Ukraine Road Corridors

Location:

Ukraine

Project number:

50831

Business sector:

Transport

Notice type:

State

Environmental category:

A

Approval date:

16 Dec 2020

Status:

Concept Reviewed

PSD disclosed:

09 Oct 2020

Project Description

Provision of a sovereign loan of up to EUR 450 million to Ukraine to be on-lent to Ukravtodor, the State Road Agency of Ukraine, consisting of three tranches (the "project"):

  • Tranche 1 of up to EUR 100 million to finance the rehabilitation of the M-05 Kyiv-Odesa road section in Cherkasy region,
  • Tranche 2 of up to EUR 160 million to finance the construction of a northern section of the bypass around the city of Lviv,
  • Tranche 3 of up to EUR 190 million to finance the rehabilitation of the M-05 Kyiv-Odesa road sections in Kirovohrad, Mykolaiv and Odesa regions.

Project Objectives

Tranches 1 and 3 aim to support the rehabilitation of strategically important sections of the M05 Kyiv-Odesa road, which is part of Corridor IX of the Trans-European Transport Network ("TEN-T") and one of the busiest roads in the country connecting the capital to the biggest city in the south and the Black Sea ports, which are a vital logistical hub for freight transport.

Tranche 2 will support the completion of the ring-road around the city of Lviv, which is located at the intersection of TEN-T Corridors III and V, and will enable through traffic to bypass the city more effectively improving travel times and reducing congestion in the city.

The project will also support legal and regulatory reform objectives aimed at developing a competitive and transparent road construction and maintenance sector.

Transition Impact

ETI score: 63

Primary Quality - Well-Governed. The Project will support the following objectives:

  • In accordance with the Memorandum of Understanding between the Government of Ukraine and the Bank on Prevention of Corruption and Fostering Transparent and Efficient Management in the Public Sector dated 7th October 2020: (i) development and implementation of a comprehensive anti-corruption programme for Ukravtodor involving the strengthening of procurement, anti-bribery and anti-corruption internal controls, policies and procedures; and (ii) review of procurement procedures at Ukravtodor and introduction of procurement certification by Chartered Institute of Procurement and Supply ("CIPS");
  • Adoption of new standardised tender documents, qualification and evaluation criteria and internationally recognised forms of contract for road maintenance / construction contracts procured by Ukravtodor in accordance with the national legislation;
  • Development of legal and regulatory reforms to support road safety objectives.

Secondary Quality - Integrated. The project will support the completion of the rehabilitation of the M-05 Kyiv-Odesa road and construction of the Lviv Northern Bypass, which are strategic road sections making part of the TEN-T corridor network. In addition, the Project will also support the introduction of weigh-in-motion systems to manage the impact of overweight vehicles and implementation of a strategic road safety risk assessment across the national road network to identify and prioritise high risk segments.

Client Information

UKRAINE SOVEREIGN

The borrower is Ukraine. The loan proceeds will be on-lent to Ukravtodor, the State Road Agency of Ukraine.

EBRD Finance Summary

EUR 450,000,000.00

A sovereign loan of up to EUR 450 million.

Total Project Cost

EUR 1,147,000,064.00

EBRD Loan:    EUR 450 million

  Tranche 1    EUR 100 million

  Tranche 2    EUR 160 million

  Tranche 3    EUR 190 million

EIB Loan:     EUR 450 million

Client's contribution: EUR 247 million

Additionality

The Bank provides support to strengthen the Ukravtodor's capacity with respect to procurement, project implementation, environmental and social issues, and anti-corruption reforms.

Environmental and Social Summary

Tranches 1 and 3 of the Project are categorised B, Tranche 2 is categorised A under the 2019 EBRD Environmental and Social ("E&S") Policy. This PSD covers only the Tranche 1 component on which the Bank's environmental and social due diligence ("ESDD") is currently in progress conducted by an independent EHSS consultant. The consultant will complete an E&S analysis of the Tranche 1 components with a specific focus on Ukravtodor's overall ability, related management systems and capacity to manage key risks during the construction and operation of the Project. Additional ESDD for Tranche 3 and an Environmental and Social Impact Assessment ("ESIA") for Tranche 2 will be carried out once the Project is developed further and will be disclosed in due course. Road Safety Audit is ongoing for Tranche 1 and will also be done for all other components of the proposed Project.

This PSD will be updated when the ESDD is completed and results of due diligence are known.

Technical Cooperation and Grant Financing

TC1: Environmental and social due diligence

TC2: Economic and technical due diligence

TC3: Road safety audits of the road infrastructure to be rehabilitated under the Project

TC4: Assessment of the climate vulnerability context and potential structural and non-structural measures to improve climate resilience

TC5: Reform implementation support including strategic risk assessment, road safety inspections for high risk sections, road safety management capacity review and training

TC6: Procurement Practices Reform including the review and preparation of new standard procurement documents, qualification and evaluation criteria and forms of contract for the road construction sector

TC7: Procurement benchmarking and corporate certification by CIPS

TC8: Development of a targeted anti-corruption action plan for Ukravtodor and support in its implementation

Company Contact Information

Oleksandr Kubrakov
loans@ukravtodor.gov.ua
+38 (044) 287 74 08
+38 (044) 287 41 18
https://ukravtodor.gov.ua/
9 Fizkultury Str. Kyiv, 03150

PSD last updated

09 Oct 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
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 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 compliance@ebrd.com. 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 how to submit a Request for review through our confidential online form, by emailmail or telephone. IPAM is available to discuss your concerns and answer any questions you may have about the submission or handling of Requests, which follow the Project Accountability Policy and Guidance. Requesters’ identities may be kept confidential, upon request.

 

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