The provision of a sovereign loan of up to €62.9 million to the Republic of Albania for the benefit of Hekurudha Shqiptare (Albanian Railways or HSH or the Company), the railway operator of the Albanian railway system, which is fully owned by the state.
The financing will be used for the rehabilitation of the railway line between Vore and Hani i Hotit on the border with Montenegro, approximately 120 km in length (the project). The project is envisaged to be co-financed by the European Investment Bank (EIB) and the European Union (EU) through the Western Balkans Investment Framework (WBIF).
1. Promote Albania's connectivity and its economic development and regional integration as the line is part of the Western Balkans Core Network and an indicative extension of Trans European Transport Networks ("TEN-T") in the region.
2. Support development of a greener and more sustainable transport by promoting modal shift from road to rail in Albania.
ETI score: 64
The transition impact of the Project will be derived from:
Promote the modal shift in transport mostly from road to rail and reduce the dependence on higher emitting modes of transportation. The resulting CO2 savings will reduce the overall greenhouse gas ("GHG") emissions and provide a cleaner alternative to the Albanian community and businesses.
Supporting the reform agenda through the operationalisation of the newly established bodies following the adoption of the New Rail Code (i.e. regulatory, safety and investigation units) bringing it in line with the EU standards. Furthermore, establishment of a clear contractual relationship between various parties operating in the industry in the form of public service contracts will be explored aiming to make the sector competitive.
The Borrower is the Republic of Albania represented by the Ministry of Finance and Economy. The Client and beneficiary of the Project is Albanian Railways, the railway operator of the Albanian railway system.
EBRD Finance Summary
A sovereign loan of up to €62.9 million.
Total Project Cost
The total project cost is estimated at approximately €267 million.
The Bank's additionality is derived from i) provision of missing long-term financing in the country to match the life of infrastructure investments; ii) the Bank's further support of the commercialisation of the rail sector in Albania; iii) promotion of best procurement standards; iv) support in development of institutional capacities.
Environmental and Social Summary
Categorised A (Environmental and Social Policy 2019). The rehabilitation and upgrade of the existing railway line (c. 120 km in length between Vore and Hani i Hotit) may potentially have significant environmental and social impacts that require the preparation and disclosure of an Environmental and Social Impact Assessment ("ESIA").
The potential environmental, health and social risks linked to the planned works for the Vore i Hani i Hotit railway section and current operational and managerial practices of the Company (depots, maintenance facilities, track and road safety, level-crossings etc.) were assessed as part of the environmental and social due diligence ("ESDD") by an independent environmental and social consultant. The ESDD included a review of the ESIA package previously prepared for the project as part of a WBIF project preparation assignment, including the Environmental and Social Management Plan ("ESMP"), Land Acquisition and Resettlement Framework ("LARF"), Stakeholder Engagement Plan ("SEP") ,Non-Technical Summary ("NTS") against the EBRD Environmental and Social Policy Performance Requirements (PRs) 2019 requirements. A gap analysis report and a draft Environmental and Social Action Plan ("ESAP") was developed and the ESIA disclosure package was updated accordingly and is disclosed in Albanian and English for a period of at least 120 days prior to EBRD Board consideration of the Project. In parallel, the national Environmental Impact Assessment ("EIA") process is ongoing and will address a potential involvement of a transboundary consultation. The SEP prepared for the Project will address the steps required to comply with ESPOO requirements as necessary.
The planned railway track generally follows the existing line and hence no significant land expropriation would be required. However, two options for the project design were considered as part of the ESIA scoping. The changes to improve the alignment affects only some short sections, which are located almost next to the existing track and therefore they do not affect the extent of the geographical location of the Project area. The design takes into consideration seismic and flood risks, closure of illegal railway crossings, plus the future electrification of the railway line.
PSD will be updated following the completion of the public consultation period.
Technical Cooperation and Grant Financing
The following Technical Cooperation assignments are envisaged as part of this project (to be finalized during approval process):
- Preparation of the Feasibility Study, Preliminary Design, Cost Benefit Analysis; (Completed);
- Preparation of the Detailed Design, Tender Documents, and ESIA; (Completed);
- Project Implementation Support and Works Supervision;
- Capacity strengthening for the management of railway infrastructure projects.
Company Contact Information
Lagjia nr. 3, Rruga Egnatia, Durres, Albania
PSD last updated
15 Aug 2022
Further information regarding the EBRD’s approach to measuring transition impact is available here.
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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.
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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.
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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 email@example.com to get guidance and more information on IPAM and how to submit a request.