Sector: Water Name of the Pilot Location: Vrbas River (Karanovic and Novoselija villages around Banja Luka, BiH, Republika Srpska) Proposed Project Title: Construction of sewers and waste water treatment for Karanovic and Novoselija, (protected water supply area for Banja Luka) Bosnia and Herzegovina (4000 p.e.) Preliminary cost: 4.1 million EUR Needs for technical assistance and investment: Technical assistance for pre-feasibility study and full project preparation. Investment costs Summary of existing Environmental Situation: Karanovic and Novoslija are two settlements located in the protection zone, because they are in a close distance to the intake of the drinking water for the water supply system of Banja Luka. There is no sewerage system and no waste water treatment plant for the settlements. At present households are supplied in septic tanks. Waste water is discharged directly into the river or into the ground. Strengths: Strong motivation to solve the problem, in order to reduce the health hazard linked to the pollution of the drinking water source. Weaknesses: There is not enough information gathered in order to assess the real risk and to identify the best solution. There is no feasibility study carried out. Opportunities: The projest has a good potential to be developed. Threats: The levels of tariffs might be too low to cover the costs. Project options: Sewerage system, and a) One centralised plant of 4,000 p.e., or b) two plants of 2,000 p.e. each. Summary of Directions for Future Work: To meet the requirements of the EU-Directives concerning Urban Waste Water Treatment (1991L0271-20/11/2003) and Drinking Water (1998L0083-3/11/1998) the following needs to be addressed: Gather of all necessary information for the inventory; Secure funds for the project preparation; Conduct feasibility study; Preliminary design of a WWTP and sewage system; Obtain all necessary permits; Secure funds for the investment; Definite design of the plant(s). 1.