The provision of a sovereign loan of up to EUR 130 million (or USD equivalent) to the Arab Republic of Egypt to finance the rehabilitation of the existing infrastructure of Cairo Metro Line I, which will cover urgent infrastructure investments in signalling, telecoms, controls and track works. It is expected that the project will be co-financed by a sovereign loan of up to EUR 150 million from the European Investment Bank ("EIB") and EUR 50 million from the Agence Francaise de Developpement("AfD").
The project will be implemented by the National Authority for Tunnels ("NAT"), a government agency under the jurisdiction of the Ministry of Transport ("MOT") and will be carefully co-ordinated with the Egyptian Company for Metro ("ECM"), the operator, as the rehabilitation will take place while the line is in operation.
The Bank has developed an Integrated Approach ("IA") to Cairo's urban transport sector which comprises a series of investments across all modes of urban transportation in Greater Cairo focusing on improving functionality, quality and efficiency of public transport services. The objective of the IA is to achieve greater commercialisation of services, enhanced private sector participation, improved regulation, and increased opportunities for on the job training as well as the use of carbon monetisation mechanisms.
The proposed project is the second of a series of investments presented under the IA. It is designed to provide the needed rehabilitation of Cairo Metro Line I's existing infrastructure with an aim to restore it to its original design capabilities and potentially reduce traffic headway (minimum possible time between two trains) to increase capacity through introduction of CBTC signalling technology.
Accordingly, the project will enable the provision of safe, reliable and environmentally friendly transportation for up to 2 million passengers per day and provide energy efficiency and emissions savings.
The Integrated Approach aims to enhance the economic integration in Cairo through improved quality and level of urban transport services in the city. Improved urban transport services will be promoted through targeted investments in various transport modes and through improved governance of the sector. The governance improvements will primarily come through the strengthening of a single planning and regulatory transport authority for public transport in Cairo metropolitan area and through the introduction of public service contracts between the transport authority and public transport operators. Improved efficiency and sustainability are also expected to come through the expertise provided by further private sector participation and adequate price signals and funding within the sector.
The project will support the objectives of the IA through (i) contributing to the Bank's efforts in promoting and implementing a Public Service Contract ("PSC"); (ii) supporting NAT and ECM in exploring the commercialisation of metro stations to enhance the service quality, increase nonfare revenues and demonstrate the benefits of private sector involvement; (iii) supporting the implementation of a Financial and Operational Performance Improvement Programme ("FOPIP") to assist the operator in improving financial sustainability through the introduction of an asset management strategy and policies and (iv) building the capacity of the Greater Cairo Transport Regulatory Authority ("GCTRA").
National Authority for Tunnels ("NAT")
In 1983, NAT was established by a special law 113 which authorised this newly created government agency to plan and execute tunnels and metro infrastructure projects in Egypt, including management of the full process of tendering and procurement of rolling stock under the jurisdiction of the Ministry of Transport. NAT has successfully implemented the construction of 75 kilometres of metro lines, worth over EGP 23 billion (EUR 1.0 billion).
EBRD Finance Summary
Total Project Cost
Environmental and Social Summary
Categorised B (2014ESP). The expansion, renovation and upgrading of the Cairo Metro Line I's infrastructure will mainly result in net positive impacts in safety improvements, reliability and efficiency of the current line's operations. During construction and implementation, the project will be associated with some environmental and social risks and adverse impacts, although those are expected to be site-specific and can be addressed through appropriate mitigation measures and good construction practices.
Environmental and Social Due Diligence ("ESDD") is currently ongoing and being undertaken by independent consultants as part of the Feasibility Study. Methodology for ESDD includes site visits to the current line infrastructure; the Torah maintenance depot; and interviews with NAT's relevant departments. The key E&S issues identified so far are associated with contractor and labour management, temporary disruptions to traffic and current line operations, occupational health and safety and stakeholder engagement. This PSD will be updated once ESDD is completed, and a Non-Technical Summary, a Stakeholder Engagement Plan, and the Environmental and Social Action Plan will be disclosed prior to Board approval.
The project is expected to benefit from the following Technical Co-operation assignments
TC 1: Due diligence review of the technical, financial, environmental and social components of the proposed investment, including review of existing detailed design, technical specifications and tender strategy prepared by ECM/NAT. The cost of the assignment is up to EUR 250,000 financed by the EBRD Shareholder Special Fund ("SSF").
TC 2: Procurement Support to include the organisation of a transparent procurement process for the project as well as assistance with support to NAT for the preparation of tender documents as per application of the EBRD PP&Rs for the contracts proposed for financing by the EBRD. The estimated cost of the assignment is up to EUR 270,000, proposed to be financed by an international or the EBRD Shareholder Special Fund ("SSF").
TC3: Project Implementation Support to assist the Project Implementation Unit ("PIU") with project implementation including review of the technical requirements, mitigation of environmental and social impacts and risks, contract management and administration, as well as assistance with compliance to loan requirements. The estimated cost of this assignment is up to EUR 800,000, proposed to be financed by an international donor, the SSF, or the loan.
TC 4: Asset Management and Safety Programme. This TC will complement the existing FOPIP under the Cairo Metro project signed in 2015 and focus on assisting NAT in establishing and implementing asset management practices and further efficiency improvements, including the assessment of potential private sector involvement. In addition, the Programme will assist ECM in implementing a safety management system. The estimated cost of the assignment is up to EUR 500,000, proposed to be financed by an international donor or the SSF.
TC5: The Lender Supervisory Services to the Bank to provide comprehensive support for monitoring of the project and covenant compliance of the loan agreement. The estimated cost of the assignment is up to EUR 500,000; proposed to be financed by an international donor, the SSF, or the loan.
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