Novi Sad - Bus Fleet Renewal

Location:

Serbia

Project number:

51441

Business sector:

Municipal and environmental infrastructure

Notice type:

State

Environmental category:

B

Approval date:

20 Apr 2021

Status:

Approved

PSD disclosed:

07 Oct 2019

As per section 1.4.2 (iii) of the Directive on Access to Information: "For Projects approved by Bank management where the Board of Directors has delegated the approval authority, the PSD shall be disclosed at the start of the relevant no-objection notification period to a member country of the Bank in accordance with Article 13 (iii) of the Agreement Establishing the EBRD."

Project Description

Project Description:

Provision of debt financing to Javno gradsko saobracajno preduzece Novi Sad (the "Company", or the "Client"), a public transport company fully owned by the city of Novi Sad (the "City") to help renew its bus fleet. In addition to the acquisition of 29 Compressed Natural Gas ("CNG") buses under the original project, the proposed loan extension entails the financing of up to 10 electric buses with related charging infrastructure to help diversify the Company's bus fleet.

The project and its extension fall under the Green Cities Framework 2 ("GrCF2") which is established to provide loans to governments, municipalities, municipal owned and private companies providing municipal services. The over-arching aim of the GrCF2 is to serve as a sector-wide catalyst for addressing environmental challenges at the municipal/city level. This is underpinned through the implementation of a Green Cities Action Plan ("GCAP"), which is a strategic document whereby environmental challenges are benchmarked, priority areas for environmental improvements identified, environmental objectives defined and indicative investments determined. The preparation of GCAP is ongoing and it is financed from the donor funds granted by Green Climate Fund ("GCF"). 

Project Objectives

Project Objectives:

Contributing to the improved quality of bus transport service in the city and enhancement of sustainable mobility solutions.

Transition Impact

ETI score: null

The project contributes to the "green" transition impact quality (primary quality) through environmental benefits arising from improved local air quality by reducing air pollution emissions. Also, the project contributes to the "well governed" transition impact quality (secondary quality) by supporting the city to develop its GCAP. The GCAP will introduce improvements in local planning and coordination of infrastructure development in medium and long term, as well as strengthen institutional capacity of the city.

Client Information

PUBLIC TRANSPORT COMPANY OF THE CITY OF NOVI SAD

The client under the original project is "Javno gradsko saobracajno preduzece Novi Sad", a public transport company fully owned by the city of Novi Sad. 

The client under the loan extension is the City of Novi Sad.

 

EBRD Finance Summary

EUR 15,000,000.00

The Bank is considering a loan extension of EUR 8 million to the City to finance electric buses, in additon to its EUR 7 million loan to the Company for 29 CNG buses.

Total Project Cost

EUR 15,000,000.00

The total project cost for the extended project is up to EUR 15 million. 

Additionality

Financing Structure: EBRD offers financing that is not available in the market from commercial sources on reasonable terms and conditions. Additionally, EBRD is able to mobilise concessional financing from GCF.

Standard-setting: Client seeks/makes use of EBRD expertise on best international procurement standards and higher environmental standards, above 'business as usual'.

Knowledge, innovation, and capacity building: EBRD provides expertise, innovation, knowledge and/or capabilities that are material to the timely realisation of the project's objectives, including support to strengthen the capacity of the client.

Environmental and Social Summary

Categorised B (2014 ESP). Any environmental and social impacts potentially associated with the project will be site-specific and addressed through appropriate mitigation measures. An environmental and social due diligence ("ESDD") of the proposed investment as well as a review of environmental, social, health and safety policies and procedures and the capacity of the company to manage risks associated with the proposed project was completed by independent consultants and confirmed that the project is structured to be in line with the EBRD's Performance Requirements ("PRs").

The project component consisting of purchasing of 29 buses, as part of an ongoing fleet renewal programme, has the total expected annual emissions savings (tonnes/year) of 2,595 t CO2 (71% savings on current emissions), 0.95 t particle matter (98% savings on current emissions) and 16.38t NOx (84% savings on current emissions). All the new buses will have wheelchair lift access and allocated areas for the disabled people.

The company does not have a formally certified environmental, health and safety services management system; however the ESDD identified that overall environmental, health and safety issue was well managed and well resourced, and that the company has the institutional capacity to implement the project in compliance with the Bank's PRs and Serbian legislation.

Employment conditions, remuneration and social protection terms are defined in the company Collective Agreement and employment contract, and are in line with Serbian Labour Law and EBRD PR2. The company has three trade unions, and a company's Grievance Mechanism is in place.

On the company depot site, oil-water interceptors are present on the drainage network and monitoring results of wastewater discharges from 2018 show that most parameters comply with the municipal standards, with only few occasional exceedances. Two gas fired boilers, each 1,600 kW, fall under the scope of the EU Medium Combustion Plants Directive, and a paint shop and laundry (dry-cleaning process using perchloroethylene) fall under the scope of the EU Industrial Emissions Directive. Currently there is limited air monitoring system; company will undertake an air monitoring campaign to assess compliance with the EU Directives and develop and implement corrective measures in case of non-compliance. The ESDD also confirmed that the waste management system is well organised and compliant with legal requirements.

An Environmental and Social Action Plan (ESAP) has been agreed with the company, in order to address the areas for improvement identified during the ESDD. The ESAP requires air emissions monitoring, improved hydrocarbon handling practises, formal survey for asbestos containing materials at site, depot fire and explosion risk assessment revision prior to purchase of additional CNG buses, and provision of road safety training for bus drivers. A Stakeholder Engagement Plan has been developed by the ESDD Consultant and will be implemented by the client. The EBRD will monitor the project through annual environmental and social reports provided by the company, and site visits if necessary.

In addition, for the loan extension related to the acquisition of 10 electric buses, the E&S due diligence will be undertaken by an independent consultant together with the technical due diligence. It will include a review of the Company's operations with specific attention to the maintenance depot and the proposed future charging electric facilities, road safety and driver training. It will also include a review of the implementation progress of the ESAP agreed for the initial transaction (related to the acquisition of 29 CNG buses) and additional ESAP actions specific to the electric buses project will be identified.

Technical Cooperation and Grant Financing

Pre-signing:

  • Technical, financial and environmental due diligence, including technical review of proposed purchase, preparation of financial models and all environmental and social aspects.
  • Advanced procurement support, to assist the client with the preparation of tender documents and handling procurement process.

Post-signing:

  • GCAP for the city of Novi Sad in order to prioritise investments, capacity building and policy objectives in support of the green agenda.

Company Contact Information

Ivan Radojicic
gspns@gspns.rs
www.gspns.co.rs
Futoski put 46, 21000 Novi Sad, Serbia

PSD last updated

13 Apr 2021

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 more about IPAM and its mandate; how to submit a Request for review; or contact IPAM  via email ipam@ebrd.com to get guidance and more information on IPAM and how to submit a request.

 

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