GrCF2 W2 - Tbilisi Bus Phase III

Location:

Georgia

Project number:

52565

Business sector:

Municipal and environmental infrastructure

Notice type:

State

Environmental category:

B

Approval date:

24 Nov 2021

Status:

Passed Final Review, Pending Approval

PSD disclosed:

28 Jun 2021

Project Description

A sovereign loan of up to EUR 83 million to Georgia to be on-lent to the City of Tbilisi (the "City") for the benefit of Tbilisi Transport Company Ltd (the "Company"), a municipal company operating buses, the metro system and cable cars in Tbilisi. The loan is structured in two tranches: EUR 70 million and EUR 13 million.

 

The Project will finance the acquisition of a new bus fleet of approximately 200 modern 18-meter low-floor articulated compressed natural gas ("CNG") buses and the construction of a new depot for these buses (the "Project").

Project Objectives

The Project will support the City to complete the bus fleet renewal by fully replacing outdated polluting buses with modern environmentally cleaner buses. The Project will bring significant social benefits by facilitating easy access for passengers, and those with limited movement, including the elderly and the disabled; and improve the reliability, safety and efficiency of public transport, while the CNG technology will reduce harmful toxic emissions affecting air quality.

Transition Impact

ETI score: 75

The Project is part of Green Cities 2 ("GrCF2") and a follow-on investment to the Tbilisi Green City Action Plan ("GCAP").

 

The GrCF2's primary goal is to achieve significant environmental improvements and promote the Green transition quality in the targeted cities. The GrCF2 also aims to build necessary capacity and facilitate better coordination between and buy-in from various stakeholders in the relevant cities in order to improve the governance, operational efficiency and financial sustainability of the targeted investments and initiatives. Under the GrCF2, the Bank will put further emphasis on implementation of GCAPs, with at least half of all sub-investments expected to be follow-on transactions addressing critical environmental challenges identified by the GCAPs. Notably, Tbilisi was one of the first cities to join the EBRD Green Cities and one of the first to complete a GCAP. To date 71 per cent of the actions identified under its GCAP are at least 'under implementation', and an additional 17 per cent 'in preparation'. This Project also marks Tbilisi as the City with the most investments under the EBRD Green Cities. The overall transition impact will come from the Green and the Well-Governed qualities.

 

The Project will help to promote the Green transition quality by introducing buses that will reduce local air pollution and transport related environmental impacts, which were identified in Tbilisi's GCAP as a priority ("Bus fleet renewal with low/zero emission buses"). The Project will also support the Well-governed objective through introduction of integrated tariffs.

Client Information

GEORGIA SOVEREIGN

Georgia represented by the Ministry of Finance, the City and the Company.

EBRD Finance Summary

EUR 83,000,000.00

EUR 83 million sovereign loan to Georgia (in two tranches).

Total Project Cost

EUR 83,000,000.00

The Project will also benefit from the technical cooperation assignments to support project preparation and implementation.

Additionality

The Project will be another step for the City to implement the GCAP and to meet commitments made to other sustainability initiatives and programmes.

EBRD offers financing that is not available in the market from commercial sources on reasonable terms and conditions, which are necessary to structure the Project. 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 Company. EBRD supports the Company to achieve higher standards by relying on the best international procurement standards and higher environmental standards.

Environmental and Social Summary

Categorised B (ESP 2019). Environmental and social impacts associated with the purchase and operation of the new low emission CNG buses of EURO VI standard and construction of the new bus depot will be mainly beneficial. Any potential adverse environmental and social impacts will be site-specific and manageable through implementation of good management practices. The Project will contribute to improving accessibility and mobility for all user groups, air quality in the City, safety and efficiency of urban transportation. An Environmental and Social Due Diligence (ESDD) has been undertaken by an independent consultant and included analysis of the existing Environmental and Social Management Systems and performance, status of implementing ESAP actions for the previous transactions; as well as assessment of the impacts associated with the new Project. Assessment also included an analysis of environmental and social impacts and benefits associated with the Project to ensure the proposed specification for the buses will meet EU requirements, considering the findings of the independent technical assessment. Company is an existing Client of the Bank and the ESDD has confirmed that over the past years the Company has made a substantial progress in implementing E&S improvements and has institutional and technical capacity to deliver the Project according to the Bank requirements. The Bank has been also supporting the Company through a number of TCs, specifically, Safety Management System Implementation, Traffic and Driving Safety Management, Gender and PIU TC support. The Company has addressed community safety and OHS risks linked to the COVID-19 response in line with Government guidelines through the Infectious Diseases Management Plan (COVID Management Plan) and the drivers are instructed to follow related procedures. The due diligence has indicated that current environmental, occupational health and safety, and stakeholder engagement practices are in line with the national legislation. TTC continues to duly implement actions agreed with EBRD under previous ESAP. Gender assessment was done for the previous projects, based on which a TC aimed at equal opportunities and training of female bus drivers has been implemented. To further enhance gender component of the Project the Bank will support the Client in development of the Gender Action Plan through post-signing TC. ESDD has identified potential gaps associated with the new Project, which include, inter alia, historical contamination of the proposed bus depo site with biological and other waste, community impacts, air pollution and needs in additional environmental surveys and permitting. The ESAP has been updated to include further improvements and enforcement of safe labour practices, traffic and fire safety, waste management, regulatory permitting compliance, stakeholder engagement. ESAP has been fully agreed with the Client. The Bank will monitor the Company's activities through annual E&S monitoring reports.

Technical Cooperation and Grant Financing

The following technical co-operation ("TC") assignments are included as part of this Project:

 

  • TC1: Technical Due Diligence. The cost of the assignment is EUR 75,000, financed by EBRD Shareholder Special Fund (the "SSF").

 

  • TC2: Pre-Signing Procurement Support for Tranche 1. The cost of the assignment is EUR 35,000, financed by the SSF.

 

  • TC3: Environmental and Social Due Diligence of the Project. The cost of the assignment is EUR 33,000, financed by the SSF.

 

  • TC4: Project Implementation Support for Tranche 2. The estimated cost of this assignment is up to EUR 450,000, to be financed by an international donor or the SSF.

 

  • TC5: Introduction of Integrated Tariffs and Update of the Public Service Contract. The estimated cost of this assignment is up to EUR 250,000, to be financed by an international donor or the SSF.

 

  • TC6: Study on Electric Vehicle ("EV") Charging Policy and Network. The estimated cost of this assignment is up to EUR 75,000, to be financed by an international donor or the SSF.

Company Contact Information

Tamar Machavariani
tmachavariani@metro.ge
+995322357777
http://ttc.com.ge/
Tbilisi Transport Company 2, Station Square, Tbilisi 0112, Georgia

PSD last updated

21 Jul 2021

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

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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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