Project Description
Provision of up to EUR 2.8 million (to be available in JOD) unsecured sub-sovereign loan to GAM to finance the purchase of up to 15 new battery electric buses ("BEB"), as a pilot rollout for the first electric bus transport in the city. The project is a follow-on investment of Amman's Green City Action Plan, and is part of a larger fleet expansion project that involves purchasing a total of 151 buses, including 136 diesel Euro V buses in addition to the remaining 15 BEB buses considered herein. The project aims to improve public transport in the city of Amman, while serving as a crucial first step towards transitioning into low-carbon transport infrastructure. Total Project cost is expected to be EUR 5.6 million, which is expected to be co-financed by a Green Climate Fund ("GCF") concessional loan of EUR 2.8 million in addition to the Bank loan of EUR 2.8 million.
Project Objectives
GAM is seeking to improve its urban transport services and renew its bus fleet through the purchase of up to 151 new buses with related bus depot facilities and ancillary systems. The proposed new bus fleet will serve new routes under the bus network plan developed by GAM. It is intended that the bus fleet will be purchased by GAM and leased to a private sector operator, which will be responsible for the depot facilities and warranty and maintenance obligations for the fleet. The bus operator will be paid through a Public Service Contract ("PSC") with Amman Vision for Transport (the municipal company responsible for transport operations) under a gross-cost arrangement. This purchase of 151 new buses will include 15 e-buses as a pilot project to debut zero-emission public transport vehicles in Amman, in an effort to transition into a low-carbon public transportation system (the "Project"). The Project is expected to have a strong demonstration effect, being the first of its kind in the country, as well as the SEMED region, financed by EBRD. The Project is a follow-on investment from Amman's Green City Action Plan ("GCAP"), developed as part of the City's participation in EBRD Green Cities. The electric bus fleet aligns with actions identified in the GCAP and supports the City to address the GCAP priorities of reducing GHG emissions and air pollution. The Project is also eligible for dedicated concessional funds for Green Cities projects from the Green Climate Fund ("GCF") by promoting electric mobility. The Project will benefit from a concessional loan which will match EBRD funding. The tender for the Project is expected be launched in December 2020.
The planned purchase of the new buses is expected to improve the reliability and quality of public transport services for users, as well as significantly reduce GHG and air pollutant emissions from transport through the use of alternative fuels and improved fuel efficiency, in compliance with objectives and commitments of the city. The investment in the new buses will result in a significant reduction in emissions (clean air and GHG related) from the urban bus sector.
Transition Impact
ETI score: 75
The GrCF2 is a strategic and multi-project approach targeting environmental issues in selected large cities in the EBRD's countries of operation. The primary goal is to achieve significant environmental improvements and promote the green transition quality within the relevant city. The GrCF2 also aims to build necessary capacity and facilitate better coordination and buy-in among various stakeholders within the relevant cities in order to improve the governance, operational efficiency and financial sustainability of the targeted investments and initiatives. These objectives are supported by the development and implementation of a city-specific GCAP identifying and prioritising environmental challenges and ways to address them through targeted investments, services and policy instruments.
The Project will help to promote the Green transition quality by addressing Amman's priority needs as identified by the GCAP. Namely, the GCAP identified climate mitigation, air pollution, the age and associated impacts of private vehicles and promotion of public transport as priority environmental challenges for the City to address. By encouraging a shift to public transport through improved access and efficiency of the metro system, the Project will address multiple GCAP priorities. The Project will impact transport operations and also reduce Carbon Dioxide ("CO2") by 287 tonnes per year, particulate matter ("PM") by 0.02 tonnes, and NOx by 1.6 tonnes per year. Amman is actively working on implementation of the GCAP with EBRD support, as well as using its own funds.
The Project will support the Well-Governed transition objective through the signing of a PSC for to the bus operations (in a similar manner to Amman Bus I project). The policy dialogue will also support for the implementation of an integrated ticketing and validation systems, to streamline the payment process across multiple operators, thus further improving the quality of public transport in the City.
Client Information
MUNICIPALITY OF GREATER AMMAN
GAM is an autonomous institution responsible for most municipal services within the city of Amman, which includes inter alia solid waste management, transportation, street lighting, intra-city roads, stormwater drainage, and municipal parks and recreation centres. Given the autonomous nature of GAM, it remains independent from budget transfers from the GoJ and has its own budget that is mainly funded by municipal taxes and service fees, including significant proportion from direct taxation of businesses and households, building permits, property development, and traffic fines.
GAM is headed by the Mayor who serves as the supreme executive and chairman of the city council. The Mayor is appointed by the Council of Ministers and by recommendation from the Prime Minister.
EBRD Finance Summary
EUR 2,800,000.00
Up to EUR 2.8 million (to be available in JOD) unsecured sub-sovereign loan to GAM to finance the purchase of up to 15 new battery electric buses, to be co-financed by a GCF concessional loan of EUR 2.8 million.
Total Project Cost
EUR 5,600,000.00
Additionality
Identified triggers: A subsequent repeat transaction with the same client or another city in Jordan.
Financing Structure -
EBRD offers financing that is not available in the market from commercial sources on reasonable terms and conditions, e.g. a longer grace period that is rarely available in the market, restricted foreign currency financing etc. Such financing is necessary to structure the project.
Risk Mitigation
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.
Standard-setting: helping projects and clients achieve higher standards
- Client seeks/makes use of EBRD expertise on best international procurement standards.
Client seeks/makes use of EBRD expertise on higher financial standards, including through financial covenants.
Knowledge, innovation, and capacity building
EBRD provides expertise, innovation, knowledge and/or capabilities that are material to the timely realisation of the project's objectives, including support to strengthen the capacity of the client
Environmental and Social Summary
Categorised B (ESP 2019). The Environmental and Social Due Diligence ("ESDD") for the project has been undertaken by an independent consultant and included an environmental and social (E&S) assessment of the project, a review of the current Amman Bus I operations (including a user survey) as well as the E&S management systems and the capacity of GAM as it relates to bus operations.
The ESDD confirmed that benefits associated with the purchase of the new electric buses reaching EURO V emission standards include contribution to improving accessibility and mobility for all user groups and the safety and efficiency of urban transportation, as well as a reduction in CO2 emissions of 280 tonnes per year compared with the use of existing cars, buses and taxis in the absence of the project.
The specifications of the new buses have incorporated E&S requirements such as accessibility including for persons with disabilities, provision of CCTV monitoring, safety and emergency response and audio and visual passenger communication systems. In support of the Project a new depot to store and maintain the buses will be developed. A review of the proposed depot location was conducted (assuming the Phase I operator is selected for Phase II) and identified site-specific E&S impacts and mitigations. No involuntary resettlement or economic displacement is associated with this option. Based on the final location of the depot, an environmental and social assessment which meets the objectives of the PRs and a national EIA (if applicable) are required to be put in place by the depot developer prior to construction. In addition, E&S specifications for the depot design will be included in the operating contract and an Environmental and Social Management Plan ("ESMP") and Traffic Management Plan implemented for both the depot construction, installation of new charging infrastructure for electric buses and operational phases.
The bus operator will be required to implement an HR policy and procedures in accordance with PR2 and develop a workforce grievance procedure. A driver training programme including safety and behavioural aspects and Code of Conduct, with specific provisions on Gender Based Violence and Harassment, for the service will be implemented. A health and safety plan incorporating a COVID-19 risk assessment and emergency response plan will be put in place and quarterly reviews of H&S performance and customer feedback will be conducted between GAM and the bus operator, supported by a formal annual audit of bus and user safety. Fares will be the same as that for the Phase 1 buses which are aligned with bus fares in the City, hence no affordability issues are anticipated.
GAM does not yet operate an Environmental and Social Management System ("ESMS") at a corporate level, and in the context of this Project will be required to develop a EHSS policy for transport operations and an E&S monitoring plan to monitor the performance of the bus operator and the implementation of their ESMP.
A SEP has been developed which will be implemented by GAM, and the existing grievance system for transport operations needs to be enhanced to meet PR10 requirements and include gender considerations. Although the new buses will operate on new lines, the client is also required to raise awareness within existing small bus operators of changes to the legislation which by 2022 require existing individual bus licence holders to either sell the rights of their lines to GAM or consolidate with others to form service providers that meet the standards stipulated by GAM.
The above requirements have been included in the ESAP which has been developed and will be agreed with GAM prior to the signing of the loan agreement. Additional support for ESAP implementation will be provided through a TC assignment. The Bank will monitor the Company's activities through annual E&S monitoring reports and site visits if necessary.
Technical Cooperation and Grant Financing
Concessional funds:
EUR 2.8 million concessional loan from the Green Climate Fund.
Company Contact Information
Hussain Alrubehat
hussain.alrubehat@ammancity.gov.jo
+96264621179
PSD last updated
15 Dec 2020
Understanding Transition
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 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.
