Rural broadband rollout

Location:

Serbia

Project number:

51835

Business sector:

Information and Communication Technologies

Notice type:

State

Environmental category:

B

Approval date:

18 Nov 2020

Status:

Signed

PSD disclosed:

19 May 2020

Project Description

Provision of a sovereign loan to the Republic of Serbia to finance the construction of mid-mile fibre broadband infrastructure connecting around 600 rural schools in Serbia to the existing fibre backbone network.

Project Objectives

The project will support the deployment of mid-mile fibre broadband that will connect existing fibre backbone to 600 schools in white zones (without access to broadband network) in rural areas in Serbia. The project is part of a larger initiative and represents the first of two phases, whereas the second phase targeting around 900 schools is planned for 2021/2022 as a separate project.

Due to geographic isolation and low population density, deploying broadband in white areas is not sufficiently profitable for any single operator. Mid-mile network rollout and provision of this network to telecom operators on a free-use rights basis will decrease the capex required for network expansion to households in rural areas, making targeted white zones more attractive for investment by operators. The Ministry of Trade, Tourism and Telecommunication (MoTT) as client and implementing agency aims to incentivise telecom operators to deploy last-mile broadband to households in white zones in rural areas, which are not targeted for network expansion by any operator in the next 3 years.

The project will address the shortage of digitally skilled labour, which Serbia is experiencing due to the recent rapid ICT sector growth and which now presents a serious handicap to private sector development. The project will also address the digital rural-urban divide, since the lack of broadband in rural areas reduces the capacity of a large portion of the country's population to fully participate in the modern economy.

The project is supported by the Western Balkans Investment Framework ("WBIF") with a Technical Cooperation ("TC") grant in the amount of EUR 1.7 mln for project preparation, whereas the EBRD acts as the lead IFI for this project.

The project is in line with the EBRD Country Strategy for Serbia (BDS/SB/17-1 /F), with the objective to improve the public governance and business climate through "support to new technologies and innovation, benefitting from digital switchover and broadband penetration", as well as with the ICT Sector Strategy (BDS14-052).

The project contributes towards the Bank's Economic Inclusion Strategy (BDS17-067) by opening up access to services that enhance economic opportunities for people in less-developed regions. The project is in line with the EU digital agenda, which supports transition into a digital economy, bringing faster economic growth, more jobs, and better services. The project is also in line with the Strategy for the Development of Broadband Networks and Services adopted by the Serbian government in 2014, and with the Strategy for the development of networks of new generations until 2023 from 2018. The project is in line with Strategy for Development of Information Society and Strategy for Development of Electronic Communications, which together make the Digital Agenda for Serbia.

Transition Impact

ETI score: 65

The project will promote competitiveness by engaging in a competitiveness-focused policy dialogue initiative that is relevant in the country and sector context. By providing the mid-mile infrastructure, the MoTT incentivises operators to build the last-mile infrastructure, expanding the available market by connecting additional subscribers to the network and thereby improving the competitive environment for all operators. The project will also promote the inclusive quality through creating new economic opportunities for women/local population in less developed regions and by introducing new, replicable and accredited training programmes to equip young people/ women/ local population with higher skill levels.

Client Information

SERBIA SOVEREIGN

The borrower is the Republic of Serbia represented by the Ministry of Finance. The client and executing agency is the Ministry of Trade, Tourism and Telecommunication.

EBRD Finance Summary

EUR 18,000,000.00

Total Project Cost

EUR 19,700,000.00

Additionality

The EBRD investment is needed to close the public sector funding gap. Additionally, the Bank is a partner organisation under the WBIF acting as the lead IFI in the project. The WBIF blended approach is highly additional with grant support enabling the implementation of the project which would not be otherwise possible.

Environmental and Social Summary

Categorised B under the 2019 ESP and Low-medium risk. Key environmental & social (E&S) issues associated with the construction of a mid-mile fibre broadband infrastructure connecting around 600 rural schools in Serbia to consider include public safety, in particular of school children, traffic disturbance and other nuisances (air and noise pollution) during construction, contractor management, labour & OHS issues and stakeholder engagement and public information on the proposed works. E&S due diligence (ESDD) will be initiated by ESD to examine the MoTT's E&S risk management capacities to structure the project in line with EBRD PRs by initially reviewing the ESDD Questionnaire to be completed by the MoTT. If any shortcomings are identified, further examination will follow and an ESAP will be developed and agreed with the client. As a lead IFI for the project, ESD will review the TOR of the Consultant under the project preparation TC. The Project is expected to contribute to rural schools' access to internet and online educational contents.

Technical Cooperation and Grant Financing

The following Technical Co-operation assignments are envisaged as part of the Project:

-   Technical due diligence;

-   Environmental and Social due diligence.

The TC programme is subject to further amendments and confirmation. For consultant opportunities for projects financed by technical cooperation funds, visit procurement of consultants.

Company Contact Information

Milan Dobrijevic
milan.dobrijevic@mtt.gov.rs
+ 381 11 2020 072
7 Pariska St. 11000 Belgrade, Serbia

PSD last updated

19 May 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

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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