- Reforming the City-Company Relationship via a new Public Service Contract (the PSC): The PSC will define the scope of services provided by the Kaunas Bus Company and set the level for service payments by the city for the services purchased. The service payment will replace the existing system of subsidies and provide incentives for the Kaunas Bus Company to improve its financial and operational performance.
- Restructuring of Public Transport System: The Bank will provide assistance to reform the regulation and management of the public transport system by: (i) making recommendations to optimise the roles of the various modes of public transportation; (ii) implementing a route-tendering regime that encourages competition; and (iii) making recommendations for effective regulation to improve safety and pollution.
- Demonstration effect: This would be the first transaction in which the Bank would lend directly to a municipal transport company without a full sovereign or municipal guarantee.
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