Local Roads Reconstruction Loan Increase

Location:

Montenegro

Project number:

51798

Business sector:

Transport

Notice type:

State

Approval date:

02 Sep 2020

Status:

In Exploratory, Pending Concept Review

PSD disclosed:

03 Mar 2020

Project Description

A loan increase to finalise the construction works and upgrade of the 16.2 km Lubnice - Jezerine road, which is a priority transport infrastructure project in Montenegro. The proposed loan increase will be utilised to finance the difference between initially estimated costs and actual construction costs based on the detailed design, the lowest tender received and additional construction costs related to the tunnel construction.

Project Objectives

The aim of the Project is to facilitate economic development of the Bjelasica mountain region and the north-eastern part of Montenegro, whilst shortening the travel time and road distanced between the capital of Podgorica and northeast of the country by 39 km.

Transition Impact

The transition impact from the additional loan will stem from: (i) a significant decrease in travel times (Integrated) and (ii) the preparation of a Road Asset Management System (RAMS) within the Transport Administration (Resilient).

Client Information

MONTENEGRO SOVEREIGN

The Borrower will be the Government of Montenegro represented by the Ministry of Finance, while the client is the Transport Administration ("TA").

EBRD Finance Summary

EUR 26,000,000.00

Total Project Cost

EUR 26,000,000.00

Additionality

The EBRD offers financing that is not available in 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 EBRD offers a tenor above the market average, which is necessary to structure the project.

The EBRD helps the client to mitigate environmental, social and governance (ESG) risks, through identification of risks related to the depletion of natural capital assets, raw materials and water availability etc., and to manage these risks.

The client seeks EBRD's expertise on best international procurement standards.

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

The EBRD offers a tenor, which is above the market average and is necessary to structure the project.

Public sector: EBRD investment is needed to close the funding gap. At the same time, EBRD does not crowd out other sources, such as from IFIs, government, commercial banks and/or complements them.

Environmental and Social Summary

Environmental and social due diligence (ESDD) for the local road Lubnice - Jezerine was undertaken by independent consultants and included a review of the project documentation, site visits and interviews with project staff members. The results of the due diligence determined that the impacts were site-specific and are being addressed through the implementation of appropriate mitigation measures.

A comprehensive Environmental and Social Action Plan (the "ESAP") has been developed for the project to address the ESDD findings to ensure the Project complies with EBRD Performance Requirements. The ESAP requirements focus on: adequate environmental and social baseline surveys, detailed analysis of impacts and development of specific protection/mitigation measures, evaluation of hydrogeological risks from tunnel construction, evaluation of impacts on natural resources, workforce accommodation, preparation of livelihood restoration framework and grievance mechanisms for stakeholders and workforce. The ESAP has been updated by the contractor and the client.  

The Bank selected consultant did Road safety audit of the detailed design and all the recommendations have been taken into account in the design and implementation of the roads.

EBRD monitors implementation of the project through regular reports provided by the project implementation unit and undertakes site visits three times a year.

Technical Cooperation and Grant Financing

Technical assistance will be provided for the preparation of a Road Asset Management System (RAMS):

  1. Main objective of the TC is to achieve optimal sourcing and allocation of resources for the management, operation, preservation and enhancement of the road infrastructure.  The RAMS is expected to provide a more objective and rational approach to road planning and resource allocation.
  2. Funding source will be identified prior to Board approval.
  3. Amount/currency and funding status: up to EUR 400,000.

The TC will be post investment.

Company Contact Information

Savo Paraca
upravazasaobracaj@uzs.gov.me
+382 20 655 084
https://dzscg.com/
Uprava za saobracaj IV Proleterske 19, 81000 Podgorica Montenegro

Implementation summary


PSD last updated

03 Mar 2020

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

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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.

Project Complaint Mechanism (PCM)

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 accountability mechanism.

The accountability mechanism 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 our webpage to find out how to submit a complaint through the confidential online form, by email, mail or telephone. We are available to discuss your concerns and answer any questions you may have about the submission or handling of complaints. Complainants’ identities may be kept confidential upon request.

Please note that after the appointment of the new mechanism Head in 2020, the revised Project Accountability Policy and Guidance will come into effect to guide case handling.

 

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