Pan-European Corridors

Project Description

The EBRD is considering providing a sovereign loan of up to EUR 450 million in order to support

(i) the rehabilitation and upgrading of road approaches to Kyiv – road sections on international and key national highways M-01, M-05, M-06, M-07, N-01 and R-02, and

(ii) performance-based road maintenance contracts for M-06 road, which will be introduced on a pilot basis in Ukraine. The Project will also finance works supervision and technical advice for the proposed reform component.

Transition Impact

Transition impact would stem from further support by the EBRD of the Government of Ukraine and Ukravtodor efforts to reform the road sector, in the areas of :

• Improvements in the road sector financing.
• Introduction of performance-based maintenance contracts.
• Implementation of the ongoing road sector restructuring programme.

The Client

The Borrower is Ukraine. The proceeds will be on-lent to Ukravtodor, State Road Service of Ukraine.

EBRD Finance

Sovereign loan of up to EUR 450 million to be provided in two tranches (Tranche 1: M-06 and M07, and Tranche 2: M-01, M-05, N-01, R-02 and Zhytomyr Bypass on M-06).

It is expected that the European Investment Bank will provide a loan of up to EUR 450 million to co-finance the Project.

Project Cost

EUR 1,150 million.

Environmental Impact

Categorisation

Following an Initial Environmental and Social Examination, the Project was categorised “B” per the Environmental and Social Policy (2008). The Project mainly consists of upgrades to existing roads within the existing rights-of-way, and the IESE has demonstrated that environmental and social issues could readily be identified and mitigated.

The widening from 1x2 to 2x2 lanes of the Zhytomyr bypass (24km), considered under Phase 2 of the Project, might warrant an “A” categorisation. It was verified that this particular component did not raise any potential significant adverse future environmental or social impacts and issues which cannot readily be identified and mitigated. If this component is indeed included in Phase 2 of the Project, “A” level due diligence will be provided specifically for the Zhytomyr bypass, including a full Environmental and Social Impact Assessment and a 120-day disclosure period.

Potential Environmental and Social Issues

Main potential environmental and social issues include:

• Construction impacts, including noise, construction related traffic, vibration, dust, waste and construction material management, construction camps, worker and community safety;
• Noise and air emissions during operations;
• Impacts of both construction and operations on water bodies (a number of rivers and wetlands, some of which sensitive and/or protected) are intersected by the widened sections, and the Project includes upgrades to crossings);
• Road safety during operations.

Environmental and Social Due Diligence

For the first tranche of works (M06 and M07), independent consultants carried out an Environmental and Social Analysis, prepared a Stakeholder Engagement Plan, an Environmental and Social Action Plan and a Non Technical Summary for public disclosure. For the second tranche, the process will be the same except for the Zhytomyr bypass (see above). All documents have been received and reviewed by the Bank and are to be disclosed shortly by Ukravtodor. The Environmental and Social Due Diligence (ESDD) for the second tranche will be undertaken well ahead of the commencement of associated works and is a condition precedent for the second tranche commitment.

Detailed due diligence confirmed that all environmental and social issues and impacts could be mitigated. The requirements of the Bank’s Environment and Social Policy will be met through a set of mitigation measures, mainly including:

• Noise: installation of noise screens where needed;
• Potential impacts on water bodies: state-of-the-art storm water collection and treatment techniques;
• Construction impacts: Contractors will be expected to prepare waste management, erosion control, and traffic management plans.

The Bank will monitor implementation of the Environmental and Social Action Plan.

In 2019 Ukravtodor approached the EBRD and EIB with a request for reallocation of the loan savings realised on the existing Project components towards the financing of an additional component on the M-05 Kyiv-Odesa road section km 87-128. This component envisages the rehabilitation of an existing road section within the current road boundaries and no land acquisition or resettlement expected. The whole section (km 87-128) was split into 6 sub-sections and a full set of the design documents, local EIAs and state expertise were developed and received for each sub-section separately.  The environmental and social impacts are expected to be site specific, limited only to the construction period and mitigated by adequate mitigation measures. Additional Environmental and Social Due Diligence is currently underway by an independent consultant and this section shall be updated once the ESDD is completed.

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

Technical Cooperation

None.

 

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