National Roads Programme

Country:

FYR Macedonia

Project number:

45987

Business sector:

Transport

Notice type:

Public

Environmental category:

A

Target board date:

11 Nov 2014

Status:

Disbursing

PSD disclosed:

01 Sep 2014

Translated version of this PSD: Macedonian

Project Description

EBRD is considering extending a sovereign guaranteed loan of up to €160 million. The loan proceeds will be used to finance four national road sections in FYR Macedonia. Much of Macedonia’s national road network is aged and it follows existing routes that have been progressively upgraded in status, but still contain poor alignments with inadequate capacity and safety standards. The project will be divided into two tranches as follows:

Tranche 1: Reconstruction and widening of the section Stip– Kochani of national road A3 (approx. 27km); Construction of the section Raec - Drenovo of National Road A1 (approx. 10km).

Tranche 2: Construction of the section Trebenista- Struga of National Road A2 (approx. 8km); Construction of the section Ohrid - Pestani of National Road A3 (approx. 12km).

In addition, the loan will fund a digital archiving system.

Transition Impact

The transition impact of the project is based on the following:

  • Increased competition and private sector involvement by tendering the maintenance of part of the project road sections together with the construction works.
  • Improving standards for corporate governance and business conduct: IT capacity building to help PESR manage its assets and implement investments more efficiently; ISO 9001 certification for quality management.
  • Road Safety standards: Development of internal requirements for Road Safety Auditors based on a regional benchmarking study; implementation of a Road Safety Management System in accordance with ISO 39001.   

The Client

The Borrower is the state-owned Public Enterprise for State Roads (“PESR”). PESR is responsible for the operation and maintenance of the national and regional road network in FYR Macedonia (“the State”). It was established in December 2012 as legal successor to the Agency for State Roads.

EBRD Finance

Sovereign guaranteed Loan of up to €160 million, to be provided in two tranches of up to €74 million and up to €86 million respectively, with each tranche financing two National Road sections. The second tranche will be uncommitted and commitment will be at the Bank’s sole discretion and subject to Board approval.

Project Cost

€209.5 million.

Environmental Impact

The overall project has been categorised as A. 

The four road sections have been split into two tranches with the Raec-Drenovo road section in Tranche 1 and the Ohrid-Pestani road section in Tranche 2 categorised as A and both requiring an Environmental and Social Impact Assessment (ESIA) as they are new roads of four lanes of 10 km or more and located in sensitive locations with protected areas. The A3 Stip- Kocani and A2 Trebenishta – Struga roads have been categorised B as the roads are a combination of rehabilitation, road widening and new road alignments of less than 10km.

The four national road projects are being prepared to comply with the national legal framework within Macedonia, which has transposed the main obligations of the Environmental EU Directives. Environmental and social due diligence (ESDD), undertaken by an independent consultant, has confirmed that the project is structured to meet the Banks Performance Requirements (PRs) with the implementation of Environmental and Social Action Plans (ESAP) prepared for the individual road sections.

Land acquisition and compensation requirements are to be addressed in compliance with PR 5 through the implementation of Land Acquisition and Compensation Frameworks and supporting plans all four road projects. No physical resettlement is anticipated for the Tranche 1 road sections.

Independent Road Safety Audits are planned for each road section in line with the principles of the European Directive on Road Infrastructure Safety Management (Directive 2008/96/EC Road Infrastructure Safety Management).

Tranche 1: Reac-Drenovo Road

Alongside the approved local Environmental Impact Assessment (EIA) for the Reac- Drenovo road an updated Non-Technical Summary (NTS), including more information on the project alternatives, biodiversity, air and noise emissions, social and cumulative impacts, was publicly disclosed together with a Stakeholder Engagement Plan (SEP), Land Acquisition and Resettlement Framework (LARF) and ESAP.   More information

The Raec to Drenovo road section lies within the Drenovo Gorge Protected Area (Monument of Nature, Emerald site).  ESDD identified that the impacts on natural and critical habitats and species were not adequately described and mitigated in the local EIA documentation and as a result a Critical Habitats Assessment (CHA) was commissioned. The CHA, including proposed mitigation measures and potential offsets, is being prepared and reviewed by independent experts and will be publicly disclosed.

Stip-Kocani Road

An initial project summary document has been prepared for the Stip-Kocani road outlining the environmental and social impacts of the project and includes a supporting ESAP.  More information

Tranche 2: Trebenista - Struga

The exact alignment of the new 8km road has not yet been identified so due diligence has been based on the preliminary alignment, although this may be refined during the design process. An Initial Project Summary document has been prepared and an outline Environmental and Social Action Plan (ESAP) has been agreed focusing on the preparation phase to enable the project to be structured to meet the Banks PRs. More information

Ohrid - Pestani

An Environmental and Social Impact Assessment (ESIA) is currently being prepared for the Ohrid- Pestani road to address the findings from the ESDD, which identified a number of issues to be addressed to enable the project to be structured to meet the Banks PRs.

There are a number of planned infrastructure improvement projects alongside Ohrid Lake and within the Galicica National Park (NP). The Galicica NP Authority is therefore in the process of proposing amendments to the Galicica National Plan Management Plan to accommodate these new projects. Fifty four hectares on the fringe of the NP are expected to need to be rezoned to accommodate the road, a buffer zone and incorporate some fragmented areas. The NPA does not expect significant biodiversity impacts from the road.

At this stage the final land acquisition needs of the project are yet to be finalised but a Land Acquisition and Resettlement Framework (LARF) will be prepared in compliance with PR 5 and disclosed for the project.

The disclosure of a fit for purpose ESIA, LARF, SEP and agreement of an ESAP for the Ohrid-Pestani road will be completed prior to the commitment of Tranche 2, including the required public disclosure and consultation.

Both the Ohrid- Pestani and Trebenishta – Struga roads are located within the Ohrid Lake UNESCO World Heritage designation of a property of Outstanding Universal Value (OUV) and the transitional zone of the proposed Transboundary Biosphere Reserve, which has been proposed jointly by Macedonia’s Ministry of Environment and Physical Planning, and Albania’s Ministry of Environment, Forestry and Water Administration.  As a result both projects within Tranche 2 will include an assessment of the potential impact to the OUV.

Environmental and Social Action Plans

The ESAPs agreed include actions required in order to achieve the Bank’s Performance Requirements for both the construction and operational phases of the Projects. The Project will be monitored by the Bank in line with the commitments in the ESAP, regulatory requirements and the Performance Requirements.

PESR will provide the Bank with annual environmental and social reports, including updates on the implementation of the ESAP and resettlement action plans. The Bank will conduct monitoring visits, as required, and commission a completion audit.

This PSD will be updated prior to the financing of Tranche 2.

There is an Environmental and Social Impact Assessment available for this project.

Technical Cooperation

The following Technical Cooperation support is envisaged as part of the project:

  • Project Implementation Support
  • Road Safety Audits and Survey of Regional Standards
  • Road Safety Capacity Building
  • IT Capacity Building

Company Contact

Aleksandar Stojanov
Public Enterprise for State Roads
Assistant Director of Investment Sector
Dame Gruev str. 14
1000 Skopje

Tel: +389 2 3118044
E-mail: a.stojanov@roads.org.mk

 

Business opportunities

For business opportunities or procurement, contact the client company.

For state-sector projects, visit EBRD Procurement: Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

Public Information Policy (PIP)

The PIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations.
Text of the PIP

Project Complaint Mechanism (PCM)

The Project Complaint Mechanism (PCM) is the EBRD's accountability mechanism. It provides an opportunity for an independent review of complaints from individuals and organisations concerning EBRD-financed projects which are alleged to have caused, or are likely to cause, environmental and/or social harm.

Please visit the Project Complaint Mechanism page to find information about how to submit a complaint. The PCM Officer (pcm@ebrd.com) is available to answer any questions you may have regarding the submission of a complaint and criteria for registration and eligibility, in accordance with the PCM Rules of Procedure.