Eco Fund

Eco funds are the most important mechanisms for financing the environment.  The basic function of the Fund is to provide stable conditions for financial management in the field of environment through the application of economic and fiscal instruments. In fact, the efficiency of the financial mechanism will be limited, unless the state implements the necessary political reforms and develop institutional capacity for their implementation. This requires the setting of clear and unambiguous objectives and priorities of environmental policy at the national level, including the optimal allocation of financial resources.

Having in mind the obligation to implement the Environmental Law in the part of the establishment of the Eco Fund, and especially with the need to ensure stable and sustainable sources of funding for environmental activities, the UNDP supports the Ministry of Sustainable Development and Tourism in implementing a series of activities to establish the Eco fund.

In relation to that, Situational analysis of the legal, institutional and financial framework for the establishment of the Eco Fund, Operational models for the establishment of the Eco Fund and the draft of acts regulating the organizational structure were prepared.

As result of series activities, Eco Fund was established by the Decision of the Government of Montenegro in November 2018 with the purpose to act as a central national institution for financing and providing technical support to projects / programs in the field of the environment, climate change and energy. The "polluter pays" principle is one of the economic instruments by which the Eco Fund will collect funds and promote the reduction of environmental burdens. In addition to these financial instruments, the Fund's revenues for the financing of environmental protection and energy efficiency are provided from: the state budget, fees, loans and donations, instruments, programs and funds of the European Union, the United Nations and other international organizations.

The Fund will collect and invest funds in order to provide grants, subsidies, loans to the public and private sectors, as well as non-governmental organizations and citizens. Through the public awareness and environmental education programs, the Eco Fund will involve all citizens in order to behave responsibly towards the environment, and thus jointly contribute to the achievement of environmental and sustainable development goals. It will also serve as a catalyst for the creation of new partnerships with the private sector for the conservation and sustainable use of natural resources.

The project provides technical support in the establishment and operation of the Eco Fund in Montenegro. In addition, the necessary acts proposed financial sources and mechanisms, Operational Program and Financial Plan of the Eco Fund were prepared.