Istanbul Metro Project II

Location:

Turkey

Project number:

49825

Business sector:

Municipal and environmental infrastructure

Notice type:

State

Environmental category:

B

Approval date:

13 Mar 2019

Status:

Disbursing

PSD disclosed:

10 Jan 2019

As permitted by paragraph 2.6 of Section III of the Access to Information Policy, disclosure of this PSD was deferred in accordance with paragraph 1.4.4 of the Directive on Access to Information.

Project Description

A syndicated A/B loan of up to EUR 97.5 million was provided to Istanbul Metropolitan Municipality ("IMM" or the "City") to co-finance the first tranche of the construction of 13 kilometres of the new Umraniye-Atasehir-Goztepe Metro line (the "Project"), including 11 stations in August 2019.

EBRD is now contemplating to provide an extension loan of EUR 75 million to co-finance the second tranche of the Project and to ensure its completion.

Project Objectives

The Project is essential for further expansion of public transport infrastructure in Istanbul and will connect Umraniye, Atasehir and Kadikoy districts of the Asian side of Istanbul. It will also link up the underground Marmaray commuter rail line and the Kadikoy-Kartal and Uskudar-Sancaktepe metro lines. The new line will provide safer and more reliable transport services for 350,000 passengers daily. The Project is also expected to significantly reduce high traffic congestion and noise pollution. It will also help achieve a shift to a more environmentally friendly transport in Turkey's largest city.

Transition Impact

ETI score: 74

The Project's transition impact is derived from promoting youth and gender inclusion as well as Green Economy Transition (GET).

Youth inclusion: The Project explores opening up of work-based learning opportunities for young people at the level of contractors during the construction phase. The City will establish a youth employment programme with the support of the EBRD and in collaboration with the City's learning and vocational training centre (ISMEK). In addition, the City (through ISMEK) will contribute to the EBRD's on-going policy engagements in Turkey, by participating in the public private steering group established under the programme, to support the development of improved training and skills standards.

Gender inclusion: The Project promotes women's participation in a male-dominated sector and occupation. The Company is expected to adopt significant improvements in its Human Resources and other policies in line with a gender action plan. It will also endeavour to join a recognised national equal opportunities accreditation scheme (i.e. KAGIDER FEM). The Project will also explore ways to support women's access to services, through a potential Technical Cooperation (TC), which will provide gender-responsive transport services and will help the institutional strengthening of the municipality from the gender equality perspective.  

Green Economy Transition: The Project will promote sustainable transport by providing an alternative solution to the use of more polluting buses, minibuses, taxis and private vehicles. Given its integration into a much larger network, the new line is expected to result in a shift from high- to low-carbon modes of transportation. It will also contribute to improved air quality through the reduction of nitrogen oxides and particulate matters in addition to climate change mitigation benefits.

The proposed loan extension will enhance the transition qualities of the Project, as IMM will (i) develop a Green City Action Plan ("GCAP") to prioritise local environmental challenges, putting forward a plan of targeted investment and policy actions to address them; and (ii) commit to increase the number of young people benefitting from certifiable training and employment opportunities.

Client Information

MUNICIPALITY OF ISTANBUL

Istanbul is the largest city in Turkey with a population of around 15.5 million inhabitants. The City is a public legal entity established and governed under municipal laws of Turkey. IMM provides municipal services in Istanbul. It will finance and implement the project. Istanbul Metro Company, which is fully owned by IMM, will operate the proposed metro line.

EBRD Finance Summary

EUR 77,500,000.00

 A/B loan of up to EUR 97.5 million to the City, with a syndicated EUR 20 million of the loan under the Bank's A/B loan structure signed in August 2019.

A senior loan of EUR 75 million is considered to be extended to the Project in 2022 to ensure its completion.

Total Project Cost

EUR 360,700,000.00

EUR 410.6 million

Environmental and Social Summary

The Project has been categorised B under Environmental and Social ("E&S") Policy (2019). As there is no change to the scope of the Board approved project, the conclusions of the original Environmental and Social Due Diligence ("ESDD") which was carried out in 2018 and the resulting Environmental and Social Action Plan ("ESAP") still applies to this loan extension.

 The Project is expected to contribute to the abatement of traffic related air emissions of 41,300 tCO2-eq, 84.5 tNOx, 15.2 tHC and 1.3 tPM per year (starting in 2023), as well as contribute to the reduction of other air pollutants, noise, road accidents and congestion by shifting approximately 35,000 passengers to the metro from private cars and buses during normal operating hours and 43,000 at the peak travel hours for both directions.

ESDD for the loan extension has been carried out through the review of the regularly submitted Annual E&S Reports including ESAP implementation, which showed that the project implementation is continuing generally in compliance with national health, safety, environment and labour requirements and with satisfactory implementation of the ESAP. The Project has not resulted in any permanent physical resettlement; however, 20 complaints have been raised related to potential damage to buildings due to vibration impacts since the start of construction works. In two of these buildings, after detailed geotechnical studies,  were subject to immediate building enhancement works. No significant labour and health and safety issues have been raised by workers or trade unions against the Project during the project implementation. No court cases or significant CSO activities have been reported during project implementation. The Project has not resulted in any significant impact on biodiversity, encroached on protected areas or cultural heritage sites. Excavation works have continued to be observed by experts from the Archaeology Museum Directorate and there have been no chance finds during the past construction works. The high number of noise related grievances particularly in areas close to the residential settings (i.e. Goztepe station) indicates the need for further improvement in noise control measures and further strengthening of Contractor management capacity and monitoring mechanisms.

The ESAP will be revised to be fully aligned with the 2019 ESP including management of GBVH risks to communities and to workforce; and to strengthen  noise and dust control measures particularly in populated areas. The Project will be monitored through regular E&S monitoring visits during construction and annual E&S reports.

Technical Cooperation and Grant Financing

Pre-signing: Technical, Financial, Environmental and Social Due Diligence carried out for the project (EUR 150,000) via the Infrastructure Project Preparation Facility (IPPF). A review of the existing procurement process for the Project (EUR 50,000) was also carried and is to be financed by EBRD Shareholder Special Fund (SSF).

Post-signing:  Lender's supervision (EUR 150,000) from SSF, as well as gender-sensitive service provision (up to EUR 300,000) financed by the multi-donor funded Gender Advisory Services Framework. This assignment is envisaged to include (a) development of gender-responsive transport services and institutional strengthening of the municipality from the gender equality perspective and (b) promotion of equal opportunities and practices in the company's workforce. The City will also commit to the development of a GCAP to prioritise local environmental challenges, and put forward a plan of targeted investment and policy actions to address them. The GCAP assignment is estimated to cost EUR 1 million and will be funded by the TaiwanBusiness-EBRD Cooperation Fund.

Company Contact Information

Deniz Demirbas
deniz.demirbas@ibb.gov.tr
+902124494000
www.ibb.istanbul
Osmaniye Mahallesi Çobançeşme Koşuyolu Bulvarı No:5 34568 Bakırköy/İSTANBUL

PSD last updated

14 Apr 2022

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

For state-sector projects, visit EBRD Procurement:

Tel: +44 20 7338 6794
Email: procurement@ebrd.com

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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