Provision of a sovereign loan of up to EUR 75 million to Georgia (in two tranches), expected to be co-financed by the EBRD and the Green Climate Fund (the "GCF"). The loan will be on-lent 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 investment will improve the reliability, safety and efficiency of public transport through the acquisition of approximately 40 modern metro cars (10 train sets) for the company to replace existing, outdated rolling stock, as well as rehabilitation of metro depot and a tunnel.
The project is part of a broader programme aiming to assist the city in reforming its management of public transport by financing the renewal of bus and metro systems and network restructuring.
ETI Score = 70
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 project will help to promote the Green transition quality by reducing the impacts of the city's transport sector by encouraging a shift to public transport systems.
Georgia represented by the Ministry of Finance. The project will be implemented by the city and the company.
EBRD Finance Summary
€65 million sovereign loan to Georgia (in two tranches).
Total Project Cost
The total project cost is €75 million.
The project will also benefit from the technical cooperation assignments to support project preparation and implementation.
The project will be another step for the city to implement the GCAP and to meet commitments made to other sustainability initiatives and programmes.
EBRD offers financing that is not available in the market from commercial sources on reasonable terms and conditions. Moreover, EBRD expertise in the sector will support application of enhanced standards.
Environmental and Social Summary
The Project is categorised B under the 2014 Environmental and Social Policy. An independent Environmental and Social Due Diligence ("ESDD") included an Environmental and Social analysis of the proposed investment under Tranche 1 as well as a review of the existing corporate environmental, social, health and safety management systems and the capacity of the Company to manage risks associated with the proposed Project in line with the EBRD Performance Requirements ("PRs"). Tranche 2 of the Project, which covers the construction of the new metro depot and rehabilitation of the metro tunnel will be subject of a separate ESDD and Management Approval.
The Company is well-known to the Bank through a number of other projects and the EBRD is supporting several environmental and social ("E&S") related TCs for the Company. Regular progress and monitoring reports confirm that the Company has achieved substantial progress in implementing previously agreed Environmental and Social Action Plan ("ESAP") and general E&S Management Systems and has capacity to deliver the Project in line with EBRD PRs.
The Project will bring substantial environmental and public health benefits through modernisation of the metro car fleet. It will increase accessibility and mobility for all user groups and improve overall quality, safety and efficiency of urban transportation.
The Project will not have significant adverse social impacts to local communities or other project affected parties, nor will the Project require the acquisition of any land or result in involuntary resettlement or economic displacement.
Any adverse impacts will be site specific and addressed by the ESAP that has been developed for the Project, which includes, inter alia, further improvement of Environmental & Safety Management Systems, including improvement of sanitary and hygienic conditions for the Company employees, effective waste management and waste water treatment facilities. The Company will be required to include requirements to energy efficient equipment (e.g., regenerative braking system for the rolling stock and others) into the tender documentation. The ESAP was presented to the Company and will be agreed prior to the Board meeting.
The environmental and social performance of the Project and implementation of the ESAP will be monitored through annual E&S reports and site visits when deemed necessary.
Technical Cooperation and Grant Financing
The following technical co-operation ("TC") assignments are included as part of this project:
- Due Diligence. The estimated cost of the assignment is up to EUR 70,000 proposed to be financed by an international donor, the GCF or the ERBD Shareholder Special Fund ("SSF").
- Project Implementation Support. The estimated cost of this assignment is up to EUR 275,000, proposed to be funded by an international donor, the GCF or the SSF.
Company Contact Information
Tbilisi Transport Company 2, Station Square, Tbilisi 0112, Georgia
PSD last updated
15 Jul 2020
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.
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 email@example.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 more about IPAM and its mandate; how to submit a Request for review; or contact IPAM via email firstname.lastname@example.org to get guidance and more information on IPAM and how to submit a request.