GrCF2-Izmir Metro Project III

Location:

Turkey

Project number:

51599

Business sector:

Municipal and environmental infrastructure

Notice type:

State

Environmental category:

IESE

Approval date:

28 Apr 2021

Status:

Signed

PSD disclosed:

15 Dec 2020

Project Description

A senior loan of up to EUR 125 million to Izmir Metropolitan Municipality. The proceeds of the loan will be used for the construction of Buca metro line, including 11 stations, a depot and 19.5 km of metro line (13.5 km main line and 6 km depot access tunnels).

Project Objectives

The construction of a new metro line is part of the city's extension of its urban rail network to meet increasing demand, providing an environmentally friendly alternative to private vehicles.

Transition Impact

ETI score: 75

The Project is part of the Green City Framework 2 (GrCF2) Window II, which provides a strategic and multi-project approach targeting environmental issues in selected large cities in the Bank's countries of operation. The primary goal is to achieve significant environmental improvements and promote the green transition quality within the relevant cities. The GrCF2 also aims to build the necessary capacity and facilitate better coordination and buy-in among various stakeholders within cities in order to improve the governance, operational efficiency and financial sustainability of the targeted investments and initiatives. 

This Project will contribute to achieving Framework objectives in the following ways:

Green: The Project is in line with the Bank's Green Economy Transition approach. The Project is expected to result in significant reductions in air pollution emissions, along with greenhouse gases, through the expansion of public transportation infrastructure coupled with a shift away from diesel fuel.

Well-governed: The Project will be the "follow-on project" for the City under EBRD Green Cities and will support the City to implement the Green Cities Action Plan, which introduced improvements in local planning and coordination of infrastructure development in medium and long term. The Bank will provide technical assistance to review and improve asset management practices as well as further efficiency improvements and opportunities for private sector involvement. The Project will also pursue the development of the Land Value Capture model by the City. 

Client Information

MUNICIPALITY OF IZMIR

Izmir Metropolitan Municipality is a public legal entity established and governed under Turkish laws. It is the third largest municipal entity in Turkey with a population of 4.4 million. The Buca Metro Line will be operated by the city's municipal public transport company, Izmir Metro A.S.

EBRD Finance Summary

EUR 125,000,000.00

A senior loan of up to EUR 125 million to Izmir Metropolitan Municipality. The remainder of the project cost will be financed by the parallel lenders and the City's own budget contribution.

Total Project Cost

EUR 652,000,000.00

Additionality

Key sources of additionality are financing structure, helping projects and clients achieve higher standards as well as knowledge, innovation and capacity building.

The EBRD stands ready to help the company improve corporate governance, including the climate risk mitigation and higher environmental standards. The EBRD will provide expertise, innovation, knowledge and capabilities that are material to the timely realisation of the project's objectives.

Environmental and Social Summary

Categorised B (2014 ESP). The impacts and risks associated with the project are readily identified and can be managed through the implementation of the identified mitigation measures. The project has been subject to an environmental and social (E&S) appraisal carried out by independent consultants who also conducted audits on the implementation of E&S policies and management systems of both Izmir Metro (IM) responsible for metro operations and Izmir Metropolitan Municipality (IMM) as well as their current contractors responsible for construction of the ongoing metro project.

The environmental and social due diligence ( ESDD) confirmed that the Client is generally on track in implementation and reporting of the  Environmental and Social Action Plan (ESAP) requirements agreed for the ongoing metro project with some improvement areas remaining such as recording of all stakeholder engagement and social monitoring activities, all of which are included in the new ESAP.

The Project, Izmir Buca Metro line, is a sub-project under the EBRD Green Cities Programme and consists of 13.5 km underground metro line with 11 stations. The Project will be built on state owned lands in residential areas and so will not require any private land acquisition and or resettlement of private assets/buildings. The project will not impact any biodiversity or nature reserve areas or national parks. An Environmental Impact Assessment (EIA) exemption decision is approved by the authorities.

The Project is expected to result in safer and more reliable transport services for about 350,000 passengers per day and will help to reduce traffic congestion and noise pollution. The new Buca line, together with its integration to the existing network, will replace high-carbon modes such as private cars and minibuses, thereby reducing air pollution, with the abatement of emissions.

The project will be constructed using the Tunnel Boring Method (TBM), which means that impacts during construction will be largely confined the areas around the new stations. These are located on lands owned by IMM. Some local businesses around the metro stations can be affected due to temporary construction nuisance such as traffic, noise and dust impacts. Other impacts anticipated during the construction phase are; occupational health & safety, labour, and working conditions of contractor employees, emergency planning, noise and potential vibration risks to the old buildings, cultural heritage impacts  particularly at Kasaplar Square and waste management throughout constructing phase.

During the operation phase, the potential impacts are generally less significant and relate to noise, pollution control, and management of fire safety risks, labour issues and community safety and security issues during transportation. Management of gender based violence and harassment risks (GBVH) to workers and communities are identified as an area for improvement during ESDD in line with the new 2019 ESP.

To mitigate these impacts during construction and operation phases of the metro, specific mitigation measures are identified and agreed in the ESAP. The client is required to undertake the measures defined in the ESAP and monitor the implementation during the lifetime of the project.

EBRD will be monitoring the project on regular basis either through direct visit or through monitoring reports. An independent E&S consultancy support will be provided to build the capacity of the Municipality in E&S risk management and monitoring during project implementation.

Technical Cooperation and Grant Financing

Pre-signing:

Technical, financial, and environmental and social due diligence will be carried out for the project (EUR 200,000 in total). This technical co-operation is funded from the EBRD's Shareholder Special Fund.

Pre-signing Procurement Support to review the design specifications and support to Izmir for the application of the EBRD Procurement Policies and Rules (PP&Rs) for the contracts proposed for financing by the EBRD. The cost of the assignment is EUR 74,000, financed by the EBRD's Shareholder Special Fund.

Post-signing:

Implementation Support: Project Implementation Support Services to the Company to include the organisation of a transparent procurement process for the metro extension as well as assistance to Izmir Metropolitan Municipality for the preparation of tender documents in line with the EBRD PP&Rs for the contracts proposed for financing by the EBRD.  The cost of the assignment is EUR 200,000, proposed to be financed by an international donor or the EBRD's Shareholder Special Fund.

Corporate Development Programme. Assistance to the Company to review and improve asset management practices and strategy, as well as the development of a land value capture model to identify a best practice for Izmir. The cost of the assignment is EUR 450,000, proposed to be financed by an international donor or the EBRD's Shareholder Special Fund.

 

Company Contact Information

Mehmet Oguz Ergenekon
ibbrsistem@gmail.com
00902322931200
www.izmir.bel.tr
Izmir Buyuksehir Belediyesi Cumhuriyet Bulvari 305; No:1 Konak/ IZMIR

Implementation summary


PSD last updated

01 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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