Sustainable Water Integrated Management (SWIM) - Demonstration Projects

Contracting Authority: European Commission Sustainable Water Integrated Management (SWIM) - Demonstration Projects Open Call for Proposals Guidelines for grant applicants Budget line 19.080101 "European Neighbourhood and Partnership (ENP) financial co-operation with Mediterranean countries" Reference: EuropeAid/131046/C/ACT/Multi Deadline for submission of proposals: 14 June 2011 Page 1 of 35

NOTICE This is an open Call for Proposals, where all documents are submitted at one stage (Concept Note and full proposal). However, in the first instance, only the Concept Notes will be evaluated. Thereafter, for the applicants whose Concept Notes have been pre-selected, evaluation of the full proposal will be carried out. Further to the evaluation of the full proposals, an eligibility check will be performed for those which are provisionally selected. This check will be undertaken on the basis of the supporting documents requested by the Contracting Authority and the signed "Declaration by the Applicant" sent together with the application. The contracting authority reserves the right not to undertake the evaluation of concept notes whenever considered justified (for example when a less than expected number of applications are received) and to go straight to the evaluation of the corresponding full applications. Although eligibility checks on provisionally selected applicants are not indicated until the end of the procedure, the evaluation committee may decide to carry out these checks at any prior stage. In accordance with the rules of good administrative practice, the evaluation committee may exclude an applicant at any stage of the evaluation process whenever it is obvious that the latter does not meet the eligibility criteria. Any change in the composition of the Partnership (i.e. change applicant and/or partner(s)) during the procedure is a cause of automatic rejection. These guidelines are published in English and in French. In the event of a discrepancy between the two versions, the English version takes precedence. Page 2 of 35

Table of contents 1. Sustainable Water Integrated Management 1.1 Background...4 1.2 Objectives of the programme and priority issues...10 1.3 Financial allocation provided by the contracting authority...16 2. RULES FOR THIS CALL FOR PROPOSALS 18 2.1 Eligibility criteria...18 2.1.1 Eligibility of applicants: who may apply?...18 2.1.2 Partnerships and eligibility of partners...19 2.1.3 Eligible actions: actions for which an application may be made...19 2.1.4 Eligibility of costs: costs which may be taken into consideration for the grant...21 2.2 How to apply and the procedures to follow...22 Open Call for Proposals...23 2.2.1 Application form...23 2.2.2 Where and how to send the Applications...24 2.2.3 Deadline for submission of Applications...25 2.2.4 Further information for the Application...25 2.3 Evaluation and selection of applications...27 2.4 Submission of supporting documents for provisionally selected applications...31 2.5 Notification of the Contracting Authority s decision...32 2.5.1 Content of the decision...32 2.5.2 Indicative time table...32 2.6 Conditions applicable to implementation of the action following the Contracting Authority's decision to award a grant...33 2.7 Early warning system and central exclusion database...32 3. LIST OF ANNEXES 35 Project Cycle Management Guidelines...35 Page 3 of 35

1. SUSTAINABLE WATER INTEGRATED MANAGEMENT (SWIM); 1.1 BACKGROUND 1.1.1 THE SWIM PROGRAMME Following the Euro-Mediterranean Ministerial Conferences on Environment (Cairo, 2006) and on Water (Dead Sea, 2008), the European Commission has launched a new Regional Programme on Water called "Sustainable Water Integrated Management" (SWIM) to be implemented under the European Neighbourhood and Partnership Instrument (ENPI), in accordance with the Regional Indicative Programme 2007-2010 and has been included in the AAP 2009 and AAP 2010. The overall objective of the SWIM programme, emanating from the above-mentioned Euro- Mediterranean initiatives, is to actively promote the extensive dissemination of sustainable water management policies and practices in the region in the context of increasing water scarcity, combined pressure on water resources from a wide range of users, and desertification processes, in connection with climate change. This regional programme is intended to support building consensus and sustainable co-operation links among the countries concerned on water issues of common concern. The SWIM Programme will be implemented through the two components below: Component A: SWIM - Support mechanism (EURO 6.708.500; Service Contract N.255-560, ongoing since December 2010). This horizontal component will take care of the overall coordination of the different programme activities and contribute to ensuring awareness raising on water scarcity and environmental challenges; policy dialogue; capacity building and environmental mainstreaming; dissemination of information, and liaison with Horizon 2020, the draft Strategy on Water for the Mediterranean and other relevant initiatives. It will also assist Partner Countries in developing and updating their water management strategies and plans complementing other ongoing projects. Technical assistance tasks will also include support to the beneficiaries of demonstration projects, overseeing of the activities/results and overall programme reporting to the Commission. Component B: SWIM - Demonstration projects 1. With a total budget of EUR 15.000.000 is the subject of the present Call for Proposals. The demonstration projects will address sustainable integrated water management and depollution of the Mediterranean, within the areas of intervention set in the draft Strategy for Water in the Mediterranean and the Horizon 2020 Initiative. 1.1.2 THE MEDITERRANEAN REGION Algeria, Egypt, Israel, Jordan, Lebanon, Morocco, Palestinian Authority, Syria, and Tunisia belong to the Mediterranean region, which is among the most arid regions of the world. The natural water 1 Projects designed to prove the viability and best-way-forward of certain actions/activities falling within the priorities of the draft Strategy for Water in the Mediterranean and the Horizon 2020 Initiative. The demonstration projects are expected to be of relevance at regional and sub-regional level and, exceptionally, national actions can be also taken in consideration when their replication component is also factored in/highly probable) as well as to be characterised by high potential benefits/impact/progress at environmental, social and economic level in the area/s of application. Page 4 of 35

supply is unevenly distributed in both geographic location and across the seasons. Demographic growth and economic development vary in the sub-regions, shaping water demand and pressures while water ecosystems are rich and vulnerable. Agriculture accounts for 64% of water use (varying from 50% to 90% in some countries). Important rivers, lakes and aquifers are often shared among two or more countries of the region. During the second half of the 20th century, water demand, i.e. the amount of resource abstraction (95% of total demand, including losses during transport and use) plus unconventional production practices (desalination, wastewater reuse), has increased twofold. The Mediterranean region groups together 60% of the world's population that is «poor» in water (with less than 1000 m3 water/inhabitant/year). The resources are already overexploited in many places and the growing water demand is going to remain very high with the rise in the demographic rate in the south and the east, the development of tourism, industry and the approach to irrigating land. Climate change has already a significant impact and its expected impact over the medium term on water resources and the irregularity of precipitations, represent a supplementary constraint. Climate change. Predictions covering the entire Mediterranean Region suggest reductions in rainfall of up to 35% by 2071-2100, reducing inland water flows and water yields. Following current trends, a tendency to a more extreme climate with more uneven distributions is projected. A 46% increase in 'significantly drier than normal' years is expected, along with an exponential increase in drought probability. Across the region, climate change is expected to severely reduce water availability, by up to 60% in places in the coming century. Water shortages are likely to worsen and in some places become critical. These figures show that in a number of places across the Mediterranean Region all economic activities will have to adapt to the evolution of water availability and water management systems will need to be put in place. The expected impacts of climate change will also be exacerbated by the projected increasing economic development and growing population. Water Management. Access to good quality water in sufficient quantity is fundamental to the daily lives of every human being and to most economic activities. With increasing population growth, environmental degradation and impacts of climate change, it is no longer possible to meet water demand by increasing supply, as there is little potential for developing new resources or increasing current ones. Water is an extremely valuable resource in Mediterranean region. The majority of the territory has an arid or semi-arid climate and water scarcity and competition for limited water resources has been highlighted as a major regional issue. The key environmental problems in the Mediterranean region, such as environmental protection (including biodiversity conservation, nature protection, land degradation, and the sustainable management of natural resources) and climate and global changes, have been underlined in the EC strategic documents and have been well depicted in various reports and documents prepared by Donor Agencies, IFI's and UN Agencies. The seriousness of water and environmental issues has been widely recognized by the countries of the region that have responded with national and regional initiatives and reforms to improve performance. Cooperation between the EU and ENPI South Countries in the field of the environment and water has both intensified and encompassed a structured political process engaging all countries as key factors in tackling the increasing economic, environmental and security challenges as well as the implementation of concrete projects. The EU policy in the Mediterranean region is guided by the European Neighbourhood Policy and its Action Plans. In the area of environment, the Euro-Mediterranean Partners have committed to Page 5 of 35

increase efforts to substantially reduce the pollution of the Mediterranean by 2020 in the Horizon 2020 Initiative (H2020). The initiative aims to tackle the main sources of pollution, wastewater, municipal waste and industrial pollution, by 2020. Another important initiative is represented by the Mediterranean component of the EU Water Initiative (Med-EUWI), whose objective is to contribute to the achievements of the Millennium Development Goals (MDGs) and the UN World Summit on Sustainable Development targets for water and sanitation through the adoption of IWRM policies and measures at national and regional level. At international level, Mediterranean countries committed to implement the Mediterranean Strategy for Sustainable Development, launched by the Mediterranean Commission for Sustainable Development established under the United Nations Environmental Programme Mediterranean Action Plan (UNEP/MAP). In 2008, the parties to the Barcelona Convention signed a Protocol on Integrated Coastal Zone Management in the Mediterranean, identifying adaptation to climate change as a priority. The Marrakesh Declaration, adopted by the Barcelona Convention in November 2009, highlights the need for urgent action to counter the serious impacts of climate change on ecosystems and resources. On 13 July 2008, the European and Mediterranean Heads of State and of Government created the Union for the Mediterranean. The intention was to give a new impetus to collaboration in the region, based on the progress achieved in the Barcelona Process. Removing pollution from the Mediterranean is among the priorities identified during the Paris Summit on the Mediterranean; the importance of water was acknowledged. As such, they deserve both exceptional and coordinated efforts from authorities at all levels, and also from the private sector, particularly financial institutions, in particular through the Horizon 2020 Initiative, launched at the Ministerial Meeting in Cairo in 2006. In compliance with the mandate given to it by the Heads of State, the ministerial conference on Water that met in Jordan, on 22 December 2008, decided on the fundamental guidelines for a new Strategy for Water in the Mediterranean (SWM) and its subsequent Action Plan. The main priority areas of this new Strategy had been identified during the preparatory Euro-Mediterranean and South Eastern European Water Directors Conferences in 2007 and 2008: Water Governance, Water and Climate Change, Water Financing, and Water Demand Management. The participants at the Joint Egyptian-Dutch Water Conference "Towards the new Long Term Strategy for Water in the Mediterranean" (Cairo, November 2009) recognised that climate change presents an additional pressure in the Mediterranean region and highlighted the need to adapt to increasing climate variability and change through better water management and water services. This requires significant additional efforts within water management and the areas of spatial planning and energy management. However, in spite of the consensus reached on the content of the Strategy, due to the lack of political agreement among the parties, the 4th Euro-Mediterranean Ministerial Conference on Water held in April 2010 in Barcelona failed to adopt a finalised version of the SWM (here in after draft Strategy). At the time of writing the draft Strategy has still not been adopted. Taking into account this context the European Commission has launched a new Regional Programme called "Sustainable Water Integrated Management" (SWIM Programme) to be implemented under the European Neighbourhood and Partnership Instrument (ENPI). This project will support the concrete measures that would arise from the draft SWM if eventually adopted but is not conditional on its adoption to pursue concrete improvements at regional level. Page 6 of 35

Current state of affairs in the relevant sector Each ENPI South country has established its own system of water and environmental management, developed own legislation and institutions in charge of policy development and management and has identified national interest to be promoted in discussions with other countries of the region. Many ENPI South countries have placed their institutions responsible for water management at the highest administrative level. In the sanitation and drinking water sector it can be stated that, in general, local authorities in larger countries have a more prominent role, while smaller countries have chosen either a national level management (i.e. Jordan) or a combined solution. The tendency is to manage water supply and sanitation close to its delivery location. The analysis of the legal framework in water management shows that all countries are devoted to the principles of Integrated Water Resources Management (IWRM). With some exceptions all countries provide for an up-dated legislation or are in the process of carrying out comprehensive revisions to existing laws. Those countries that have chosen a sectoral approach to water legislation are now moving towards a coherent unified water law. In most of the countries, while the legal basis for water management provides for sound management foundations, the practical implementation still faces significant challenges and it will take some more time until all the demanding requirements of integrated water resource management are met by the institutional setup in practice as well as the prevailing management practices. In addition, many ENPI South countries still suffer from lack of effective operational strategies and fragmentation of responsibilities between authorities. They demonstrate weak monitoring and assessment at the national, local and trans-boundary levels, limited technical, management and implementation capabilities to effectively address water challenges, and financial constraints to implement policies. Co-ordination among sectors is most often done through an inter-ministerial council. The involvement of additional stakeholders and interest groups is still not well developed. In most cases the responsible national authority is also in charge of co-ordination. Since all countries are on their way towards more integrated approaches to water management it can be expected that all countries will favour joint councils or commissions for co-ordination in the near future. As regards IWRM, some ENPI South countries are trying to move towards basin approaches. Trans-boundary co-operation requires overcoming different administrative structures and sometimes a number of conflicting interests. However, the need to share water resources is widely acknowledged. Water pricing systems have been established in all countries, pricing control remains at the national level. Data on cost recovery are not fully available for all Mediterranean countries. In general it can be stated that cost recovery could be improved in nearly all Mediterranean countries; however, one needs to consider and address the rationale of the low cost recovery rates in some countries, which is linked to subsidies and related social and economic effects (e.g. competitiveness of the agricultural sector). The economic analysis of the commitments for the Millennium Development Goals 7c 2 shows the lack of financial flows for this sector. Some reasons are related to the lack of clear problem definition (in terms of economic analysis of water management), definition of financial sustainability, and lack of regulation for private sector involvement. In addition, current water financing is inadequate to address sustainable development needs on other water use related areas, such as irrigation, hydropower or industry and tourism development. 2 To halve, by 2015, the proportion of the population without sustainable access to safe drinking water and basic sanitation. Page 7 of 35

Over the last decades, focus of water investment was directed toward intense development of water infrastructures including dams, irrigation and drainage systems, water supply and wastewater treatment systems, water distribution or hydropower electricity production. However, the institutional and regulatory framework to manage these investments and to plan next steps has not been adapted as rapidly. Water governance reforms, currently undertaking in several countries, are orienting priorities and practices towards IWRM including promotion of Water Demand Management (WDM) policies and their implementation with emphasis on the water-energy and water-agriculture -food-environment nexus. However, implementing WDM measures is still in a very early stage in the Mediterranean region. Among other fields of importance, reducing water losses in public water supply networks, increasing irrigation efficiency, and improving crop water productivity should be addressed. In most arid and semi-arid countries of the region, water efficiency of irrigation is below 45%. In general, agriculture is the largest water consumer. Therefore, taking action in this sector is of utmost importance. In addition to water savings in agriculture, improving water efficiency should be considered. A number of prerequisites are to be implemented under WDM in the Mediterranean: Strengthening and enforcing legislation, Developing appropriate technologies, Strengthening the institutional setting through capacity building, especially training, Delivering adequate water pricing policies, Participatory management. As regards climate change, there is still little awareness of the measures to take to cope with this issue among the population but also to a certain extent among policy-makers. In the ENPI South countries, there is need for capacity building and technology transfer in the field of climate change mitigation and adaptation. Related programmes and other donor activities Various international cooperation initiatives and programmes concerning water and environment are currently being implemented in the Mediterranean. The present project will ensure complementarities and synergy with activities under the programmes and projects presented below: The project will be implemented complementarily with the Mediterranean Component of the EU Water Initiative (MEDEUWI), whose main objectives are to promote the development of Integrated Water Resources Management (IRWM) policies via National Policy Dialogues, and to facilitate donors' coordination concerning priority actions to be identified with the countries. An EU support project runs from 2010-2012 for 30 months with a budget of 1.02 million. Close coordination with the Horizon 2020 Initiative, for the de-pollution for the Mediterranean (H2020), including the related ENPI funded projects and the Mediterranean Strategy on Sustainable Development (MSSD) will be ensured, with a special focus on the H2020 components concerning pollution reduction projects (identified Hotspots) and capacity building. The present programme also complements the three different projects currently running within the H2020 Initiative, namely: The Capacity Building/Mediterranean Environment Programme (MEP-CP); Towards a Shared Environmental Information System in the ENP Region (SEIS); The Mediterranean Hot-Spot Investment Programme Project Preparation and Implementation Facility (MeHSIP PPIF). Page 8 of 35

These projects are carried out in close cooperation with the UNEP-Mediterranean Action Plan, the European Environment Agency and IFIs. It should be mentioned that several programmes developed under the ENRTP (Environment and sustainable management of Natural Resources including energy Thematic Programme) concern water related climate change issues in the ENPI countries, and specifically the Mediterranean. For instance, a World Bank administered Trust Fund in which the EU and Italy participate as main donors addresses climate change in the Middle East and North-Africa (MENA) region. Synergies with the relevant projects under the ENPI Cross-Border Cooperation Mediterranean Sea Programme will also be developed. As well as with previous EU funded regional programmes, such us: the MEDA Water regional Programme (www.medawater-rmsu.org) and SMAP (Regional Programme for environment (http://smap.ew.eea.europa.eu). This programme will also ensure complementarities with activities under ENPI bilateral programmes. These include water and environment bilateral projects such as those currently implemented in the framework of the "Water Sector Reform Programme" in Egypt 3 and those in the context of the Improved Water Resources Security for Low Income Rural and Urban Communities 4 to be launched in Jordan. Moreover, bilateral water programmes are approved in Morocco ( 50 million) and Tunisia ( 57 million) or are in preparation in Algeria ( 30 million) and Lebanon ( 9 million). Other activities with a sub-regional nature such as the "Fostering cooperation on water management between the Israeli, Palestinian and Jordanian water authorities" programme 5 will also be taken into account. Furthermore, synergies will be sought with the GEF-supported Med Partnership (implemented by UNEP/MAP) and Sustainable Dev (implemented by the WB). The EU is, among other donors, cofinancing the Med Partnership. Despite the difficulties of coordinating regional activities on environment in the Mediterranean, specific attention will also be paid to important infrastructure projects funded by International Financial Institutions (including the Horizon 2020 Pollution Reduction Component) in terms of complementary capacity strengthening needs and sustainability issues. Moreover, linkages with the implementation of the Mediterranean Strategy on Sustainable Development will be ensured, and synergies will be sought in particular with projects funded through the GEF but also with the African Water Facility and with regional water governance related projects 6. 3 The programme aims at improving the management of water resources in order to ensure the supply of the population with drinking water while balancing the conflicting needs of industry, agriculture and other water uses. The programme covers the period 2005-2009 with an 80 million budget and 29 million from 2010. 4 The programme intends to assist the water sector stakeholders with a view to enhance mitigation and adaptation to the increasing water scarcity in Jordan which may be further augmented by the impact of the global warming and climate change. It also aims to support effective cooperation of water users in executing strategic government's objectives related to efficient management and conservation of water resources. The programme covers the period 2010-2012 with a 10 million budget. 5 The programme represents the fifth phase of the EXACT programme and is currently under preparation. 6 The European Union and the World Bank are currently supporting a range of activities in the Water sector in the partner countries and at regional level, with the contribution of other bilateral donors such as Sweden, Belgium, USAid, AFD, KfW and DFID. The World Bank, African Development Bank and ArabAid coordination group have largely supported infrastructure investments projects to reach MDGs. The GEF has funded several projects related to regional water management in the Mediterranean, some of whom were country based such as in the case of. Egypt. GTZ continues to implement a series of country based projects as regards water security and IWRM issues in Morocco, Algeria, Tunisia, Palestine and Syria. Invent had supported an important project on IWRM training for Egypt. Page 9 of 35

Regarding the implementation of the SWIM, coordination with EU member states and other international donors will take place via the Water Expert Group (WEG). One of the priorities of the present project as a part of the SWIM programme is to ensure continuity of actions and to provide further advancement in these areas that have already been initiated in partner countries and been created by previous and on-going projects and other initiatives, including those aforementioned. 1.2 OBJECTIVES OF THE PROGRAMME AND PRIORITY ISSUES 1.2.1 Overall Objective The overall objective of the SWIM programme, emanating from the above-mentioned Euro- Mediterranean initiatives, is to actively promote the extensive dissemination of sustainable water management policies and practices in the region in the context of increasing water scarcity, combined pressure on water resources from a wide range of users, and desertification processes, in connection with climate change. This regional financing instrument is intended to support building consensus and sustainable co-operation links among the countries concerned on water issues of common concern. Component B: SWIM - Demonstration projects (which is the subject of the present Call for Proposals). The demonstration projects will address sustainable integrated water management and de-pollution of the Mediterranean, within the following frame: one or more of the themes encompassing the areas of intervention set out in the draft Strategy for Water in the Mediterranean: water governance, water and climate change, water financing and water demand management and efficiency, as well as nonconventional resources; the three pillars of the Horizon 2020 Initiative: municipal waste, municipal wastewater, and industrial emissions. The Call for Proposals is addressed to projects promoting and applying sustainable water resource management policies and practices in a context of 1) increasing water scarcity, 2) combined pressure on water resources from a wide range of users and 3) ongoing desertification processes in connection with climate change. The projects can be run at regional (i.e.: involving all the partner countries) and sub-regional level (for instance Maghreb or Mashreq, but always involving at least two ENPI South Partner countries) or, exceptionally, at national level, when the demonstration activity proposed has a large potential of replication. Each specific project would touch upon one or more of the indicated areas of action. Implementation will be entrusted to consortia consisting of non-profit organisations as defined in point 2.1. The objective of the formation of consortia is to ensure integration, global approach and consensus for the implementation and pursue a mutual added-value impact on technical assistance, institutional strengthening and wider capacity building requirements at a regional level. The consortia are encouraged to work in co-operation with the relevant local or central national authorities. Page 10 of 35

1.2.2 Specific Objectives and Priorities The specific objectives of the SWIM programme as a whole are summarised as follows: Draw the attention of Partner Countries' decision-makers and stakeholders on existing and forthcoming threats to water resources, on the necessity to adopt a more appropriate water consumption and water use model, as well as on the existence of solutions to tackle the problem; Support Partner Countries in designing and implementing sustainable water management policies at the national and the local levels, in liaison with existing international initiatives in the area concerned; Contribute to ensuring institutional reinforcement and the development of the necessary planning and management skills, in line with the draft SWM and Horizon 2020 objectives, and facilitate know how transfer. Enhancement of regional cooperation in the areas of sustainable and integrated management of water resources through institutional strengthening, society awareness, capacity building and participation. These objectives will be pursued with a view to addressing the four interlinked issues referred to in the draft Mediterranean Water Strategy and the three pillars of the Horizon 2020 Initiative. Specifically, these priorities are divided into five lots: I. Enhancing effective water governance for integrated water resources management; II. Adapting to climate change and enhancing drought and flood management; III. Promoting water demand management, efficiency and non-conventional water resources, and protecting quality of water and biodiversity; IV. Optimising water financing and related instruments, with emphasis on innovative mechanisms, including related capacity building; V. Contributing to support the Horizon 2020 Initiative by tackling the three main sources of pollution of the Mediterranean: municipal waste, wastewater, and industrial emissions. Project proposals should focus on specific areas of action within one lot, with the possibility to touch upon additional areas of action listed under other lots. The projects must address the priorities listed above in their regional or sub-regional dimension. The national dimension can exceptionally be taken into consideration when there is a significant potential for replication across the region. 1.2.3 Expected results to be achieved Through the selected projects, demonstrated applicability in the region of the concepts priorities and practices set in the draft Strategy for Water in the Mediterranean and H2020. Proven replicability of the demonstration projects in other areas of the Mediterranean region. Good practices and state-of-art technologies are widely disseminated at national and regional levels as opportune. Page 11 of 35

1.2.4 Lots and Areas of Action The following chapters provide brief background information for each area of action in order to offer orientation for the development of relevant project proposals. More specifically, the indicative topics listed under each area of action aim at assisting the preparatory work in the definition of suitable combinations in conformity with the targeted regional/sub-regional context. The orientation provided is an indication and not an exclusive reference to the specific topics to be addressed in the project proposals. It is expected that projects be aligned with EU regional strategy as well as with country strategies. During the preparation of the proposals prospective applicants should verify against overlapping with ongoing water related programmes in the beneficiary countries. In addition to the issues mentioned in previous chapters, the project proposals submitted shall fulfill the following requirements: they all reflect the aspirations of major stakeholders and actively promote involvement of local actors, following a broad bottom-up approach and trying to improve regional cooperation among them; they shall be based on integrated, multidisciplinary and border-crossing actions, whose purpose is to settle specific but not necessarily unique problems. This allows them to be carried out in, and extended to, other regions; the objective of all projects is to bring a lasting improvement in the integrated management of water resources and de-pollution, and therefore on the broader economic development of the region, re-launching sustainable development and moving towards green economies with significant benefits for local populations in the immediate future (increase of incomes, improvement of living conditions, training and education systems). The Call for Proposals has been launched in order to select project proposals, mainly demonstration projects. The Call for Proposals consists of five Lots. Each Lot contains a list of areas of action. It is expected that some proposals will touch upon more than just one area of action. It is therefore requested to clearly indicate the specific lot of application. Project proposals are also expected to contribute to the reinforcement of ongoing actions and programmes on environmental protection and environmental information in the region. Lot 1: Effective water governance for integrated water resources management Actions under this Lot could touch upon the following: Align Integrated Water Resources Management (IWRM) and Integrated Coastal Zone Management (ICZM) policies, principles, and/or activities in countries as means for tackling outstanding challenges related to rapid coastal development and marine pollution Promote water institutional settings and instruments in line with IWRM principles and other EU water related governance policies. Identify, and replicate as appropriate in countries, amendments and integrations of relevant legal and regulatory instruments to enable procedures for sustainable use of water resources and the implementation of integrated water management in the river basins, also across the borders. This can extend to an inspection Page 12 of 35

and monitoring mechanism and an effective law compliance and enforcement system. Proposals to establish settings for water rights and permits and to introduce environmental standards including the polluter pays principle in pilot areas are also included. Enhance ongoing policy dialog on water in the Mediterranean by addressing the subregional dimensions and trans-boundary issues. Promote cooperation on sustainable use and protection of trans-boundary water resources through coordinated action of riparian states, in conformity with international law. In particular, explore further opportunities for sustainable cooperation on water, together with the development of water security networks, at subregional levels. This could include consideration of support beyond the EU Mediterranean Neighbourhood, building on initiatives of the water rich countries Pilot the preparation of river basin master plans (long term and priority action plan), with criteria, direction, prescriptions, legal requirements, regulations, actions and priorities aimed at the conservation and management of water resources. Lot 2: Water and Climate Change It is expected that particular attention be given to the water-agriculture-food-environment link and that mitigation objectives are also taken into account when designing adaptive measures. The proposals are expected to cover one or more of the following issues: Pilot or replicate proven climate change adaptation projects touching on: 1. Application of best agricultural practices, including adaptation of water infrastructures (harvest, storage, irrigation and drainage systems; proposing locally tailored tested techniques, both modern and traditional), and support sustainable agricultural patterns to promote water efficient farming systems, with less pollution and impacts on the environment. Consider rain-fed and silvopastoral practices as opportune. Challenges, such as desertification, land erosion and soil degradation are to be tackled in a context of increasing water scarcity and drought events. Adoption of renewable energy technologies applied to water management practices. Pilot or replicate proven actions to protect and safeguard biodiversity and natural ecosystems as a key condition for: 1. good quality water as well as necessary goods and services they provide, including ecological ones, in accordance with the provisions and latest development of the Convention on Biological Diversity (CBD) and the Ramsar Convention, European legislation and principles, and Mediterranean related specific targets; 2. helping increasing the overall resilience of man-made infrastructure and human activities, thus minimising the cost of consequent interventions. Lot 3: Water Demand Management and Efficiency, including non-conventional water resources It is expected that particular attention be given to the fact that due to rapid population growth, environmental degradation and climate change impacts, it is no longer possible to meet water demands by increasing supply. Therefore, an integrated approach for water resources management, based on water demand management and the sustainable use of non-conventional water resources is strongly recommended. Page 13 of 35

The proposals are expected to touch upon the following issues: Promote the adoption in countries of qualitative and quantitative targets for local, national and regional planning development in line with EU policy and regulation (the EU Water Framework Directive, the EU Marine Strategy Framework Directive, and other EU waterrelated Directives) and in alignment with the objective for water savings of 25% by 2025, adopted in the framework of the Barcelona Convention. Take into consideration all waters, and in particular, transboundary resources. Foster metering systems and block-tariffs application when appropriate to avoid over-consumption. Consider as well sector allocation (e.g. modalities or plans to save water in different sectors such as agriculture, industry, tourism etc.) and thresholds for water withdrawals to avoid over-exploitation. Introduce adequate wastewater treatment practices. Establish minimum quality requirements for wastewater treatment plant effluents and secure adequate treatment of wastewaters to avoid downstream pollution. Make proposals for pilot activities using a sound mix of conventional and alternative resources (focusing on water storage systems and reused water). Desalination can be tackled only as far as it concerns the assessment/reduction of the related environmental impacts, not as promotion of desalination options and practices. Support countries in the elaboration of plans to improve the efficiency of irrigation water through extending and developing irrigation water saving technologies (including traditional knowledge techniques), increasing awareness and training among farmers. Promote the introduction of related institutional reforms as appropriate. Support the elaboration, strengthening and implementation of operational and applicable National IWRM Plans and Water Efficiency Strategies, which are linked to the National Development Strategies and National Adaptation Plans. Promote water efficiency measures related to the identification, mapping, control and reduction of water losses (e.g. leakage and breakage prevention and network maintenance) and water saving measures in urban or rural areas. Lot 4: Water financing Sufficient and sustainable financing is a prerequisite for a well functioning water sector, ensuring the sustainability of public water services. Proposals for this lot are expected to touch upon the following issues: Definition of a sustainable cost recovery strategy to strengthen the sector s self-financing capacity through tariffs and other user charges. Consideration should be given to tariffs and charges that reflect "the polluter pays principle" and other economic instruments aimed to protect water resources. Tariff structures (tariff modulation) should also include social aspects, e.g. family size and income levels to ensure affordability for all users. Tailored approaches should be considered at different levels (local, regional, national). Use among others, affordability and willingness-to-pay assessments, incorporating improvement of the quality of services delivered as an incentive to increase willingness of users to pay. Integration of environmental and water satellite accounts into national accounting systems. Quantify environmental services as well as pollution and degradation costs. Page 14 of 35

Quantification and communication of the socio-economic and environmental benefits of investments in the water sector. Explore possibilities for investments in the water sector through public-private partnership and strengthening public regulation of the sector. Explore and promote innovative financial mechanisms, among others blending grants and repayable finance, microfinance, output based aid, direct lending to sub-national entities, public private partnerships (PPPs) or payments for ecosystem services to leverage additional funding to the sector, reduce cost of capital and share the adaptation costs of water resources to climate change impacts. Lot 5: De-pollution in the Mediterranean (Horizon 2020 Initiative) Under this Lot, actions should aim at reinforcing the current efforts of H2020 in terms of reducing the impact of land-based sources of pollution (municipal waste, industrial emissions, and urban wastewaters) on the human health and environment, taking into account, among others, the EU Marine Strategy Framework Directive and relevant measures adopted in the framework of the Barcelona Convention. They could touch upon the following issues: Propose options for managing, monitoring and tracking industrial and municipal sources of pollution in order to estimate environmental releases and transfers of toxic chemicals or nutrients. Exploring methods and options for improving resource efficiency in production processes with a view to reducing waste and polluting emissions to water, for example through industrial symbiosis and voluntary schemes for eco-management and audit (similar to EMAS) Horizontal activities in terms of transfer of know-how, exchange of information and awareness raising, mobilization and promotion of commitment of the stakeholders at different levels will be run by the SWIM Support mechanism. The European Commission encourages the implementation of result-oriented innovative approaches. Research-oriented activities/projects will not be considered for funding. During the implementation phase, the selected projects will ensure the coordination of activities with the above mentioned Component A SWIM Support mechanism, with the Horizon 2020 programme and with related bilateral EU-led activities, as well as with national and regional water governance related projects led by other international donors. Projects under the present Call for Proposals will provide regular information on their activities, findings and results that will be posted on the SWIM programme website prepare publications and experience sharing materials. The projects will also participate in events (seminars, thematic workshops) organised by the SWIM Support mechanism project. A provision for participation of a minimum 2 persons in 1 regional seminar per year should be foreseen in the project financial proposal (Annex B Budget). Participation in thematic workshops will be financed by the SWIM support mechanism project. Page 15 of 35

The results of the Demonstration Projects will be communicated on a regular basis to the Steering Group and to the Thematic Task Forces and will also be used by the Horizon 2020 Initiative Steering and Working Groups (in particular the Pollution Reduction and the Capacity Building Working Groups). 1.2.5 Programme Monitoring and Supervision and Support to the identification of Partners The European Commission will assume the overall supervision and monitoring of the programme. These functions do not substitute for the requirement for internal supervision and monitoring functions by the Beneficiaries at project level. In addition, a Support mechanism (implemented by another consortium 7 ), will be in charge of the Component A of the SWIM and shall assist the beneficiaries (successful applicants 8 ) in streamlining co-operation and coordination, production of relevant collective documentation and promotion of visibility for the programme. The beneficiaries and partners shall make available to the European Commission and this consortium all types of information required to this effect and participate in relevant regional meetings organised by them 1.3 FINANCIAL ALLOCATION PROVIDED BY THE CONTRACTING AUTHORITY The overall indicative amount made available under this Call for Proposals is EUR 15.000.000. The Contracting Authority reserves the right not to award all available funds. Indicative allocation of funds by lot: Lot 1: Effective Water Governance: EUR 3,500,000 Lot 2: Water and Climate Change: EUR 3,500,000 Lot 3: Water Demand Management and Efficiency, including non-conventional water resources: EUR 3,500,000 Lot 4: Water Financing: EUR 1,500,000 Lot 5: De-pollution in the Mediterranean (Horizon 2020 Initiative): EUR 3,000,000 7 The SM Consortium is not eligible for project funding under the present Call for Proposals. Therefore, LDK Consultants Engineers & Planners SA, the Arab Countries Water Utilities Association-ACWUA (Jordan), the Arab Network for Environment and Development RAED (Egypt), the DHV B.V. (The Nederlands), Global Water Partnership Mediterranean - GWP-Med / MioECSDE (Greece), the Ministry of Agriculture, Hydraulic Resources & Fishery Bureau de l Inventaire et des Recherches Hydrauliques / Direction Générale des Ressources en Eau (Tunisia), the Ministry of Energy and Water General Directorate of Hydraulic and Electrical Resources (Lebanon), the Ministry for Environment, Energy and Climate Change, Department of International Relations and EU Affairs (Greece) and Umweltbundesamt GmbH (Austria), can neither participate as applicant nor as partner or associate in this call for proposals.. 8 Please note the difference between Applicant and Beneficiary in the relevant parts of the Call for Proposals. The applicant is an organisation submitting an application/project proposal; the Beneficiary is the successful applicant organisation awarded a contract. Page 16 of 35

In the case where the minimum percentage allocation foreseen for a specific lot cannot be used due to insufficient quality or number of proposals received, the Contracting Authority reserves the right to reallocate the remaining funds to another lot. Size of grants Lot 1: Minimum amount: EUR 2.500.000 Maximum amount: EUR 3.5000.000 Lot 2: Minimum amount: EUR 2.500.000 Maximum amount: EUR 3.5000.000 Lot 3: Minimum amount: EUR 2.500.000 Maximum amount: EUR 3.5000.000 Lot 4: Minimum amount: EUR 1.000.000 Maximum amount: EUR 1.500.000 Lot 5: Minimum amount: EUR 2.000.000 Maximum amount: EUR 3.000.000 In addition, no grant may exceed 80% of the total eligible costs of the action (see also section 2.1.4). The balance must be financed from the applicant's or partners' own resources, or from sources other than the European Union budget or the European Development Fund 9. 9 Where a grant is financed by the European Development Fund, any mention of European Union financing must be understood as referring to European Development Fund financing. Page 17 of 35

2. RULES FOR THIS CALL FOR PROPOSALS These guidelines set out the rules for the submission, selection and implementation of actions financed under this Call, in conformity with the provisions of the Practical Guide to contract procedures for EU external actions, which is applicable to the present call (available on the Internet at this address: http://ec.europa.eu/europeaid/work/procedures/implementation/index_en.htm). 2.1 ELIGIBILITY CRITERIA There are three sets of eligibility criteria, relating to: applicant(s) which may request a grant (2.1.1), and their partners (2.1.2); actions for which a grant may be awarded (2.1.3); types of cost which may be taken into account in setting the amount of the grant (2.1.4). 2.1.1 Eligibility of applicants: who may apply? (1) In order to be eligible for a grant, applicants must: be legal persons [or an entity without legal personality 10 ] and be non profit making and be Non-governmental Organisations, Public Administrations (National Regional or Local) or Public Sector Operators, International (Inter-governmental) Organisations as defined by Article 43 of the Implementing Rules to the EC Financial Regulation 11 Institutes and Universities, active in the Mediterranean Region in the areas of action defined in paragraph 1.2.4 and be nationals 12 of a Member State of the European Union or - one of the ENPI South partner countries and territories (Algeria, Egypt, Israel, Jordan, Lebanon,, Morocco, Palestinian Authority, Syria, Tunisia) This obligation does not apply to international organisations and be directly responsible for the preparation and management of the action with their partners, not acting as an intermediary. 10 Subject to the prior approval of the relevant services of the European Commission, grant applications may be eligible if submitted by entities which do not have legal personality under the applicable national law, provided that their representatives have the capacity to undertake legal obligations on their behalf, and assume financial liability. 11 International organisations are international public-sector organisations set up by intergovernmental agreements as well as specialised agencies set up by them; the International Committee of the Red Cross (ICRC) and the International Federation of National Red Cross and Red Crescent Societies, European Investment Bank (EIB) and European Investment Fund (EIF) are also recognized as international organisations. 12 Such nationality being determined on the basis of the organisation's statutes which should demonstrate that it has been established by an instrument governed by the national law of the country concerned. In this respect, any legal entity whose statutes have been established in another country cannot be considered an eligible local organisation, even if the statutes are registered locally or a Memorandum of Understanding has been concluded. Page 18 of 35