EBRD/RBRU Municipal Infrastructure Facility

Location:

Russia

Project number:

43300

Business sector:

Municipal and environmental infrastructure

Notice type:

Private

Environmental category:

FI

Target board date:

17 Oct 2012

Status:

Completed

PSD disclosed:

24 May 2012

Translated version of this PSD: Russian

Project Description

The EBRD is considering establishing a participation facility (the “Facility”) of up to RUB 1,950 million to co-finance small and mid-sized municipal infrastructure projects in the Russian Federation together with Raiffeisen Bank Russia (“RBRU”) to meet the demand from the municipal sector for medium-sized loans provided on a long-term basis.

Under the Facility the EBRD will participate in up to 50 per cent of the total amount of each sub-loan to municipal borrowers provided by RBRU. The municipal borrowers will include municipalities, municipal utilities, private utilities operators and energy service companies, acceptable to the Bank and RBRU and satisfying pre-set criteria.

Transition Impact

The project represents a new product aimed at extending the availability of commercial bank lending to small and medium sized municipal borrowers which otherwise have no access to long-term financing.

Incorporation into sub-loan agreements with municipal borrowers of certain transition impact covenants will promote market based activity and efficiency, e.g. metering installation, tariffs allowing cost recovery, operational improvements, energy efficiency measures, etc.

Consultants will assist RBRU in assessment and preparation of projects, including environmental and social impact assessment.

The Client

The municipal borrowers under the Facility will be both private and municipal companies and municipalities. The clients will be selected based on pre-set eligibility criteria and will be found through the RBRU branch network in Russia.

RBRU is a subsidiary of Raiffeisen Bank International AG, and is the 8th largest Russian bank by assets.

EBRD Finance

Participation facility of up to RUB 1,950 million in 4 tranches:

(i) first tranche approved and committed in the amount of RUB 750 million, and
(ii) 3 future potential tranches each equal to RUB 400 million, depending on demand and success of the first tranche. Co-financing of equal amount from RBRU.

Project Cost

RUB 3,900 million.

Environmental Impact

Categorised FI under EBRD’s 2008 Environmental and Social Policy. This project presents significant opportunities for improving municipal environmental infrastructure in small and medium size municipalities in Russia. RBRU is an existing client to EBRD and has been operating in line with PR2 and PR9 requirements and successfully implementing EBRD’s environmental and social requirements under the previous transactions.

Environmental and Social Appraisal and Monitoring Procedures have been developed specifically for EBRD/RBRU Funded Municipal Infrastructure Facility to ensure that investments under this Facility are assessed, implemented and monitored in line with EBRD’s environmental and social requirements. Sub-projects that would fall under category A in accordance with EBRD Environmental and Social Policy or are USD 10 million in size or more will not be eligible for financing under this Facility. Independent consultants will be employed to provide specialist advice and guidance on screening and appraisal of individual sub-projects.

Sub-projects will be required to comply, at a minimum, with national environmental, health and safety, labour and public consultation requirements. Eligibility criteria for sub-projects include checks for compliance with PR9, including adoption of EBRD’s Environmental and Social Exclusion and Referral List. RBRU will be required to report annually on the environmental and social performance of sub-projects and the overall environmental benefits achieved by the Facility on a portfolio basis.

Technical Cooperation

The Facility will be complemented by grant funding to engage project consultants providing support to RBRU and municipal borrowers with project preparation, implementation and monitoring, including:

(i) Panel of Water, Wastewater, District Heating, Solid Waste, and Urban Transport experts to advise municipal borrowers on preparing sub-loan applications (estimated at EUR 350 thousand, to be sourced from international donor funds);

(ii) Environmental Monitoring Consultant to advise municipal borrowers on the environmental and social aspects of a sub-loan and assist to confirm eligibility for financing by the Facility, and to draft standard questionnaire and form of report in cooperation with EBRD (estimated at EUR 150 thousand, to be sourced from international donor funds);

(iii) Procurement monitoring consultant to advise municipal borrowers on all procurement issues and to assist RBRU to review key procurement steps of municipal borrowers (tender documents and contract awards) (estimated at EUR 300 thousand, to be sourced from international donor funds);

(iv) Lender’s monitor to report and advise EBRD and RBRU on project implementation and potential issues (EUR 200 thousand, to be sourced from international donor funds).

Company Contact

Mr.Pavel Bratukhine
Head of Public Sector Department,
ZAO Raiffeisenbank
E-mail: pbratukhin@raiffeisen.ru

Telephone: +7(495)721 9900 ext.8622
Fax: +7(495) 662 7663

 

Business opportunities

For business opportunities or procurement, contact the client company.

For state-sector projects, visit EBRD Procurement: Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

Public Information Policy (PIP)

The PIP 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. Please visit the Public Information Policy page below to find out how to request a Public Sector Board Report.
Text of the PIP

Project Complaint Mechanism (PCM)

The Project Complaint Mechanism (PCM) is the EBRD's accountability mechanism. It provides an opportunity for an independent review of complaints from individuals and organisations concerning EBRD-financed projects which are alleged to have caused, or are likely to cause, environmental and/or social harm.

Please visit the Project Complaint Mechanism page to find information about how to submit a complaint. The PCM Officer (pcm@ebrd.com) is available to answer any questions you may have regarding the submission of a complaint and criteria for registration and eligibility, in accordance with the PCM Rules of Procedure.