GrCF2 W2 - Yerevan Bus Project

Location:

Armenia

Project number:

51749

Business sector:

Municipal and environmental infrastructure

Notice type:

State

Environmental category:

B

Approval date:

21 Sep 2021

Status:

Passed Concept Review, Pending Final Review

PSD disclosed:

17 Feb 2020

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

The EBRD is considering a sovereign loan of up to EUR 20 million to the Republic of Armenia, which is expected to be co-financed by an investment grant of EUR 5 million from the Eastern Europe Energy Efficiency and Environment Partnership (the "E5P"). The loan proceeds and investment grant funds will be used to finance the acquisition of up to 100 units of modern 12-metre low-floor Compressed Natural Gas ("CNG") buses for the City of Yerevan (the "City") (the "Project"). 

Project Objectives

The project is part of a broader programme aiming to assist the city to reform its public transport system by financing the renewal of its bus fleet in anticipation of the restructuring of the bus network.

The project will improve the reliability, safety and efficiency of public transport, while CNG technology will reduce air pollution in line with the Bank's Green Cities Framework and the Green City Action Plan as approved by the city of Yerevan in 2017.

Transition Impact

ETI score: 70

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

The GrCF2's primary goal is to achieve significant environmental improvements and promote the green transition quality within the relevant cities. The GrCF2 also aims to build necessary capacity and facilitate better coordination and buy-in among various stakeholders within the relevant cities to improve the targeted investments' and initiatives' governance quality, operational efficiency and financial sustainability. These objectives are supported by the development and implementation of a Yerevan GCAP, identifying and prioritising environmental challenges and ways to address them through targeted investments, services and policy instruments. The Bank will also seek to introduce more robust policy advice on the back of lessons learned, targeted studies and technical assistance. 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.

The overall transition impact will stem from the Green and the Well-Governed qualities, which will be achieved through the signing of a public service contract.

Client Information

ARMENIA SOVEREIGN

Armenia represented by the Ministry of Finance. The project will be implemented by the city and the company.

EBRD Finance Summary

EUR 20,000,000.00

€20 million sovereign loan to the Republic of Armenia.

Total Project Cost

EUR 25,000,000.00

The total project cost is €25 million.

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

Additionality

The EBRD offers financing that is not available on the market from commercial sources on reasonable terms and conditions, e.g. a longer grace period than the market average, restricted foreign currency financing etc. Such financing is necessary to structure the project.

The Client seeks the EBRD's expertise on introduction of higher environmental standards, mitigation of carbon emission risks and client taking climate action, as well as the best international procurement standards.

Environmental and Social Summary

Categorised B under the 2019 ESP. Replacement of the existing municipal transport fleet by brand new CNG Euro VI buses will have beneficial Environmental and Social impacts, resulting in annual abatement of 2,939 tonnes CO2 per year. Any potential adverse environmental and social impacts will be site-specific and manageable through implementation of Environmental and Social Action Plan (ESAP) that has been fully agreed with the Municipality.

The Environmental and Social Due Diligence (ESDD) has been undertaken by an independent consultant and included an E&S audit of the Yerevan Bus Company, covering E&S management systems and practices, analysis of environmental and social impacts and benefits associated with the Project to ensure the proposed specification for the buses and municipal vehicles will meet EU requirements. Associated facilities, such as bus depots, financed by ADB, were also taken into consideration. Prior to construction of the bus depot facilities, which is outside the scope of EBRD financing, the municipality shall allocate an appropriate land plot that meets safety, security and sanitary requirements, requiring no physical and economic displacement. As CP to first disbursement the Client shall submit PR5 due diligence report confirming the absence or presence of land acquisition and resettlement impacts/risks related to the new bus depo and enforcement of Sanitary Protection Zone (SPZ). If SPZ is enforced and PR5 DD confirms PR5 impacts, a resettlement plan will be prepared to acquire the affected lands and houses within SPZ.

ESDD has established that the Client is generally compliant with the local regulation and has capacity to implement the Project in line with EBRD PRs, with the help of the established internal PIU. However, considerable improvements are required in terms of overall Environmental and Safety Management Systems to bring the project into compliance with the Bank's requirement. Fire safety and emergency preparedness were identified as the major non-compliances. The Company has addressed public safety and OHS risks linked to the COVID-19 response in line with Government guidelines. The Company has reportedly implemented health and safety measures for employees and passengers, such as: disinfection of all facilities; social distancing warning signs (number of people in the buses and seating order); and requiring the wearing of protective equipment (gloves and facial masks) for employees, drivers and passengers; as well as remote working wherever possible.

The ESAP has been developed to focus on the identified gaps. It includes a number of recommendations aimed at improving the operational health and safety practices, as well as environmental management aspects, the development of the Environment and Safety Management Systems in line with ISO 14001 and 45001 standards, obtaining of all the required E&S permitting and authorisations, introduction of environmental and safety monitoring, driving safety measures, fire safety and emergency preparedness, professional conduct and GBVH policy, social and labour management system, inclusive of the grievance mechanism, as well and stakeholder engagement plan. The Non-Technical summary has been developed for the project and disclosed on the Client's web-site. The Bank will monitor the Company's activities through annual E&S monitoring reports.

https://www.yerevan.am/uploads/media/default/0001/99/e2d7b7390844b622dbfbc6192c059b353296a526.pdf  

Technical Cooperation and Grant Financing

Pre-signing Technical Cooperation ("TC") support for the Project will include Technical, Financial, Environmental and Social Due Diligence, while post-signing TC support will include City Support and Corporate Development Programs. The total estimated cost of TC assignments is up to EUR 1.1 million.

Company Contact Information

Hrachya Sargsyan
newtransport@yerevan.am
+37411514150
www.yerevan.am
Yerevan Municipality 1 Argishti str., Yerevan, 0015, Armenia

PSD last updated

27 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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