Loan to Bucharest Municipality



Project number:


Business sector:

Municipal and environmental infrastructure

Notice type:


Environmental category:


Approval date:

07 Apr 2020



PSD disclosed:

07 May 2020

As permitted by paragraph 2.6 of Section III of the Access to Information Policy, disclosure of this PSD was deferred in accordance with paragraph 1.4.4 of the Directive on Access to Information.

Project Description

Provision of a loan in the amount of RON 555 million (circa EUR 115 million) to the City of Bucharest that will support Romania's capital to fully repay five-year bonds maturing on 4 May 2020, as part of the Bonds Programme launched by the City in 2015. The project was originally designed to be financed with ten-year municipal bonds, in which the Bank would have invested in up to 20%. In the wake of Covid-19 crisis, the Bank agreed with the City to convert its financing into a loan as market conditions were no longer conducive to a bond.  The City remains firmly committed to its Bond Programme. The Bank's loan has a tenor of up to three years and a bullet repayment, allowing Bucharest to return to the capital markets once conditions improve.

Transition Impact

ETI score: 61

The project demonstrates the "resilience" and "well-governed" transition qualities through its support for ongoing  capital market development, improved reporting and corporate governance.  It also supports the "resilience" quality by enabling the Bank to help maintain confidence in municipal bond offerings through a smooth refinancing. In addition, it enables the Bank to continue its ongoing policy dialogue discussions with the City of Bucharest, with a particular focus on corporate governance at the utility level.

Client Information


The Municipality of Bucharest is the capital and largest city of Romania, with around 1.9 million inhabitants, split into six sectors, each with its own administrative body. It is also the political and economic hub of the country, being home to the legislative body and generating over 24% of the country's GDP, with local GDP more than twice that of the national average. 

In January 2020, Fitch reaffirmed ratings for Bucharest City at "BBB-", with stable outlook. Fitch said that the affirmation reflects Bucharest's continuing sound operating performance, moderate debt levels relative to the city's operating balance and current revenue, and sound debt ratios.

EBRD Finance Summary

RON 555,000,000.00

Total Project Cost

RON 555,000,000.00

Environmental and Social Summary

Categorised B (ESP 2019). Low i Medium risk.  The proceeds of the loan are being used to refinance the City's existing municipal bonds (initially issued in 2015 as a refinancing of a Eurobond), and are not envisaged to be directed at specific physical assets or any new capex investments. Therefore, Environment and Social (E&S) due diligence focussed on assessing the risks and impacts associated with the City's existing E&S management systems, practices and compliance record of the existing operations. This has been done through review of publicly available documentation and the reporting which the client has produced on previous projects. Bucharest City's corporate Environmental and Human Health, Safety and Security (EHSS) practices, their internal management systems and practices are deemed adequate and generally in line with the EBRD's Performance Requirements. The loan agreement with the City includes specific E&S provisions, in particular that the City shall develop and maintain environmental and social management systems and carry out its operations and investment activities in compliance with the quality and environmental standards, respective ISO 9001 and ISO 14001 standards for which the City is already certified  and in compliance with the occupational health and safety requirements in accordance with European legislation in the field and EBRD Performance Requirements. Also, (i) the City will comply with the EBRD Performance Requirements, and (ii) any high risk projects or projects categorised "A" in line with EBRD's Environmental & Social Policy 2019 will not be financed through the proceeds of this loan.

Technical Cooperation and Grant Financing

The Bank will assist the City through dedicated training programmes with the purpose to improve governance and diversify financial mechanisms for the future investments, including areas such as public-private partnerships, blending mechanisms, public service improvements, environmental and social improvements, capital markets, green bonds investments, and similar subjects.

Company Contact Information

47 Regina Elisabeta Blvd, sector 5, Bucharest

PSD last updated

07 May 2020

Understanding Transition

Further information regarding the EBRD’s approach to measuring transition impact is available here.

Business opportunities

For business opportunities or procurement, contact the client company.

For business opportunities with EBRD (not related to procurement) contact:

Tel: +44 20 7338 7168

For state-sector projects, visit EBRD Procurement:

Tel: +44 20 7338 6794

General enquiries

Specific enquiries can be made using the EBRD Enquiries form.

Environmental and Social Policy (ESP)

The ESP and the associated Performance Requirements (PRs) set out the ways in which the EBRD implements its commitment to promoting “environmentally sound and sustainable development”.  The ESP and the PRs include specific provisions for clients to comply with the applicable requirements of national laws on public information and consultation as well as to establish a grievance mechanism to receive and facilitate resolution of stakeholders’ concerns and grievances, in particular, about environmental and social performance of the client and the project. Proportionate to the nature and scale of a project’s environmental and social risks and impacts, the EBRD additionally requires its clients to disclose information, as appropriate, about the risks and impacts arising from projects or to undertake meaningful consultation with stakeholders and consider and respond to their feedback.

More information on the EBRD’s practices in this regard is set out in the ESP.

Integrity and Compliance

The EBRD's Office of the Chief Compliance Officer (OCCO) promotes good governance and ensures that the highest standards of integrity are applied to all activities of the Bank in accordance with international best practice. Integrity due diligence is conducted on all Bank clients to ensure that projects do not present unacceptable integrity or reputational risks to the Bank. The Bank believes that identifying and resolving issues at the project assessment approval stages is the most effective means of ensuring the integrity of Bank transactions. OCCO plays a key role in these protective efforts, and also helps to monitor integrity risks in projects post-investment.

OCCO is also responsible for investigating allegations of fraud, corruption and misconduct in EBRD-financed projects. Anyone, both within or outside the Bank, who suspects fraud or corruption should submit a written report to the Chief Compliance Officer by email to All matters reported will be handled by OCCO for follow-up. All reports, including anonymous ones, will be reviewed. Reports can be made in any language of the Bank or of the Bank's countries of operation. The information provided must be made in good faith.

Access to Information Policy (AIP)

The AIP 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 following its entry into force on 1 January 2020. Please visit the Access to Information Policy page to find out what information is available from the EBRD website.

Specific requests for information can be made using the EBRD Enquiries form.

Independent Project Accountability Mechanism (IPAM)

If efforts to address environmental, social or public disclosure concerns with the Client or the Bank are unsuccessful (e.g. through the Client’s Project-level grievance mechanism or through direct engagement with Bank management), individuals and organisations may seek to address their concerns through the EBRD’s Independent Project Accountability Mechanism (IPAM).

IPAM independently reviews Project issues that are believed to have caused (or to be likely to cause) harm. The purpose of the Mechanism is: to support dialogue between Project stakeholders to resolve environmental, social and public disclosure issues; to determine whether the Bank has complied with its Environmental and Social Policy or Project-specific provisions of its Access to Information Policy; and where applicable, to address any existing non-compliance with these policies, while preventing future non-compliance by the Bank.

Please visit the Independent Project Accountability Mechanism webpage to find out more about IPAM and its mandate; how to submit a Request for review; or contact IPAM  via email to get guidance and more information on IPAM and how to submit a request.


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