National Sources of Finance

5.2.1. National Sources of Finance

National legislation for the Republic of Belarus, Russian Federation, and Ukraine specifies a range of potential budgetary and non-budgetary sources which can be used to finance environmental investments. The budgetary sources include government contributions from the state (federal), Oblast (RF Constituent) and local budget, and reserves accumulated by the specialized Environment Protection Funds. The non-budgetary sources include the internal reserves accumulated by enterprises, private sector finance, and donations made by citizens.

The capacity for mobilising funding from national sources for major projects similar in scale to the SAP largely depends on the current state of the national economies and their strategic priorities. Total environmental expenditures constitute about 1% of GDP in the Republic of Belarus and Russian Federation, and about 1.95% of GDP in Ukraine. The 2000 GDP values for the three riparian countries are shown below in billions of US dollars:

About 80% of the annual environmental expenditure is used to maintain the existing level of environmental protection/management. The remaining 20% is invested in fixed assets, including the construction/upgrade of new and existing environmental facilities, and the implementation of restoration/rehabilitation measures.

In all three countries of the Dnipro Basin, the environmental expenditure pattern is dominated by water protection expenditures, while funding allocated for land protection/restoration actions is kept at a minimum. This is illustrated by the Table below (2000 data).

The major sources of investment and their respective contributions are shown in the Table below (%).

(*) – Environmental funds are the component of respective budgets

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