GrCF - Batumi Bus

Location:

Georgia

Project number:

48104

Business sector:

Municipal and environmental infrastructure

Notice type:

Public

Environmental category:

B

Approval date:

14 Jun 2017

Status:

Disbursing

PSD disclosed:

16 Nov 2018

Translated version of this PSD: Georgian

Project Description

A sovereign loan of EUR 5.5 million to Georgia, on-lent to the City of Batumi (the City) for the benefit of Batumi Autotransport LLC (the Company), a municipal bus company. The loan is divided in 2 tranches: EUR 3.2 million and EUR 2.3 million respectively.

Tranche 2 is co-financed by a capital expenditure grant of EUR 1.5 million from the Eastern Europe Energy Efficiency and Environment
Partnership (E5P).

Project Objectives

The Project aims to improve and modernise bus operations in Batumi through the upgrade of its bus fleet.

The project will be complemented by a technical cooperation (TC) package to improve the operational and financial performance of the Company, through the Corporate Development Programme (CDP), assist the City to prepare a Green City Action Plan (GCAP) and raise public awareness on transport related issues.

Transition Impact

Strong Good

The Green Cities Framework (GrCF) and each sub-project within the Framework will promote significant environmental improvements and support the Green transition quality through the
development and implementation of GCAPs for the respective cities. The Framework will also pursue TI objectives related to the Well-governed transition quality through the support of better
institutional capacity for planning, regulating and monitoring environmental activities and through better contractual, financial and operational clarity in the relevant sectors.

The transition qualities promoted by the project are consistent with the GrCF. The Green quality will be promoted through significant reduction in emissions of CO2 and local air pollutants. The Well-governed quality will be promoted through the improved planning, supervision and monitoring of environmental activities under the GCAP as well as through improved contractual and regulatory arrangements for the bus operations in Batumi.

Client Information

GEORGIA SOVEREIGN

The Government of Georgia, the City and the Company.

EBRD Finance Summary

EUR 5,500,000.00

EUR 5.5 million sovereign loan to Georgia co-financed by a capital grant of EUR 1.5 million from E5P Fund. The funds will be on-lent to the City of Batumi for the benefit of the Company.

Total Project Cost

EUR 7,000,000.00

The total project cost is EUR 7 million including co-financing provided by E5P Fund.

The project also benefits from technical cooperation assignments to support project preparation and implementation.

Environmental and Social Summary

Categorised B (ESP 2014). It is deemed that the environmental and social impacts associated with the purchase and operation of the new electric buses and upgrade of the depot will be mainly beneficial. Any potential adverse environmental and social impacts will be site-specific and manageable through the implementation of the ESAP. The Project will contribute to improving accessibility and mobility for all user groups, air quality in the City, together with safety and efficiency of urban transportation. 

The environmental and social due diligence has been undertaken in-house and included a review of the Company's existing management systems, facilities and operations with specific attention to EHS practices at the depots and maintenance facilities, labour conditions, road and driver safety. 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. 

The Company is an existing Client of the Bank and the ESDD has confirmed that over the past years the Company has made substantial progress in implementing E&S improvements and has the institutional and technical capacity to deliver the Project. The due diligence has indicated that current environmental, occupational health and safety, and stakeholder engagement practices and management systems are generally in line with the national legislation.  The main issues requiring improvements include enforcement of safe labour practices, traffic and fire safety and wastewater and waste management at the depot. Company-level Environmental, Social and Safety Management systems also require further improvement, including additional environmental and safety training, risk assessment, inspections, incident investigation and reporting and a  proper grievance management. The measures to address these gaps were included into Environmental and Social Action Plan (ESAP) that has been shared with the Client. Overall it has been confirmed that the project is structured to meet EBRD PRs. The Bank will monitor the Company's activities through annual reports and if deemed necessary, site visits.

Technical Cooperation

The below TC packages have been envisaged under this project:

  • TC 1: Technical and financial due diligence and procurement support. EUR 70,000, funded from the E5P allocation of the EBRD Shareholder Special Fund (SSF).
     
  • TC 2: Extension of TC 1 for advance procurement support to facilitate the timely and effective implementation of the project. EUR 70,000, funded by EBRD SSF.
     
  • TC 3: Development of a GCAP for the City. EUR 300,000, funded by EBRD SSF.
     
  • TC 4: Corporate Development and Stakeholder Participation Program. EUR 280,000, funded by the EU-funded Municipal Project Support Facility.

Company Contact Information

Giorgi Koncelidze
info@batauto.ge
+995422247676
http://batauto.ge
13, Sulkhan-Saba Orbeliani Str., Batumi, Georgia

Business opportunities

For business opportunities or procurement, contact the client company.

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