Provision of a sovereign loan to the Republic of Kosovo to be on-lent to vital infrastructure providers (state and municipally owned companies, and municipalities in respect of vital infrastructure services) affected by the COVID-19 pandemic crisis (the "Project"). The proposed emergency liquidity loan will make available essential financing for working capital and stabilisation to enable vital infrastructure providers to develop effective responses to the crisis. The Project falls under the Bank's Vital Infrastructure Support Programme, part of its Solidarity Package 2.0.
i. To ensure continuity of vital infrastructure services during the current pandemic;
ii. To support vital infrastructure providers to maintain their capacity and, accordingly, enable the private sector and the economy to recover from the crisis;
iii. To support improvement of corporate governance of vital infrastructure providers.
ETI score: 65
The expected transition impact of the project includes:
- Through stabilisation facilities for key infrastructure providers, which will benefit the local residents and private sector by ensuring reliability and viability of vital infrastructure throughout and beyond the COVID-19 crisis.
- Support adoption and implementation of a draft law on publicly owned enterprises ("POEs") that align its corporate governance-related provisions with international best practices;
- Support the Government of Kosovo on developing a state ownership policy for POEs.
The Borrower is the Republic of Kosovo represented by the Ministry of Finance. The beneficiaries include vital infrastructure providers such as regional water and waste water companies, ICT, postal services, railway and bus transport, solid waste management and district heating.
EBRD Finance Summary
A sovereign loan of up to EUR 30 million.
Total Project Cost
The total estimated project cost is approximately EUR 30 million.
EBRD financing is provided in the extraordinary circumstances of the COVID-19 crisis. EBRD financing effectively bridges a liquidity gap due to adverse market conditions.
Environmental and Social Summary
Categorised C (ESP 2019). The Project is categorised C, since the use of proceeds is related to the provision of working capital to address issues such as office expenses and the payment of salaries (no physical works). The Borrower will be required to comply with the Bank's Performance Requirements ("PRs") but since the Project is not expected to have potential adverse environmental and/or social impacts, the need to develop an environmental and social action plan ("ESAP") was not identified. Environmental and social due diligence ("ESDD") was conducted in-house, and consisted of raising written questions to the MoF on labour conditions, health and safety, and environmental management procedures. The ESDD concluded that the MoF follows national regulation but does not have a health and safety ("HSE") management system in place.
In addition, since the main environmental and social ("E&S") risks in this Project are related to the activities of the eligible sub-borrowers (beyond the Bank's use of proceeds), a post-signing Technical Cooperation ("TC") assignment towards the eligible sub-borrowers will be implemented in parallel to this Project in order to build their capacity and manage their main E&S risks.
The MoF complies with Kosovo's Law on Labour and employees are free to join a workers' organisation. Although the MoF does not have an occupational health and safety ("OHS") management system, occupational accidents and diseases are documented, as required by national regulation, and will be the baseline which should be expected given they are public entities. The condition that, in making sub-loans, the MoF requires in the on-lending agreements that the eligible sub-borrowers conduct their business in accordance with the national regulation related to HSE and labour conditions, has been covenanted. Satisfactory assessment by the Bank of the Borrower's compliance with the PRs during Tranche A is a condition precedent to disbursement of Tranche B.
Phase 1 of the transactional TC related to the Project has been approved by the Bank, comprising the scoping of the capacity building program and the development of the monitoring system, and will start after signing of the loan agreement.
Technical Cooperation and Grant Financing
- Financial advisory assistance to larger municipalities to analyse and mitigate the impact of COVID-19 on budgets and finances of municipalities and municipal companies, and provision of key public services.
2. Environmental and Social capacity building programme:
- Capacity building of the eligible sub-borrowers on good international practice ("GIP") in relation to E&S issues in the sector;
- Supporting the POEs Monitoring Unit at the Ministry of Economic Development in developing and implementing a monitoring system that satisfies EBRD standards, for the duration of hte Project.
Company Contact Information
+383 45 270 300
PSD last updated
22 Jun 2020
Further information regarding the EBRD’s approach to measuring transition impact is available here.
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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 email@example.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 firstname.lastname@example.org to get guidance and more information on IPAM and how to submit a request.