJC, 2014. Strategy of Integrated Water Management in Republic of Srpska 2015-2024, 2016. Spatial Plan of Republic of Srpska by 2025.,2015.

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Montenegro:

Analitika, Which parts of the territory will be included on the new Regional Park Komovi?, October 15 2014: http://portalanalitika.me/drustvo/vijesti/165771-koje-djelove-teritorije-obuhvata-novi-regionalni-park-komovi - On line information website Anon, (2003): Guidance on Monitoring for Water Framework Directive. CIS Work group 2.7. Biodiversity, Strategy and Action Plan, 2009 BirdLife International: http://www.birdlife.org/  see the map of the IBAs in BiH, Serbia and Montenegro Blečić V. (1958): Šumska vegetacija i vegetacija stena i točila reke Pive. Glasnik Prirodnjačkog muzeja u Beogradu B11, 5 -110. Bogdanović, S. & Dabić, Lj. 2005. Usklađivanje propisa Crne Gore o zaštiti životne sredine sa zahtjevima Evropske Unije [Harmonization of the Montenegrin Environmental Legislation with the Requirements of EU]. Espoo: Ramboll – Finnconsult; Stockholm: Ramboll – Natura; Beograd: REC; Podgorica: Ministarstvo zaštite životne sredine i uređenja prostora Republike Crne Gore. Brilly M., Šraj M, Vidmar A., Primožič M., Koprivšek M. and Kavčič K., 2013. Pilot project on climate change: Component A3: Compilation of various existing climate change scenarios for the region, their expected impacts on water cycle and more specifically on frequency and magnitude of extreme flood events, Part 2: Climate change impact on flood discharge of the Sava River, Hydrology report, International Sava River Basin Commission. CIS (2003a) Common Implementation Strategy for the Water Framework Directive (2000/60/EC), Guidance document No. 2, Identification of Water bodies. European Communities, Luxembourg CIS (2003b) Common Implementation Strategy for the Water Framework Directive (2000/60/EC), Guidance Document No. 9, Implementing the Geographical Information System Elements (GIS) of the Water Framework Directive. European Communities, Luxembourg CIS (2009a) Common Implementation Strategy for the Water Framework Directive (2000/60/EC), Guidance Document No. 21, Guidance for reporting under the Water Framework Directive. Technical Report-2009-029. European Communities, Luxembourg CIS (2009b) Common Implementation Strategy for the Water Framework Directive (2000/60/EC), Guidance Document No. 22, Updated Guidance on Implementing the Geographical Information System (GIS) Elements of the EU Water policy. Technical Report-2009-028. European Communities, Luxembourg COWI. 2012, Update of the Basis for the Water Resources Management of the Vrbas River Basin, World Bank – Module 1 – Hydrological and Water Resources Assessment. COWI. 2012, Update of the Basis for the Water Resources Management of the Vrbas River Basin, World Bank – Module 2 – Hydropower Development Study COWI. 2012, Update of the Basis for the Water Resources Management of the Vrbas River Basin, World Bank – Module 3 – Integrated Water Resources Management Assessment COWI 2016 - MONTENEGRO – IWRM STUDY AND PLAN Cross Border Program Serbia and Montenegro. Oct 2014, Through Geographic Information System Towards Better Cross-Border Flood Risk Management in the Lim River Basin, Water Management Montenegro and JVP Srbijavode - European Union funding. Dan (2015): Ribolov uvrstiti u turističku ponudu. http://www.dan.co.me/?nivo=3&rubrika=Lov%20i%20ribolov&clanak=469738&najdatum=2015-01- 03&datum=2015-01-17&naslov=Ribolov%20uvrstiti%20uturisti%E8ku%20ponudu Draft Strategy for Water Management in Montenegro 2016 – 2035, 2016. EC 2014. Montenegro 2015 Progress Report, Enlargement Strategy and Main Challenges 2014-2015, European Commission, Brussels, 8.10.2014, http://ec.europa.eu/enlargement/pdf/key_documents/2014/20141008- montenegro-progress-report_en.pdf EEA. 2010. Environmental trends and perspectives in the Western Balkans: future productions and consumption patterns, EEA Report, No. 1/2010, European Environment Agency. Copenhagen. Energy Balances bulletins for 2010, 2011, 2012 and 2013 (Republican Statistical Agency of Serbia); Environmental Performance Review (EPR)-Montenegro, 2015, Third Review, UNEC for Europe Elektroprivreda Crne Gore (2013): Poziv za javnu nabavku br.17/13. http://www.epcg.com/sites/epcg.com/files/17- 13.pdf EPA, State of the Environmental Report of Montenegro 2013 and EPA website Godišnji izvještaj o stanju u oblasti vodosnabdjevanja, upravljanju otpadom i otpadnim vodama, realizaciji prioritetnih aktivnosti u komunalnoj djelatnosti sa predlogom prioritetnih projekata za izgradnju komunalne

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infrastructure i predlogom mjera, Ministartvo održivog razvoja i turizma, Podgorica, mart 2015 IPCC (2014) Flato, G., J. Marotzke, B. Abiodun, P. Braconnot, S.C. Chou, W. Collins, P. Cox, F. Driouech, S. Emori, V. Eyring, C. Forest, P. Gleckler, E. Guilyardi, C. Jakob, V. Kattsov, C. Reason and M. Rummukainen, 2013: Evaluation of Climate Models. In: Climate Change 2013: The Physical Science Basis. Contribution of Working Group I to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change [Stocker, T.F., D. Qin, G.-K. Plattner, M. Tignor, S.K. Allen, J. Boschung, A. Nauels, Y. Xia, V. Bex and P.M. Midgley (eds.)]. Cambridge University Press, Cambridge, United Kingdom and New York, NY, USA. Local Solid Waste Management Plan 2010-2014 for Berane Municipality (OG 34/10). Local Solid Waste Management Plan 2016-2020 for Berane Municipality, Draft version, Berane, 2016. Ministry of Agriculture and rural development (2007): Poziv za javnu nabavku br.05/07. http://www.minpolj.gov.me/pretraga/64144/114845.html National Strategy of Sustainable Development of Montenegro, 2007 National Solid Waste Management Plan in Montenegro 2015-2020. Program pristupanja Crne Gore Evropskoj uniji 2015 – 2018, Februar 2015. http://www.gov.me/sjednice_vlade/98 Radio Televizija Crne Gore (2013): Poribljeno Pivsko jezero. http://www.rtcg.me/vijesti/drustvo/17206/poribljeno- pivsko-jezero.html Republic-level Solid Waste Strategic Master Plan, Gopa, 2005. Revision of the National Waste Management Strategy 2014-2020 and National Waste Management Plan 2014- 2020, Dvoper d.o.o - UNDP, 2015. Screening report Montenegro Chapter 27 – Environment and climate change, 28 November 2013. http://ec.europa.eu/enlargement/pdf/montenegro/screening_reports/screening_report_montenegro_ch27.pdf Studija o ocjeni potrebe revizije Strateškog Master plana za upravljanje otpadom u Crnoj Gori, Erico, 2011 Strategy Proposal for Solid Waste Management in Montenegro by 2030, MSDT, 2015 State Audit Institution (2015): A report on the audit of the Annual Financial Report of "Public Enterprise for National Parks of Montenegro", number 40115 – 052 – 531/34, October 2015, Podgorica. http://www.dri.co.me/1/doc/Izvje%C5%A1taj%20o%20reviziji%20Godi%C5%A1njeg%20finansijskog%20izvje%C5% A1taja%20Javno%20preduze%C4%87e%20za%20nacionalne%20parkove%20Crne%20Gore%20- %20Podgorica%20za%202014.%20godinu.pdf, Spatial Plan of Montenegro until 2020, (OG 24/08). Strategic Master plan for waste water in the Central and North region – Montenegro, 2005. Water Resources Management Plan of Montenegro, PC Podgorica Waterworks and sewerage and Institute for the Development of Water Resources “Jaroslav Cerni”, Belgrade, 2001 UNDP (2016): Economy and environment in Montenegro. http://www.me.undp.org/content/montenegro/en/home/operations/projects/economyandenvironment.html Vijesti (2015a): Fabrika riblje mlađi u blizini Plužina propada. http://www.vijesti.me/vijesti/fabrika-riblje-mladi-u- blizini-pluzina-propada-815644 Vijesti (2015b): Država zaštitila Pivu: Park prirode na 32.840 hektara. http://www.vijesti.me/vijesti/drzava-zastitila- pivu-park-prirode-na-32840-hektara-830001

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Republic of Serbia:

Anon, (2003): Guidance on Monitoring for Water Framework Directive. CIS Work group 2.7. AR5, 2014. Fifth Assessment Report (AR5). International Panel of Climate Change. http://www.ipcc.ch/report/ar5/ Dankers, R., et al., 2013: First Look at Changes in Flood Hazard in the Inter-Sectoral Impact Model Intercomparison Project ensemble. Proceedings of the National Academy of Sciences of the United States of America. 111(19): 3257–3261. Brilly M., Šraj M, Vidmar A., Primožič M., Koprivšek M. and Kavčič K., 2013. Pilot project on climate change: Component A3: Compilation of various existing climate change scenarios for the region, their expected impacts on water cycle and more specifically on frequency and magnitude of extreme flood events, Part 2: Climate change impact on flood discharge of the Sava River, Hydrology report, International Sava River Basin Commission. CIS (2003a) Common Implementation Strategy for the Water Framework Directive (2000/60/EC), Gudance document No. 2, Identification of Water bodies. European Communities, Luxembourg CIS (2003b) Common Implementation Strategy for the Water Framework Directive (2000/60/EC), Guidance Document No. 9, Implementing the Geographical Information System Elements (GIS) of the Water Framework Directive. European Communities, Luxembourg CIS (2009a) Common Implementation Strategy for the Water Framework Directive (2000/60/EC), Guidance Document No. 21, Guidance for reporting under the Water Framework Directive. Technical Report-2009-029. European Communities, Luxembourg CIS (2009b) Common Implementation Strategy for the Water Framework Directive (2000/60/EC), Guidance Document No. 22, Updated Guidance on Implementing the Geographical Information System (GIS) Elements of the EU Water policy. Technical Report-2009-028. European Communities, Luxembourg COWI. 2012, Update of the Basis for the Water Resources Management of the Vrbas River Basin, World Bank – Module 1 – Hydrological and Water Resources Assessment. COWI. 2012, Update of the Basis for the Water Resources Management of the Vrbas River Basin, World Bank – Module 2 – Hydropower Development Study COWI. 2012, Update of the Basis for the Water Resources Management of the Vrbas River Basin, World Bank – Module 3 – Integrated Water Resources Management Assessment COWI 2016 - SERBIA – IWRM STUDY AND PLAN Cross Border Program Serbia and Montenegro. Oct 2014, Through Geographic Information System Towards Better Cross-Border Flood Risk Management in the Lim River Basin, Water Management Montenegro and JVP Srbija Vode - European Union funding. EEA. 2010. Environmental trends and perspectives in the Western Balkans: future productions and consumption patterns, EEA Report, No. 1/2010, European Environment Agency. Copenhagen. eKapija Business portal (2016): Nacionalni park Sutjeska Tjentište - Foča. Delivered Services. http://www.ekapija.com/website/bih/company/relatedArticles.php?cmp=97343§ion=3&role=1 Eptisa (2015a) Plan upravljanja oblasnim riječnim slivom rijeke Save Republike Srpske, Prateći dokument br. 4: Podzemne vode. Implementation program of the Spatial Plan of RS 2010-2020, GRS, 2011. http://www.nezavisne.com/novosti/drustvo/U-Drinu-ubaceno-35000-mladji-pastrmke/111886 IPCC (2014) Flato, G., J. Marotzke, B. Abiodun, P. Braconnot, S.C. Chou, W. Collins, P. Cox, F. Driouech, S. Emori, V. Eyring, C. Forest, P. Gleckler, E. Guilyardi, C. Jakob, V. Kattsov, C. Reason and M. Rummukainen, 2013: Evaluation of Climate Models. In: Climate Change 2013: The Physical Science Basis. Contribution of Working Group I to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change [Stocker, T.F., D. Qin, G.-K. Plattner, M. Tignor, S.K. Allen, J. Boschung, A. Nauels, Y. Xia, V. Bex and P.M. Midgley (eds.)]. Cambridge University Press, Cambridge, United Kingdom and New York, NY, USA. Liquid Art Productions (2014): The Story of a Danube Salmon. Nature documentary. http://liquid- art.net/#/category/the-story-of-a-danube-salmon Main service for the audit of public sector of the Republic of Srpska (2013): Report on the audit of financial reports of the Ministry of Spatial Planning, Civil Engineering and Ecology of the Republic of Srpska for the period 01.01- 31.12.2012., Number: RV018-13. http://www.gsr-rs.org/static/uploads/report_attachments/imported/RI018- 13_Lat.pdf Milly, P.C.D. and K.A. Dunne, 2011: On the Hydrologic Adjustment of Climate Model Projections: the Potential Pitfall of Potential Evapotranspiration. Earth Interactions, 15 (1): 1-14. Ministry of Agriculture and Environmental Protection (2014): Poribljavanje reke Drine mladicom.

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http://www.eko.minpolj.gov.rs/poribljavanje-reke-drine-mladicom/?lang=lat National Environmental Strategy of Serbia, (OG 12/2010). Norwegian Embassy in Belgrade (2014): Battle for green Tara Mountain. http://www.norveska.org.rs/News_and_events/News-and-events1/Battle-for-green-Tara- Mountain/#.WBEO2XV97_g NP Tara (2010): The report on the realization of management program for 2010. http://www.nptara.rs/images/download/izvestaj_program_2010.pdf NP Tara (2011): The report on the realization of management program for 2011. http://www.nptara.rs/en/images/download/izvestaj_o_realizaciji_programa_upravljanja.pdf NP Tara (2012): The report on the realization of management program for 2012. http://www.nptara.rs/images/download/2016/IZVESTAJ%202012%20.pdf NP Tara (2013): The report on the realization of management program for 2013. http://www.nptara.rs/images/download/2016/IZVESTAJ%202013.pdf NP Tara (2014): The report on the realization of management program for 2014. http://www.nptara.rs/images/download/2016/IZVESTAJ%202014%20doc.pdf NP Tara (2015): The report on the realization of management program for 2015. http://www.nptara.rs/images/download/2016/izvestaj%202015.pdf Petronić, S., Kadić, J., Srndović, R. and Kovačević, D. (2009): Integrativna zaštita u Nacionalnom parku "Sutjeska". Zbornik Druge i Treće konferencije o integrativnoj zaštiti. Republički zavod za zaštitu kulturno-istorijskog i prirodnog nasljeđa Republike Srpske. Banjaluka Regional Spatial Plan of the Kolubarsko-Mačvanski Region (OG 11/15). Regional Spatial Plan of the Zlatiborsko-Moravički Region (OG 1/2013). Regional Waste Management Plan for the Zlatiborsko-Moravički Region, 2011. Regional Waste Management Plan for Municipalities Prijepolje, Nova Varoš, Priboj and Sjenica, 2011. Riahi et al., 2011. RCP 8.5—A scenario of Comparatively High Greenhouse Gas Emissions. Climatic Change.109:33– 57. Stojković M., Jaćimović N., 2016. A Simple Numerical Method for Snowmelt Simulation Based on the Equation of Heat Energy, Water Science & Technology 73(7):1550-1559. SEA of the Water Management Strategy of the Danube River Basin, Draft version, IAUS, 2015. Spatial Plan of Republic of Serbia 2010-2020, (OG 88/2010). SEI (2015) WEAP – Water Planning and Evaluation System, User Guide, Stockholm Environment Institute, www.weap21.org Special Nature Reserve “Uvac” (2014): The report on the realization of management program for 2014:. http://www.uvac.org.rs/dokumenti/2.%20Izvestaj%20o%20radu%20za%202014..doc Special Nature Reserve “Uvac” (2015): The report on the realization of management program for 2015. http://www.uvac.org.rs/dokumenti/Izvestaj%20o%20radu%20za%202015!!!.doc Spatial plan of Republic of Srpska until 2025 Website: http://www.vladars.net/sr-SP-Cyrl/Vlada/Ministarstva/mgr/Documents/) State Audit Institution of Republic of Serbia (2012): The report on the financial statements and operating correctness of the Nature Park "Nature park Mokra gora doo" for 2011. file:///home/kostoberina/Desktop/4_ppmg2011.pdf Strategy for integral water management in Republic of Srpska (2015-2024) Tomson et al., 2011. RCP4.5: A Pathway for Stabilization of Radiative Forcing by 2100. Climatic Change (2011) 109:77–94. UNDP (2016): UNDP in Serbia. http://www.rs.undp.org/content/serbia/en/home/operations/projects/overview.html Vlada Republike Srbije/Government of Republic of Serbia (2014) Strategija poljoprivrede i ruralnog razvoja Republike Srbije za period 2014–2024 (Strategy of Agriculture and Rural Development in the Republic of Serbia for 2014–2024), Sl. glasnik RS/Official Gazette, 85/2014. Waste Management Strategy 2010-2019, (OG 29/10). Water Management Strategy of the Territory of the Republic of Serbia 2016-2034, 2016. Water Management Strategy of the Danube River Basin, Draft version, IJC, 2014. www.nezavisne.com (2011): U Drinu ubačeno 35.000 mlađi pastrmke. www.058.ba (2014): Poribljavanje u Foči. http://058.ba/2014/09/drina-poribljena-sa-oko-16-000-jedinki-mladi-

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pastrmke/ www.rtrs.info (2014): Poribljavanje Drine kod Višegrada. http://www.rtrs.info/vijesti/vijest/poribljavanje-drine- kod-visegrada-113704 www.zelenasrbija.rs (2012): Srbija i Republika Srpska zajedno poribljavaju Drinu. http://zelenasrbija.rs/fullregion/1561-srbija-i-republika-srpska-zajedno-poribljavaju-drinu

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7 ANNEX: Hydropower projects in the Drina River Basin - a comparison of results

1. Introduction The purpose of this document is to compare certain results produced within the following two Projects: ➢ Support to Water Resources Management in the Drina River Basin (hereinafter: the DRB Project) and ➢ Regional Strategy for Sustainable Hydropower in the Western Balkans (hereinafter: the Master Plan Project). The DRB Project was implemented by the JV composed of COWI, Stucky and the Jaroslav Černi Institute for the Development of Water Resources. The territory analysed within this project was the Drina River Basin. The final report prepared on this project was the Roof Report, presented in December 2017 in Belgrade, Serbia. The Master Plan Project was implemented by the consortium composed of Mott MacDonald and IPF. The territory analysed within this project was Western Balkans. The final report prepared on this project was the Final Report, presented in December 2017 in Tirana, Albania. In this overview will be compared only the results related to hydropower plants common to both projects, i.e. the HPP projects within the Drina River Basin.

2. Hydropower project rating Within the Master Plan Project all analysed HPP projects have after MCA – level 2 analyses projects evaluation been classified into: ➢ Group A – HPP candidates with good comparative performance among the assessed HPPs, i.e. the candidates with the MCA score above a defined MCA Level 2 threshold; ➢ Group B – HPP candidates with moderate comparative performance against the MCA indicators; i.e. the candidates with the MCA score below the MCA Level 2 threshold; ➢ Group C – HPP candidates which underperformed against the key MCA indicators, i.e. the candidates that scored below MCA Level 1 threshold; ➢ Group 0 – HPP candidates which were not analysed, due to insufficient data. Within the DRB Project, the projects that were considered important by the stakeholders, i.e. which passed the initial “filtering” stage, were organized into several scenarios such that: ➢ The maximum scenario included all projects that passed the “filtering” stage and ➢ Represented reduced scenarios included subsets of the maximum scenario, containing only the HPP projects considered especially prospective by the stakeholders. One of the reasons for different grouping of HPP projects was that the Master Plan Project focused primarily on hydropower, while the DRB Project treated a wider set of water resources management benefits, hydropower being only one of them. Within the Master Plan Project HPP projects have been classified into the following groups, based on the Final Expert Assessment of MCA Results:

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➢ Recommended projects - The highest-ranking HPP cascades or individual HPPs evaluated as comparatively the best among all evaluated projects. o These HPP projects are more likely to successfully pass the development process and to be implemented. o These HPP projects could be the priority projects for technical assistance and other financial support by EU institutions. o These HPP projects could be used as showcases of transparent and sustainable development process in accordance with EU best practices. HPP projects that successfully pass the required development process would then be implemented. ➢ Reasonably good projects - The HPP cascades or individual HPPs that scored lower compared to the recommended HPP projects o These HPP projects should not be dismissed from future considerations by EU institutions but have relatively lower assessment score compared to recommended HPP projects. ➢ Underperforming projects – HPP projects that were not assessed in MCA Level 2, because o HPP candidates did not pass MCA Level 1 threshold, o They are cascades where the majority of constituting HPP candidates have capacity lower than 10 MW and were not evaluated in MCA Level 1, or o Input data are evidently questionable, which indicates that the MCA results and scoring are unreliable. o These HPP projects are not suitable candidates for priority development activities because they underperformed in one or several assessed criteria. ➢ Tentative projects – HPP projects that scored well in MCA Level 2, but have significant issues identified that could not have been captured in the MCA parameters. o Tentative HPP projects in many aspects have good potential for future development, given that the identified significant issues are resolved. ➢ Reversible HPP candidates o Reversible HPP projects do not contribute to the overall energy generation; however, they have a very important role in balancing the system, particularly with the increasing share of renewables. Within the DRB Project, the optimum scenario was selected among the proposed ones, and the hydropower projects grouped within it could be considered the recommended ones. The HPP projects belonging to other scenarios could be considered worth consideration, but not the optimal ones.

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3. Comparison of results 3.1 Overview Hydropower projects in the DRB recommended within the Master Plan Project are given in the table below. Project name Country Capacity MCA MCA2 score (MW) Foča BiH 44.2 A 52.3 Paunci BiH 43.2 A 55.9 Buk Bijela BiH 93.5 A 52.5 Sutjeska BiH 44.1 B 45.8 Komarnica MNE 172.0 A 57.6

Hydropower projects in the DRB considered reasonably good within the Master Plan Project are given in the table below. Project name Country Capacity MCA MCA2 score (MW) Rogačica BiH/SER 113.3 B 44.6 Tegare BiH/SER 120.9 B 38.5 Dubravica BiH/SER 87.2 B 35.5 Kozluk BiH/SER 88.5 B 42.8 Drina 2 BiH/SER 87.8 B 44.5 Drina 1 BiH/SER 87.7 B 43.0 Drina 3 BiH/SER 101.0 B 44.0 Ustikolina BiH 60.5 B 47.9

Hydropower projects in the DRB considered underperforming within the Master Plan Project are given in the table below. Project name Country Capacity MCA MCA2 score (MW) Donje Kruševo MNE/BiH 120 C Kruševo BiH 10.7 C Brodarevo 2 SER 33.1 B 38.7 Brodarevo 1 SER 26.0 C

Pumped-storage (reversible) HPP candidates within the Master Plan Project are given in the table below. Project name Country Capacity MCA MCA2 score (MW) Bistrica (PSHPP) SER 680 A 68.7 Buk Bijela (PSHPP) BiH 600 A 64.6

Below is presented the rating of each of the projects listed above within the DRB Project.

3.2 Foča This project is an element of the optimal scenario for BiH (and the integral development scenario for the DRB). Therefor it has the highest rating within both Projects.

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3.3 Paunci This HPP project is an element of the "Reduced HPP Maximization" scenario - Variant #2 and "Full HPP Maximization" scenario for Bosnia and Herzegovina. Within the DRB Project it is considered attractive, but within a somewhat longer time frame. 3.4 Buk Bijela This HPP project is an element of the optimal scenario for Bosnia and Herzegovina and the integral development scenario for DRB. Therefor it has the highest rating within both Projects. 3.5 Sutjeska This HPP project is an element of the "Full HPP Maximization" scenario for Bosnia and Herzegovina. Within the DRB Project it is considered attractive, but within a somewhat longer timeframe (within both Projects). 3.6 Komarnica This HPP project is an element of the optimal scenario for Montenegro and the integral development scenario for DRB. Therefor it has the highest rating within both Projects. 3.7 Rogačica This HPP project is an element of the optimal scenario for Republic of Serbia and the integral development scenario for DRB. It has a slightly higher rating within the DRB Project. 3.8 Tegare This HPP project is an element of the optimal scenario for Republic of Serbia and integral development scenario for DRB. It has a slightly higher rating within the DRB Project. 3.8 Dubravica This HPP project is an element of the optimal scenario for Republic of Serbia and integral development scenario for DRB. It has a slightly higher rating within the DRB Project. 3.9 Kozluk This HPP project is an element of the optimal scenario for Republic of Serbia and integral development scenario for DRB. It has a slightly higher rating within the DRB Project. 3.10 Drina 2 This HPP project is an element of the "Full HPP Maximization" Scenario for Bosnia and Herzegovina. Within the DRB Project it is considered attractive, but within a somewhat longer timeframe (within both Projects). 3.11 Drina 1 This HPP project is an element of the "Full HPP Maximization" Scenario for Bosnia and Herzegovina. Within the DRB Project it is considered attractive, but within a somewhat longer timeframe (within both Projects). 3.12 Drina 3 This HPP project is an element of the "Full HPP Maximization" Scenario for Bosnia and Herzegovina. Within the DRB Project it is considered attractive, but within a somewhat longer timeframe (within both Projects). 3.13 Ustikolina This HPP project is an element of the optimal scenario for Bosnia and Herzegovina and integral development scenario for DRB. It has a slightly higher rating within the DRB Project.

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3.14 Donje Kruševo This HPP project is an element of the optimal scenario for Montenegro and integral development scenario for DRB under the name of “Kruševo”. It was included into this scenario upon request of a stakeholder from Montenegro, being one of only three hydropower projects in DRB included in the Energy Sector Development Strategy of Montenegro. 3.15 Kruševo This HPP project was not analysed within the DRB Project scenarios as it does not exist in any relevant planning document and it analysis was not requested by any stakeholder. 3.16 Brodarevo 2 This HPP project was not analysed within the DRB Project scenarios as the stakeholders decided to give a higher priority to the “Rekovići” HPP project (located near to the city of Priboj in Republic of Serbia), which in turn was not analyzed within the Master Plan Project. 3.16 Brodarevo 1 This HPP project is an element of the optimal scenario for Republic of Serbia and integral development scenario for DRB. It has a slightly higher rating within the DRB Project. 3.17 “Bistrica” PSHPP and “Buk Bijela” PSHPP Both projects are recommended for further analyses within the DRB Project. It is important to note that within the Master Plan Project these projects were not compared to the HPP projects, for the same reason for which they were not included into development scenarios within the DRB Project.

4. Conclusions The following conclusions can be drawn, based upon the information presented above: ➢ The results of the analyses performed within the Master Plan Project and the DRB Project demonstrate a very high degree of similarity and compatibility, especially in the view of the fact that these two projects had a slightly different focus (pure hydropower vs. management benefits including hydropower) ; ➢ Almost all HPP projects rated A within the Master Plan Project are included into the integral scenario for the Drina River Basin within the DRB Project; ➢ In the view of the fact that the differences between criteria for A and B ratings are not highly pronounced in all cases, it can be stated that there are virtually no differences in scoring when it comes to the most attractive hydropower projects in the DRB; ➢ Certain differences in evaluation of less attractive HPP projects can be attributed to the fact that within the DRB Project the Consultant could compare only the HPP project clusters, i.e. the scenarios that he defined together with stakeholders, while within the Master Plan Project the Consultant could compare individual hydropower projects more freely and ➢ Within both projects, “Bistrica” PSHPP and “Buk Bijela” PSHPP have not been compared to other HPPs. Therefore, the general conclusion of this analysis would be that essentially there are no major discrepancies between the results of the two Projects. These Projects are not opposed, but are complementing each other. Both of them have provided the reports which contain valuable information for anyone seeking objective technical information on hydropower resources in the Drina River Basin.