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.
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.
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).
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
Total Project Cost
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):
- 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.
- Funding source will be identified prior to Board approval.
- Amount/currency and funding status: up to EUR 400,000.
The TC will be post investment.
Company Contact Information
+382 20 655 084
Uprava za saobracaj IV Proleterske 19, 81000 Podgorica Montenegro
PSD last updated
03 Mar 2020
Further information regarding the EBRD’s approach to measuring transition impact is available here.
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