Kriva Palanka - Bulgarian Border Road


North Macedonia

Project number:


Business sector:


Notice type:


Environmental category:


Approval date:

05 Sep 2018



PSD disclosed:

13 Oct 2017

Translated version of this PSD: Macedonian

Project Description

Provision of a sovereign-guaranteed loan in the amount of up to EUR 12 million to Public Enterprise for State Roads (PESR) to finance the construction works for the rehabilitation of a single twolane carriageway road section, 13.5 km in length, between Kriva Palanka and Deve Bair near the Bulgarian border. The loan will be guaranteed by FYR Macedonia.

The project is part of the eastern section of Pan-European Corridor VIII.

Project Objectives

Support FYR Macedonia's economic development and contribute to its regional integration by improving connectivity within its regions and between FYR Macedonia and the EU.

Transition Impact

The project will support FYR Macedonia's economic development and regional integration through improved connectivity between FYR Macedonia's north-eastern regions and the rest of the country as well as between FYR Macedonia and the EU.

The project will help PESR develop a corporate plan to improve the efficiency of its operation by strengthening the company's asset maintenance and revenue collection practices.

Client Information


PESR is a state-owned company responsible for the operation and maintenance of the national and regional road network in FYR Macedonia.

EBRD Finance Summary

EUR 10,000,000.00

A sovereign-guaranteed loan of up to EUR 12 million to PESR.

Total Project Cost

EUR 16,400,000.00

The total project cost is estimated at EUR 16.4 million.

Environmental and Social Summary

Category B (ESP 2014). The Public Enterprise for State Roads (PESR) intends to rehabilitate and reconstruct the existing state road Kriva Palanka – border crossing “Deve Bair” (the Project). The project is situated in the northeast part of the Former Yugoslav Republic of Macedonia (FYR Macedonia). Total length of the affected road is approximately 13km.

The Project will primarily involve the widening of parts of the existing road, re-alignment of one short stretch, repair or replacement of some of the existing bridges, and the replacement of the asphalt and safety barriers for the entire stretch. Overall, the Project is expected to deliver a number of benefits: (i) improved connectivity with the neighbouring country Bulgaria; (ii) improved internal connectivity in the northeast part of the FYR Macedonia including improved facilitation of exchange of goods and services, better access for support of tourism, industry, agriculture etc.; and (iii) improved safety along the road.

An Elaborate for Environmental Protection (EEP) was prepared in accordance with national requirements and contains: information on the environmental & social characteristics of the area likely to be affected; environmental & social protection objectives for the area; likely environmental and social effects; measures to reduce offset and monitor adverse effects; and an assessment of alternatives. The EPP was approved by the Ministry of Environment and Physical Planning (MoEPP), as the responsible authority. A Road Safety Audit (RSA) in line with EU Directive 2008/906/EC has also been undertaken for the Project by independent consultants on behalf of EBRD. As a result, PESR has committed to include all technically and economically viable recommendations of the Road Safety Audit into the final Project design. Further, key environmental & social  project preparation documents (e.g. EEP, Non-Technical Summary, Stakeholder Engagement Plan, Land Acquisition Framework) have been uploaded to the PESR website (

The Project will not result in any physical displacement/resettlement; however limited land acquisition, which is currently a mix of State and privately-owned land, will be required. The Project will also require some temporary land take for access roads, construction laydown areas, temporary storage of excavated materials/soil etc. Accordingly, a Land Acquisition Framework (LAF) has been prepared by PESR. This document has been developed in accordance with the Macedonian legal framework and in compliance with EBRD’s Performance Requirement 5 (PR5): Land Acquisition, Involuntary Resettlement & Economic Displacement. The LAF presents the displacement impacts associated with the Project and the compensation and resettlement principles and responsibilities to ensure no one affected by the Project’s implementation is disadvantaged compared to current conditions. The LAF includes a grievance mechanism for people affected by land acquisition to raise their concerns. A Resettlement Action Plan (RAP) or Livelihood Restoration Plan (LRP) will be developed in accordance with the LAF and is included as a condition of the ESAP.

The EEP has not identified any species and/or habitats of conservation importance to be impacted by the project. The project (and existing road) however intersects with a candidate Emerald Site for about 1 km, although for all except for 200 m of this, no road widening and/or land take is required (only rehabilitation of the existing road and road surface). The 200m length within the proposed protected area involves the taking of a narrow 3.5 m wide strip of land immediately adjacent to the existing road, which is already significantly degraded. Therefore there is no anticipated effect on the overall candidate Emerald Site. The project will also pass through a proposed UNESCO Transboundary Man and Biosphere Reserve; however, in this area, the road already exists, and no widening will occur. The only works are the rehabilitation of the existing road and road surface, and the restoration of the existing bridges. This interaction is therefore not considered to be significant. The Bank’s due diligence has identified that the MoEPP is fully aware of the location of this road corridor, which was described in the Elaborate for Environmental Protection, and has taken this into account when issuing the Environmental Permit.

To date, PESR has based its stakeholder engagement on the requirements of national law and EBRD’s PR10, which has included the development and implementation of a Stakeholder Engagement Plan (SEP). Engagement to date is considered to be reasonable for a Project of this scale and nature. Additional engagement is envisioned in 2018 in advance of future construction activities.

Environmental and social due diligence (ESDD) was undertaken by independent consultants and included benchmarking the project design and EPP against the Bank’s PRs. Overall, the project was determined to be structured in material compliance with relevant national,  EU and EBRD requirements. To address the gaps identified as part of the ESDD, an Environmental and Social Action Plan (ESAP) was developed and includes, but is not limited to: (i) the need to develop and implement construction environmental and social management plans, (ii) requirement to engage an external consultant to develop a RAP/LRP, (iii) the need to develop a Chance Finds Procedure in accordance with the requirements of Macedonian law and EBRD PR8 for the construction period, and (iv) An additional public consultation meeting, to address the potential need for & community acceptance of noise barriers at sensitive receptors, land access and acquisition needs for the Project and introduction of the LAF to be carried out prior to construction. The ESAP has been agreed in principle between EBRD and PESR but will need to be finalised prior to Board.

The Bank will monitor the development of the project in accordance with its commitments outlined in the Environmental & Social Policy (2014).

Non-Technical Summary: English | Macedonian
Stakeholder Engagement Plan: English | Macedonian
Land Acquisition Framework: English | Macedonian

Technical Cooperation

  • Project Implementation Support.
  • Preparation of a Corporate Plan for the organisational strengthening of PESR.

Company Contact Information

Martin Cekov
+389 2 3118 044
+389 2 3220 535
Page 3
Str. Dame Gruev 14 1000 Skopje Macedonia

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