Project number:


Business sector:

Municipal and environmental infrastructure

Notice type:


Environmental category:


Approval date:

06 Jul 2004



PSD disclosed:

04 Feb 2005

Project Description

The objectives of the proposed project will be to:
(i) finance 50 new buses, spare parts and workshop equipment
(ii) provide advice on the restructuring of the institutional and regulatory framework for public transport in Kaunas.

Transition Impact

  • Reforming the City-Company Relationship via a new Public Service Contract (the PSC): The PSC will define the scope of services provided by the Kaunas Bus Company and set the level for service payments by the city for the services purchased. The service payment will replace the existing system of subsidies and provide incentives for the Kaunas Bus Company to improve its financial and operational performance.
  • Restructuring of Public Transport System: The Bank will provide assistance to reform the regulation and management of the public transport system by: (i) making recommendations to optimise the roles of the various modes of public transportation; (ii) implementing a route-tendering regime that encourages competition; and (iii) making recommendations for effective regulation to improve safety and pollution. 
  • Demonstration effect: This would be the first transaction in which the Bank would lend directly to a municipal transport company without a full sovereign or municipal guarantee.

The Client

The Kaunas Bus Company (Kaunas Autobusai).

EBRD Finance

Up to € 10.0 million senior loan to the Kauno Autobusai.

Project Cost

€ 10.5 million.

Environmental Impact

The modernisation of the bus fleet will help develop public transport alternatives as well as improve the air quality in Kaunas. The tender specifications will address air emission and fuel efficiency requirements in line with the European Union's environmental standards for urban buses.

Technical Cooperation

Services to prepare: (i) a Public Service Contract between the City of Kaunas and the Kaunas Bus Company; (ii) a Business Plan for the Kaunas Bus Company; and, (iii) the specifications and tender for the purchase of the buses.
Services to prepare a comprehensive Public Transport Restructuring Advice Programme (PTRAP) to provide the services in relation to restructuring described above in the Transition Impact section.

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

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Text of the PIP

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