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GrCF2 W2 - Tbilisi Bus extension



Project number:


Business sector:

Municipal and environmental infrastructure

Notice type:


Environmental category:


Approval date:

27 Nov 2019



PSD disclosed:

19 Sep 2019

Translated version of this PSD: Georgian

Project Description

Provision of a sovereign loan of up to EUR 80 million to Georgia for on-lending to the city of Tbilisi (the "city") for the benefit of the Tbilisi Transport Company Ltd (the "company"), a municipal company, which operates buses, the metro system and cable cars in Tbilisi. The loan is divided in 2 tranches: EUR 65 million and EUR 15 million, respectively.

The project will finance a new bus fleet of modern 12-meter low- floor compressed natural gas ("CNG") buses, and rehabilitation/modernisation of bus depots for the city. 

Project Objectives

The investment will improve the reliability, safety and efficiency of public transport, while the CNG technology will reduce greenhouse gas emissions. The project will introduce low-floor buses, bringing significant social benefits by facilitating easy access for passengers with prams and shopping bags, especially women, and those with limited movement, including the elderly and the disabled. Moreover, the new buses will improve the safety of bus operations.

Transition Impact

The project is part of Green Cities 2 ("GrCF2") and a follow-on investment to the Tbilisi Green City Action Plan ("GCAP").

GrCF2's primary goal is to achieve significant environmental improvements and promote the Green transition quality within the relevant cities. GrCF2 also aims to build necessary capacity and facilitate better coordination and buy-in among various stakeholders in order to improve the governance, operational efficiency and financial sustainability of the targeted investments and initiatives. Under GrCF2, the EBRD will put further emphasis on implementation of GCAPs, with at least half of all sub-investments expected to be follow-on transactions addressing critical environmental challenges identified by the GCAPs. The Bank will also seek to introduce more robust policy advice on the back of lessons learned, targeted studies and technical assistance. The overall transition impact will stem from the Green and the Well-Governed qualities.

The proposed project is expected to address the Green transition objectives on the back of significant environmental benefits through the provision of clean vehicles and the continued improvement of public transport services as a viable alternative to car based transportation in Tbilisi.  The project will further support the Well-Governed objective through continued support of sector reforms and re-routing of bus services in Tbilisi. 

Client Information

Georgia represented by the Ministry of Finance, the City and the Company

EBRD Finance Summary

EUR 80,000,000.00

€80 million sovereign loan to Georgia.

Total Project Cost

EUR 80,000,000.00

The total project cost is €80 million.

The project will also benefit from the technical cooperation assignments to support project preparation and implementation.

Environmental and Social Summary

Categorised B (ESP 2014). The environmental and social impacts associated with the purchase and operation of the new low-emission CNG buses will be mainly beneficial. Any potential adverse environmental and social impacts will be site-specific and readily mitigated through application of good management practices. The Project will contribute to improved accessibility and mobility for all user groups, air quality in the City, safety and efficiency of urban transportation.  The Project is associated with GET and makes up a 100 per cent share. 

The Environmental and Social Due Diligence ("ESDD") has been undertaken in-house and included a review of the Company's existing management systems, Environmental and Social ("E&S") monitoring and audit reports, ESAP implementation status and overall E&S regulatory compliance. As a condition to the commitment of Tranche 2, additional ESDD will need to be undertaken and the ESAP will be updated for the bus depot rehabilitation component, once technical information is available.

Assessment also included an analysis of environmental and social impacts and benefits associated with the Project, including compliance of the proposed bus specifications with the EU requirements. The Company is an existing client of the Bank and the ESDD confirmed that the Company has in recent years made substantial progress in improving E&S policies and has the institutional and technical capacity required to deliver the Project in compliance with the Bank's requirements. The Bank has also been supporting the Company through a number of TCs, specifically, Safety Management System Implementation, Traffic and Driving Safety Management, PIU support.

The due diligence has indicated that current environmental, occupational health and safety, and stakeholder engagement practices are generally in line with national legislation. The Company has also recently implemented robust Safety and Environmental Management systems and has been developing and applying a Driving Safety Programme, and adopted a comprehensive ESAP under the Original Project. Gender and diversity aspects have been also incorporated into the Company's management system. The ESAP has been updated to include continuous improvements and enforcement of safe labour practices, traffic and fire safety, wastewater and waste management. Company-level  Environmental, Social and Safety Management systems also require further improvement, including additional environmental and safety training, risk assessment, inspection, incident investigation and reporting practices, and proper grievance management. 

The Bank will monitor the Company's activities through annual E&S monitoring reports and site visits if necessary. 

Technical Cooperation

The following technical co-operation ("TC") assignments are included as part of this project:

  • Technical Due Diligence (Bus Depot Component). The cost of the assignment is EUR 50,000, funded by the EBRD Shareholder Special Fund ("SSF").

  • Bus Service Reform Support. The estimated cost of this assignment is up to EUR 500,000, proposed to be funded by an international donor or the SSF. 

  • Project Implementation Support. The estimated cost of this assignment is up to EUR 300,000, proposed to be funded by an international donor or the SSF.

  • Support for Gender Equality and Inclusion Urban Transport Policies. The estimated cost of the assignment is up to EUR 125,000, proposed to be financed from the EBRD's Gender Advisory Services Framework, funded by the SSF.

Company Contact Information

Mr. Giorgi Dolidze
+995 577 228278
Tbilisi Transport Company 2, Station Square, Tbilisi 0112, Georgia

Business opportunities

For business opportunities or procurement, contact the client company.

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