Sofia Public Transport Sector Reforms - Sofia Municipality



Project number:


Business sector:

Municipal and environmental infrastructure

Notice type:


Environmental category:


Approval date:

12 May 2011



PSD disclosed:

17 Jan 2011

Translated version of this PSD: Bulgarian

Project Description

This transaction is part of the Bank’s Public Transport Reform Project covering essential areas of the Sofia’s urban transport system including 4 loans worth a total €24.96 million to Sofia Municipality, Urban Mobility Centre Ltd (UMC), Sofia Electric Transport Company JSC (SETC) and Metropolitan JSC (Metropolitan). The project IDs for the projects are: 42140, 42559, 42561, 42562.

Under this transaction the Bank is considering providing a loan of €5.96 million to the City of Sofia, representing the Bank’s co-financing contribution to the City’s Integrated Urban Transport Project (IUTP), jointly funded with EU grants under Operating Programme Regional Development (“OPRD”) on a blended basis. Total EU project cost amounts to €61.69 million of which up to €42.5 million will be provided by the EU Cohesion Fund on a grant basis.

The EU funded programme supports the upgrade and the expansion of the electrical transport in the City, introduces intelligent, adaptative control traffic management system, real time passenger information both within public transport fleets and at public transport stops.
As part of the Project the Municipality will revise its existing contract with UMC to convert it into a Public Service Contract (PSC) compliant with EU regulation 1370. The contract also will define concrete funding commitments which will ensure that the public transport system is appropriately funded in future.

Transition Impact

It is expected that the combined transition impact potential of the four proposed project should come from the following factors:

  • Framework for market functioning will be strengthened by the introduction of a new contractual arrangement (Master PSC) between the Municipality and UMC which will provide a transparent division of responsibilities to achieve a sustainable level of public transport services, secure stable funding for operators and establish a clear methodology for managing the demand risk. The Master PSC will effectively create a seamless relationship between the City as owner of public transport assets, UMC as its transport agency and regulator, and public transport operators. This Master PSC will detail the roles and obligations of UMC in respect of regular and substantive reporting to the City Council concerning operational planning, performance indicators, revenues flows (actual versus projected), tariff proposals, ticketing management and management efficiency of the various operators.
  • Demonstration Effect: The range of enhancements to the public transport system, from the integrated, technology-led investments in traffic management to enhance travel times, to the expansion of the ticketing system and the introduction of a Master PSC arrangement with UMC as transport agency and regulator, provides a strong example to other major cities in the Bank’s region. Strengthening UMC will provide for a better, more predictable commercial platform for private and public companies to provide operationally and financially sustainable services. During an era of fiscal austerity and public sector restrictions, the package of investments and measures supported by the EU and the Bank in Sofia should have a positive demonstration effect to other municipalities as they work through the economic downturn.

The Client

The City of Sofia.

EBRD Finance

The size of the Bank loan to the Municipality is up to €5.96 million.

Project Cost

The project cost of the Sofia Municipality transaction is estimated to €61.69 million.

The total size of all related projects under the Bank’s Public Transport Reform Project is estimated at €94.63 million.

Environmental Impact

As part of the due diligence process the four proposed transactions under the Public Transport Reform Project are reviewed together to estimate their combined impact.

The project has been categorised B in accordance with EBRD's 2008 Environmental and Social Policy. The proposed integrated investment programme is expected to provide improvements to the quality, safety, accessibility and energy efficiency of the public transport system in Sofia.

The due diligence included a corporate review of Sofia Municipality and the Municipality owned transport companies (Centre for Public Mobility (CPM) /Public Services Contracts (PSC), Sofia Electrical Transport Company and Metropoliten JSC), incorporating an assessment of their current environmental and social management systems, past and current performance against EBRD's Performance Requirements (PRs). An environmental and social analysis of the potential environmental and social impacts and benefits of the integrated investment programme was also completed. The due diligence also included a review of the reports prepared by the JASPERS consultants as part of the project preparation for grant funding under the Operating Programme ‘Regional Development’.

The due diligence has confirmed that the integrated investment programme has been structured to meet Bulgarian and EU environmental, social, health and safety standards. Due diligence identified that some improvements are needed to achieve compliance with EBRD’s Performance Requirements (PR’s). Issues to be addressed include: additional environmental, health and safety, social and security requirements in contract specifications; monitoring of contractor environmental, health and safety performance; strengthening of grievance mechanisms for workers and the public and maintenance of a Stakeholder Engagement Plan (SEP).

The benefits of the project are expected to include reduced air pollution and GHG emissions associated with modal shift towards public transport vehicles. A SEP has been disclosed on the web and includes details of the project, a grievance mechanism and will be used to meet the Bank's public disclosure requirements for B-level projects.

An Environmental and Social Action Plan (ESAP) has been prepared and agreed for the Project to to achieve and maintain compliance with the Bank's PRs within a reasonable time-frame.

A Project Implementation Unit (PIU) will be formed for the implementation and management of this Project and the responsibilities of CPM, SETC and Sofia Municipality will be determined and communicated to stakeholders. In addition, the Municipality Company will provide the Bank with regular reporting on the implementation of the ESAP.

Technical Cooperation


  • Assistance to the City to complete a Master Public Service Contract to meet EU regulations. Estimated at €100,000.

Business opportunities

For business opportunities or procurement, contact the client company.

For state-sector projects, visit EBRD Procurement: Tel: +44 20 7338 6794

General enquiries

EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168

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. Please visit the Public Information Policy page below to find out how to request a Public Sector Board Report.
Text of the PIP

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