Provision of up to JOD 10.3 million (~EUR 12.0 million) unsecured sub-sovereign loan to GAM to finance the acquisition of 136 diesel Euro V buses (including ancillary systems) as part of larger bus fleet expansion involving 151 buses which include 15 electric buses as a pilot rollout of zero-emission public transport vehicles in the city of Amman. The loan will be co-financed by a capex grant of up to EUR 8.0 million from the Community Resilience ("CR") Sub Account of the EBRD's SSF.
The city of Amman with a population of approx. 4.5 million, would like to improve standards of the urban transport system, namely by expanding its bus fleet through the purchase of up to 151 new buses with related bus depot facilities. The proposed new bus fleet will involve 136 diesel Euro V buses (to be financed under the Municipal Refugee Reslience Response ("MR3") framework) and 15 electric buses (to be financed under the Green Cities Framework ("GrCF")). The Project will serve new routes under the bus network plan developed by GAM and will include a ticketing system and real-time information systems compatible with their existing systems. The tender for the Project will be launched in December 2020.
It is intended that the bus fleet will be purchased by GAM and leased to a private sector operator which will be responsible for the depot facilities and warranty and maintenance obligations for the fleet and be paid through a public service contract ("PSC") with Amman Vision for Transport (the municipal company responsible for transport operations) under a gross-cost arrangement.
This transaction marks the first intervention with GAM on urban transport infrastructure, which is expected to significantly improve the quality of transport services in the city, while advancing the Bank's transition mandate. The Project will i) adopt a well-governed PSC between GAM and the operator responsible for bus operations, and ii) enhance the City's resilience in the face of the Syrian refugee crisis, which increased pressure on municipal infrastructure and services.
ETI score: 60
Under the MR3 Framework, transition impact is primarily based on enhanced Resilience through asset expansion or rehabilitation and specific cost reduction to contribute to the financial sustainability of operations. Additionally, the framework supports the Well-Governed quality through the introduction of higher standards of service quality monitoring. The Project will contribute to the Reslient quality through the expansion of urban transport infrastructure that was impacted by the Syrian refugee crisis, which will improve access to public transport for host communities. Additionally, the Project will also enhance access to the workforce for refugees, especially females, due to the lack of alternative safe mode of transport. In addition, the Project supports the Well-Governed quality by introducing a performance indicator and regular performance disclosure. This will improve municipal services in the area by ensuring that urban transport system run in accordance with best practices, under a well-structured PSC.
The proposed investment will also address Amman's priority needs as identified by its GCAP. The Project's objective is to serve as a successful bus fleet expansion, which will lead to improvements in the reliability, safety and efficiency of public transport, with the ultimate goal to encourage a modal shift from private to public transport. In addition, the Project will address GCAP priorities through the improvement of the environmental standards of the new bus fleet under this investment.
MUNICIPALITY OF GREATER AMMAN
GAM is an autonomous institution responsible for most municipal services within the city of Amman, which includes inter alia solid waste management, transportation, street lighting, intra-city roads, stormwater drainage, and municipal parks and recreation centres. Given the autonomous nature of GAM, it remains independent from budget transfers from the GoJ and has its own budget that is mainly funded by municipal taxes and service fees, including significant proportion from direct taxation of businesses and households, building permits, property development, and traffic fines.
GAM is headed by the Mayor who serves as the supreme executive and chairman of the city council. The Mayor is appointed by the Council of Ministers and by recommendation from the Prime Minister.
EBRD Finance Summary
Up to JOD 10.3 million (~EUR 12.0 million) unsecured sub-sovereign loan to GAM to finance the acquisition of 136 diesel Euro V buses (including ancillary systems). The loan will be co-financed by a capex grant of up to EUR 8.0 million from the Community Resilience Sub Account of the EBRD's SSF.
Total Project Cost
Financing Structure -
- EBRD offers financing that is not available in the market from commercial sources on reasonable terms and conditions, e.g. a longer grace period that is rarely available in the market, restricted foreign currency financing etc. Such financing is necessary to structure the project.
-EBRD helps the client to mitigate environmental, social and governance (ESG) risks through identification of risks related to the depletion of natural capital assets, raw materials and water availability, etc., and to manage these risks.
Standard-setting: helping projects and clients achieve higher standards
-Client seeks/makes use of EBRD expertise on best international procurement standards.
-Client seeks/makes use of EBRD expertise on higher financial standards, including through financial covenants.
Knowledge, innovation, and capacity building
-EBRD provides expertise, innovation, knowledge and/or capabilities that are material to the timely realisation of the project's objectives, including support to strengthen the capacity of the client
Environmental and Social Summary
Categorised B (ESP 2019). The Environmental and Social Due Diligence ("ESDD") for the project has been undertaken by an independent consultant and included an environmental and social ("E&S") assessment of the project, a review of the current Amman Bus I operations (including a user survey) as well as the E&S management systems and the capacity of GAM as it relates to bus operations.
The ESDD confirmed that benefits associated with the purchase of the new diesel buses reaching EURO V emission standards include contribution to improving accessibility and mobility for all user groups and the safety and efficiency of urban transportation, as well as a reduction in CO2 emissions of 6,200 tonnes per year compared with the use of existing cars, buses and taxis in the absence of the project.
The specifications of the new buses have incorporated E&S requirements such as accessibility including for persons with disabilities, provision of CCTV monitoring, safety and emergency response and audio and visual passenger communication systems. In support of the Project a new depot to store and maintain the buses will be developed. A review of the proposed depot location was conducted (assuming the Phase I operator is selected for Phase II) and identified site-specific E&S impacts and mitigations. No involuntary resettlement or economic displacement is associated with this option. Based on the final location of the depot, an environmental and social assessment which meets the objectives of the PRs and a national EIA (if applicable) are required to be put in place by the depot developer prior to construction. In addition, E&S specifications for the depot design will be included in the operating contract and an Environmental and Social Management Plan ("ESMP") and Traffic Management Plan implemented for both the depot construction, and operational phases.
The bus operator will be required to implement an HR policy and procedures in accordance with PR2 and develop a workforce grievance procedure. A driver training programme including safety and behavioural aspects and Code of Conduct, with specific provisions on Gender Based Violence and Harassment, for the service will be implemented. A health and safety plan incorporating a COVID-19 risk assessment and emergency response plan will be put in place and quarterly reviews of H&S performance and customer feedback will be conducted between GAM and the bus operator, supported by a formal annual audit of bus and user safety. Fares will be the same as that for the Phase 1 buses which are aligned with bus fares in the City, hence no affordability issues are anticipated.
GAM does not yet operate an Environmental and Social Management System ("ESMS") at a corporate level, and in the context of this Project will be required to develop a EHSS policy for transport operations and an E&S monitoring plan to monitor the performance of the bus operator and the implementation of their ESMP.
A SEP has been developed which will be implemented by GAM, and the existing grievance system for transport operations needs to be enhanced to meet PR10 requirements and include gender considerations. Although the new buses will operate on new lines, the client is also required to raise awareness within existing small bus operators of changes to the legislation which by 2022 require existing individual bus licence holders to either sell the rights of their lines to GAM or consolidate with others to form service providers that meet the standards stipulated by GAM.
The above requirements have been included in the ESAP which has been developed and will be agreed with GAM prior to the signing of the loan agreement. Additional support for ESAP implementation will be provided through a TC assignment. The Bank will monitor the Company's activities through annual E&S monitoring reports and site visits if necessary.
Technical Cooperation and Grant Financing
- An investment grant of up to EUR 8.0 million from the Community Resilience Sub Account of the SSF.
- TCRS 85387 - Detailed due diligence and preparation of technical specifications (completed): Cost of the assignment: €74,600, financed by Infrastructure's pre-approved allocation under the Community Resilience Sub Account of the EBRD SSF or another donor.
- TCRS 85391 - Procurement support and tender preparation (on-going): Procurement support, preparation of tender documents, and technical support during tender evaluation. Cost of the assignment: €72,000, financed by Infrastructure's pre-approved allocation under the Community Resilience Sub Account of the EBRD SSF or another donor.
- TCRS 85389 - Environmental and social due diligence (on-going), cost of the assignment: €36,000, financed by Infrastructure's pre-approved allocation under the Community Resilience Sub Account of the EBRD SSF or another donor.
- TCRS 98502 - ESAP Implementation Support: cost of the assignment: €45,000, financed by Infrastructure's pre-approved allocation under the Community Resilience Sub Account of the EBRD SSF or another donor.
Company Contact Information
PSD last updated
15 Dec 2020
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