Corridor Vc Completion Project

Translated version of this PSD: Croatian

Project Description

The EBRD is considering providing a €60.7 million facility to Croatian Motorways (“HAC”), the state-owned company in charge of the motorway network in Croatia, to finance the construction of 12.53 km of motorway sections along Corridor Vc in Croatia connecting the northern and southern ends of the corridor at the border with Bosnia and Herzegovina (BiH). The loan will be guaranteed by the Republic of Croatia. The Project will be co-financed by EIB.

Corridor Vc is one of the three major Trans-European corridors within the region and the completion of the Croatian part of Corridor Vc adjacent to Bosnia and Herzegovina will allow for the full regional motorway linkage along the Corridor and complement the Bank’s existing funding of the Corridor Vc sections in Bosnia and Herzegovina and Hungary, and the Port of Ploce, the maritime gateway for Corridor Vc.

Transition Impact

The Project will support the development of Corridor Vc as an integrated regional corridor by ensuring the physical continuity of the corridor on Croatian territory and connecting it to the Croatian motorway network. It will also facilitate improvements in the safety and efficiency of border-crossings on this corridor with Bosnia and Herzegovina.

The transition impact of the Project will result from the following:

(i) Support of greater efficiency of border crossing custom and immigration procedures resulting in higher trade flows along the Corridor Vc
(ii) Institutional Strengthening through the improvement of procurement policy and practices at HAC.
(iii) Further commercialisation of HAC through potential private sector participation in tolling and maintenance operations.

The Client

The client is HAC, which is responsible for developing and maintaining the motorway network and other tolled activities in Croatia. HAC was established by Government decree on 9 April 2001 as a state-owned limited liability company, following the restructuring of the Croatian Road Authority. HAC reports to the Ministry of Sea, Transport and Infrastructure.

Contact:

Croatian Motorways
Sirolina 4
10 000 Zagreb
Croatia

Dijana Stopnisek, Head of Financial Markets Division
+ 385 1 46 94 438
Dijana.stopnisek@hac.hr

EBRD Finance

The Project involves the provision of a sovereign guaranteed loan by the EBRD to HAC of up to €60.7 million.

Project Cost

The total project cost is €166.30 million.

Environmental Impact

Categorisation and justification

The Project has been categorised A. An ESIA is required in accordance with Croatian law and Appendix 1 of the 2008 EBRD Environmental and Social Policy.

Information reviewed

The appraisal of this project has been undertaken by independent consultants based on the Environmental Impact Assessments (EIA) prepared prior to EBRD’s involvement under Croatian regulatory requirements, permits and decision documentation. These documents are available on the HAC website

Environmental and Social issues

The Croatian EIA for the Northern Section was disclosed in 2003 in compliance with Croatian Law, and Location Permits have been issued with special conditions. The Croatian public hearing process for the EIA for the Southern Section is currently underway, in parallel with EBRD disclosure. A Stakeholder Engagement Plan (SEP) has been prepared for the project.

The main potential environmental impacts of the project identified in the EIAs are noise, impacts to surface and groundwater (with potential for transboundary impacts into Bosnia and Herzegovina), sourcing of construction materials, loss of biodiversity and cultural heritage. Potential social impacts considered in the Non Technical Summary are: the influx of construction workers, construction related nuisances (including traffic disruption), land acquisition and road safety.

UNECE Convention on EIA in a Transboundary Context (“Espoo Convention”) applies to the project and comments from BiH authorities on the southern section EIA have been requested. For the northern section, the requirements of the Espoo Convention were not applied when the EIA was originally released but are being addressed now and HAC has formally notified BiH of the availability of the Northern Section NTS and EIA for comment.

The Northern Section passes through the River Sava foreshore area, a recognised ecologically valuable floodplain expected to be designated as part of the National Ecological Network (Natura 2000). Although some rare, endangered or protected species are found in the vicinity of the area affected by the motorway, their habitat is only partially within the zone affected by the construction and operation of the motorway. The Southern Section does not transect any areas protected under the Law of Nature or the National Ecological Network, however it crosses two nationally designated endangered and rare habitats for which specific mitigation measures have been defined. The Bank therefore required the preparation of a Biodiversity Management Plan (BMP) to be included in the Environmental and Social Action Plan (ESAP).

Land acquisition for the Project is not expected to result in any involuntary resettlement. Land needed for the Project will be compensated in line with expropriation laws. The Bank has required the preparation of a Project Land Acquisition and Compensation Framework to be included in the ESAP.

Environmental or social opportunities

The project is expected to contribute to the economic development of Croatia due to the improvements in accessibility improving trade and tourist activities.

Summary of Environmental and Social Action Plan

An Environmental and Social Action Plan (ESAP) has been agreed, defining the environmental and social mitigation and monitoring measures that will need to be adopted during construction and operation to meet EBRD policy requirements. The ESAP includes requirements on contractors to provide the following: an EMS Manual, Soil Management Plan; Social Management Plan; Hazardous Materials Management Plan; River Crossings Management Plan and Emergency Response Plan.

Monitoring

The EBRD will evaluate the project's compliance with the applicable environmental and social requirements during the lifetime of the project by monitoring visits and reviewing Annual Environmental and Social Reports (AESRs) prepared for the project.

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

Technical Cooperation

The following technical co-operation funds are envisaged as part of this project to:

(i) assess HAC’s existing procurement procedures and support development of a revised improved Procurement Policy. (€150,000 – this assignment has commenced and is on-going)

(ii) Assist HAC to develop and implement a Corporate Strategy, which defines options for the separation and further commercialisation of maintenance and tolling activities to achieve better cost efficiency and transparency of these operations. (€250,000 - this assignment is expected to start in June 2011.)

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