Gyumri Urban Roads

Translated version of this PSD: Armenian

Project description and objectives

The EBRD is providing assistance to the city of Gyumri in Armenia (the “City”) in rehabilitation of major streets and modernisation of public lighting in the City.

A sovereign loan of up to EUR 14.6 million to Armenia for the benefit of the City through an on-granting arrangement. The Loan will consist of three tranches, a committed Tranche A of EUR 5.3 million, uncommitted Tranche B of EUR 5.3 million and uncommitted Tranche C of EUR 4 million. The project is expected to be co-financed with an investment grant in the total amount of up to EUR 7.3 million. The grant will also consist of three tranches. The donors will be identified separately for each tranche.

The operation will enable the City to rehabilitate major streets and modernise public lighting in Gyumri. Street rehabilitation works will include renewal of asphalt and pavements, including upgrade of water drainage infrastructure. Public and street lighting refurbishment entails replacing existing high pressure mercury-based lamps with modern energy-efficient technology using LED lamps.

Transition impact

The Project will achieve greater private sector participation in road maintenance and/or street lighting provision in particular via outsourcing of maintenance to the private sector based on a multi-year contract.

The Project will aim to improve the capacity of the City’s institution responsible for road infrastructure management and traffic safety and street lighting by transferring knowledge and significantly enhancing necessary skills for road and street lighting quality monitoring, investment planning and contracting, as well as developing a road asset management system. The project and related TC support will also help the City to revise its parking strategy and related policies. A new strategy combined with an action plan and an initial pilot scheme is expected to promote the use of paid parking to manage the use of road assets and to raise local funding for road maintenance in the City.

The Project will promote economic, safety and social inclusion and will result in a better mobility, hence equal opportunities‎ for specific groups such as women.

The client

Republic of Armenia

EBRD finance

A sovereign loan of up to EUR 14.6 million to Armenia for the benefit of the City.

Total project cost

EUR 21.9 million

Environmental and social categorisation, impact, and mitigation

The project has been categorised B in accordance with the Bank’s Environmental and Social Policy 2008. The investigations identified that the future adverse impacts of the project will be site specific and can be addressed through appropriate mitigation measures. The project will have an overall positive impact through the improvement of quality of transport services, urban infrastructure and traffic flow conditions.‎ Due diligence has been undertaken by an independent consultant and included in the environmental and social analysis of the proposed project. This analysis included a review of all key Environmental Health and Safety, and Social (“EHSS”) background information and project documentation as well as meetings with local regulators and other key stakeholders.

Potential environmental impacts associated with the project are impacts to water quality, air quality, noise and vibration levels and waste management; however, the majority of these impacts are expected to be temporary and would be confined to the construction phase. The project implementation is limited to the urban area within the boundaries of the City and no sensitive ecological receptors or protected zones would be affected. In addition, it is anticipated that the project would not have significant adverse social impacts to local communities or other Project affected parties.

A Stakeholder Engagement Plan (“SEP”) has been developed for the City and the City to improve external consultation and disclosure in accordance with EBRD's requirements. An ESAP has also been developed for the City to bring the project into compliance with national regulations and EBRD's Performance Requirements (“PRs”). The ESAP, the implementation of which will be covenanted in the legal agreements, addresses the necessary improvements in the City’s Environmental and Social (“E&S”) management systems and capacity, as well as improvements in managing construction activities so as to avoid, minimise and mitigate any potential adverse E&S impacts of the project.

A preliminary road safety analysis has been conducted by independent specialists and a number of recommendations have been developed to bring the project in line with the principles of EU RSA Directive (EU directive on road safety) and also to incorporate mitigation measures for potential road safety risks. All measures have been included into the ESAP.

An associated TC has been proposed to support the City in procurement, project implementation and contract supervision, including the provision of assistance to the City in enhancing its E&S management capacity and implementation of the ESAP, SEP and the annual environmental and social reporting requirements to the Bank.

The project will be monitored in terms of its environmental and social performance and implementation of the ESAP through annual E&S reports and site visits when deemed necessary.

Non-technical summary

Technical cooperation

Pre Loan Signing:

• TC 1: Feasibility Study for the Gyumri Urban Road Rehabilitation Project includes financial, technical (including both the road improvements and the street lighting element) environmental and social due diligence, and an economic rate of return analysis of the proposed investment. The focus is on establishing the correct costing, institutional capacity building, and contracting strategies for the project’s investments. EUR 220,000, financed by the Government of Austria.

Post Loan Signing:

• TC 2: Project Implementation Support. The TC will support the Project Implementation Unit and will be split in three parts:
  • Part A for engineering design and procurement for the works contracts including preparation and evaluation of tenders and contract award,
  • Part B for construction supervision of the works contracts and
  • Part C for preparation of tender documents and procurement support for maintenance contracts covering street infrastructure and street lighting to be contracted to the private sector and City road asset management.

The estimated overall cost of the assignment is EUR 1.2 million. The break down by Tranche is detailed in the table below. The needs for Tranche A are proposed to be financed by the SSF during 2016.  For Tranches B and C, the Bank will seek funding from an international donor, but recourse to the SSF for financing may be needed in 2017 if no other resources can be identified.

	TOTAL	Tranche A	Tranche B	Tranche C
Part A	350,000	175,000	105,000	70,000
Part B	675,000	337,500	270,000	67,500
Part C	175,000	105,000	35,000	35,000
TOTAL	1,200,000	617,500	410,000	172,500

• TC 3: Feasibility Study for preparation of Tranche C (street lighting component) of the project. The estimated cost of the assignment is EUR 120,000 proposed to be financed by an international donor, the ETC Fund or the SSF. Timing: 2017.
• TC 4: Supervision and management support to street infrastructure and street lighting maintenance contracts to support and train staff from the city’s Traffic Department in the supervision and management of separate maintenance contracts for the street infrastructure and the street lighting.  The estimated cost of the assignment is EUR 240,000 proposed to be financed by an international donor, the ETC Fund or the SSF. Timing: 2017.
• TC 5: Parking Strategy and Action Plan to develop a long term parking strategy and a medium term action plan for the parking sector, including identification of a pilot parking project. The estimated cost of the assignment is EUR 160,000, proposed to be financed by the SSF during 2016.

 

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