KTJ climate resilient rail infra

Overview
Project Summary Document
Environmental and Social Documentation
Procurement
Complaints

Overview

The provision of a sovereign loan of up to €8 million to the Kyrgyz Republic to be on-lent to the State Enterprise National Rail Company Kyrgyz Temir Jolu under the Ministry of transport and communications of the Kyrgyz Republic ("KTJ" or the "Company"). The Project will increase the sustainability of the rail infrastructure by enhancing rail network climate resilience in the Boom Gorge area and upgrading KTJ's rolling stock to enhance the operational efficiency.

Project ID 50170

Status Signed

Location

Kyrgyz Republic

Business Sector

Transport

Notice Type

State

Project timeline

Exploratory
Passed Concept Review
Passed Structure Review
Passed Final Review
Board Approved
Signed
Implementing
Completed

Company Contact Information

Azamat Sakiev, General Director
info@railway.aknet.kg
+996 312 92 74 71
+996 312 92 69 32
www.kjd.kg
83 Lva Tolstogo street, Bishkek 720009, Kyrgyz Republic

Project ID 50170

Status Signed

Location

Kyrgyz Republic

Business Sector

Transport

Notice Type

State

Environmental Category

Approval Date

30 Nov 2022

Disclosure date

22 Jun 2021

Project description

Project objectives

The Project contributes to strengthening countrywide and regional cross-border connectivity by increasing resilience of the Kyrgyz Republic's rail infrastructure. The Project will also promote the commercialisation and corporatisation of KTJ and facilitate integration of climate risks management approaches into their operations in line with international best practice.

The proposed strategic engagement is in line with the Bank's Strategy for the Kyrgyz Republic (BDS/KY/19-01(Final)), the Transport Sector Strategy (BDS19-172(Final)), the Green Economy Transition Approach 2021-2025 (BDS20-082(Final)) and the Promotion of Gender Equality (BDS21-133 (F)).

Transition impact

ETI Score:76

Well-governed (primary): The Project will support improvement of corporate governance via adoption of corporate governance action plan, supporting Company's corporatisation through changing its organisational structure to JSC, institutional separation of powers of the state bodies fulfilling the shareholders' functions, increasing the efficiency of the decision-making and internal control processes under the Company's holding structure. Additionally, the Project will support the introduction of specific climate change governance measures aiming to improve the Company's strategic planning, risk assessment and reporting on climate-related risks and opportunities.
Green (secondary): The Project will facilitate enhanced climate resilience of the rail infrastructure and introducing climate adaptation solutions and reporting.

Client information

KYRGYZ REPUBLIC SOVEREIGN

The EBRD will provide a sovereign loan to the Kyrgyz Republic to be on-lent to KTJ. The Project entity is an independent legal entity in the form of a state unitary enterprise, which is fully owned by the Kyrgyz Government via the State Property Fund. The Ministry of Transport of the Kyrgyz Republic supervises KTJ operations.

The Company manages railway infrastructure and provides freight and passenger transport services. In 2021 KTJ transported over 7.5 million tonnes of cargo (of which 70 per cent was import). KTJ operates based on self-financing and self-sufficiency principles, with no state subsidies as of year end 2021, the Company had € 80 million in assets, € 64 million in revenues and € 17.5 million of EBITDA (management accounts). It employs over 4,800 people, of which 30 per cent are females.

EBRD Finance Summary

EUR 8,000,000.00

A sovereign loan of up to € 8 million.

An investment grant of € 3 million is envisaged from the EBRD's Stakeholder Special Fund ("SSF").

Total project cost

EUR 12,000,000.00

Total Project Cost consists of: (1) up to € 4 million of rolling stock renewal, and (2) up to € 8 million of critical railway infrastructure rehabilitation. The Project is envisaged to be financed through a combination of loan, grant and Company's contribution.

Additionality

The Bank will support achieving higher standards through loan conditionalities (e.g. Corporate Governance Action Plan ("CGAP"), Corporate Climate Governance ("CCG") implementation support and the EBRD Procurement Policies and Rules ("PPRs") application). Gender additionality arises from introducing a training programme on climate risks assessment and mitigation measures for the railway sector, ensuring a high share of female participation.

Environmental & Social Summary

Categorised B (ESP 2019). Environmental and social issues associated with renewal of the rolling stock and rehabilitation of railway infrastructure were assessed through an independent Environmental and Social Due Diligence ("ESDD") and are expected to be site-specific and mitigated via the implementation of control measures formulated in the Environmental and Social Action Plan ("ESAP") agreed with the Company. The Project will have beneficial effects resulting from the improved reliability and safety of the rail infrastructure and improved climate resilience.

The ESDD was undertaken in 2019 by an independent consultant and included an analysis of the proposed Project, review of the Company's current operational activities, regulatory compliance status and Environmental and Social ("E&S") management systems, social, labour and safety risks associated with rehabilitation works, contractor management, infrastructure and public safety.

It has been established that the Company is compliant with national E&S regulations and has the institutional capacity to implement the Bank's Performance Requirements ("PRs"). Environmental and Social management systems are in place, with roles and responsibilities assigned, documentation and procedures in place and training & internal audits conducted. Some improvements will be required to bring the E&S management system into full conformance with Bank's PRs. The major risks will be associated with construction labour and Health and Safety management. This will require contractor management that ensures Environmental, Health and Safety, and Social ("EHSS") requirements in line with the Banks PRs are addressed for the construction and operation phases of the Project. A Stakeholder Engagement Plan ("SEP") inclusive of a Grievance Redress Mechanism has been developed as well.

Due diligence also included a Climate resilience assessment to evaluate infrastructure vulnerability to climate change. The Bank will assist KTJ though a TC on Corporate Climate Governance Implementation ("CCGI") to support development and adoption of climate change adaptation management practices across the railway network.

ESAP has been developed for the Project and agreed with the Company. It includes further improvement of the E&S management system, supply chain management, management and monitoring of the contractors, strengthen health and safety requirements, implementation of the Stakeholder Engagement Plan ("SEP") and other corrective measures. Project Implementation Support will also be provided by the Bank to assist the Company, with, inter alia, implementation of the ESAP.

Technical Cooperation and Grant Financing

Pre-signing:

TC1: Due Diligence, € 74,500 funded by the EBRD Shareholder Special Fund (SSF);

TC2: Financial Due Diligence, € 74,500 funded by the SSF;

TC3: Climate Resilience Assessment, € 75,000 funded by the Czech Republic through the GET Policy Dialogue window;

TC4: Pre-corporatisation Economic Assessment, € 74,000 funded by the SSF.

Post-signing:

TC5: Project Implementation Support, € 255,000, expected to be funded by the SSF;

TC6: Corporate Climate Governance Implementation, € 200,000, expected to be funded by the SSF;

TC7: Corporate Governance Action Plan Support, € 74,500, expected to be funded by the SSF.

Company Contact Information

Azamat Sakiev, General Director
info@railway.aknet.kg
+996 312 92 74 71
+996 312 92 69 32
www.kjd.kg
83 Lva Tolstogo street, Bishkek 720009, Kyrgyz Republic

Implementation summary

PSD last updated

23 Nov 2022

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 the EBRD (not related to procurement) contact:

Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

For state-sector projects, visit EBRD Procurement:

Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

Specific enquiries can be made using the EBRD Enquiries form.

Environmental and Social Policy (ESP)

The ESP and its associated Environmental and Social Requirements (ESRs) set out the ways in which the EBRD implements its commitment to promoting “environmentally sound and sustainable development”. The ESP and the ESRs include specific provisions for clients to comply with the applicable requirements of national laws on public information and consultation, and to establish a grievance mechanism to receive and facilitate resolution of stakeholders’ concerns and grievances, in particular, about the environmental and social (E&S) 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 also requires its clients to disclose information, as appropriate, about the risks and impacts of 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 of the Bank's activities 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 EBRD believes that identifying and resolving issues in the project assessment and approval stages is the most effective means of ensuring the integrity of Bank transactions. OCCO plays a key role in these protective efforts andhelps to monitor integrity risks in projects post-investment.

OCCO is further responsible for investigating allegations of fraud, corruption and misconduct in EBRD-financed projects. Anyone, either within or outside the Bank, who suspects fraud or corruption should submit a written report to the Chief Compliance Officer by email to compliance@ebrd.com. OCCO will follow-up all matters reported. It will review all matters reported. 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, which entered into force on 1 January 2025, sets out how the EBRD discloses information and consults with its stakeholders to promote better awareness and understanding of its strategies, policies and operations. 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 (for example, 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 the 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 and how to submit a Request for review. Alternatively, contact IPAM by email at ipam@ebrd.com for guidance and more information on IPAM and how to submit a request.

Environmental and Social Documentation is not available for this project.

Selected procurement notices related to this project may be shown below. Further procurement opportunities related to this and other projects, if available, maybe be viewed in the EBRD Procurement Portal.

The EBRD's Environmental and Social Policy (ESP), Access to Information policy (AIP) and Project Accountability Policy (PAP) enable sound and sustainable development in its projects. The Independent Project Accountability Mechanism (IPAM) deals with complaints about environmental, social and disclosure matters related to the Bank’s investments.

No complaints about this project have been made so far.

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KTJ climate resilient rail infra

Overview

Project timeline

Company Contact Information

Project description

Project objectives

Transition impact

Client information

EBRD Finance Summary

Total project cost

Additionality

Environmental & Social Summary

Technical Cooperation and Grant Financing

Company Contact Information

Implementation summary

PSD last updated

Understanding transition

Business opportunities

General enquiries

Environmental and Social Policy (ESP)

Integrity and compliance

Access to Information Policy (AIP)

Independent Project Accountability Mechanism (IPAM)