ISPA and Cohesion Fund 2004 - 2006
in the environmental sector


About The Cohesion Fund

The Cohesion Fund (CF) was established on the basis of Council Regulation (EC) No. 1164/94 of 16 May 1994 for the purpose of providing assistance for environmental projects and projects of trans-European networks in transport infrastructure. Article 130d of the Treaty establishing the European Economic Community forms the legal basis for establishing the CF.

Extensive investment activities in these sectors are of utmost importance in respect of integrating the European Union’s (EU) priorities within the strategy of sustainable development when pursuing the objectives of EU’s policy of economic and social cohesion.

The established CF rules make it possible to fund up to 85% of eligible expenditure on extensive environmental and transport projects. To become eligible for CF funding, a Member State must meet the following criteria:

  • Gross national product (GNP) per inhabitant measured with purchasing power parities must be less than 90% of the EU average,
  • Member State must implement a programme fulfilling the conditions of economic convergence referred to in Article 104c of the Treaty on the EU.

In the period 2004 – 2006, the CF had almost EUR 16 billion available (at 2004-prices). More than half of the funds (EUR 8.5 billion) were reserved for the new Member States accession to the EU in 2004. With effect from 1 May 2004, the Czech Republic, Estonia, Cyprus, Lithuania, Latvia, Hungary, Malta, Poland, Portugal, Greece, Slovakia, Slovenia and Spain became the countries eligible to drawn on CF assistance.

The gross allocation of funds for the Czech Republic in the environmental sector for the period 2004 – 2006 was almost EUR 375 million. The total gross allocation to ISPA and Cohesion Fund projects 2004 – 2006 in the field of the environment in the Czech Republic is almost EUR 600 million.

Scope of the Cohesion Fund

The CF did not specifically target regional politics (it did not grant support at the regional level), which is why it was not included in the so-called structural funds. In the current programme period (2007 - 2013), the Cohesion Fund has now been included in the structural funds in order to attain greater synergy of individual funds’ intervention. For instance, the Operational Programme ‘Environment’ may be given as a specific example, as it grants support both to the selected CF projects and to projects from the European Regional Development Fund. Both funds are mutually complementary and decisions on the source of support are made depending on the thematic focus of the submitted project. This means a significant advancement compared to the programme period 2004 – 2006.

The Cohesion Fund and the Czech Republic

The Czech Republic (CR) became an EU member on 1 May 2004; nevertheless, preparations for the CF funding had taken place much earlier. The CR used assistance from the ISPA financial instrument (Instrument for Structural Policies for Pre-Accession) intended for the candidate countries from 2000 until joining the EU. The focus and procedures for the ISPA project funding were analogical to the CF. Once the Czech Republic had joined the EU, implementation of the projects approved within the ISPA regime could be seamlessly migrated to the CF regime. The charts below show further information about gradual project approvals in individual years and accessing of CF funds.

Project Substance

Note: The chart shows how many projects have been implemented in individual areas (right axis) and amounts of CF allocations to individual areas (left axis). The chart shows that water management projects, including sewerage systems combined with WWTPs, received major support within 22 projects.

Approved Projects 2000-2006

Note: The chart shows how much was allocated from the CF to the approved projects in the year concerned (left axis) and how many projects were approved in the year concerned (right axis)

CF Funds - Allocations and Actual Use

Note: The chart shows a gradual rise in CF allocations to specific projects and the time lag at which the approved allocations were and have actually been used. The remaining funds are expected to be exhausted in 2011. It is also clear that the actual funding for the first projects took place as late as in 2003.

Project Implementation at National Level – Operational Management 2004 - 2006

  • Managing Body of the Cohesion Fund (CF MB)
    A body responsible for overall management and coordination of CF activities within a Member State (sector of environment and transport). By CR Government Resolution No. 102 of 23 January 2002 the Ministry for Regional Development was appointed as the CF MB.
  • Intermediary Body (IB)
    A body assuming some duties of the Managing Body and centrally managing implementation of all projects in the given sector on behalf of the Managing Body. The Ministry of the Environment stands as the IB in the environmental sector.
  • Implementing Body (ImpB)
    A body responsible for actual implementation of specific projects in cooperation with Final Beneficiaries. The State Environmental Fund of the Czech Republic (SFŽP ČR) stands as the ImpB in the environmental sector. The distribution of duties between the IB and ImpB is regulated in detail by the so-called “Delegation Agreement” drawn up between these entities. The Centre for Regional Development CR took this role in the case of ISPA projects approved in 2000.
  • Payment and Certification Authority (PCA)
    A central state administration body responsible for overall financial management of funds provided to the Czech Republic from the structural funds and the CF. Based on the decision of the Minister of Finance issued under Government Resolution No. 102 of 23 January 2002, the National Fund Department of the Ministry of Finance was authorised to exercise PCA activities.


ISPA and Cohesion Fund in the environmental sector - overview of successful projects in the Czech Republic
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