The EBRD is providing a loan of up to EUR 15 million to the City of Kragujevac (the 'City') for long-term financing of urban transport infrastructure and procurement of waste collection trucks and bins.
The loan will be split in two tranches. Tranche 1 of EUR 10 million comprises financing of new waste collection trucks and bins of EUR 2.5 million (Component 1) and financing of road construction and refurbishment of EUR 7.5 million (Component 2). Tranche 2 will be used to finance construction of a new City bus terminal in an amount of EUR 5 million (Component 3).
ETI score: 60
The transition impact potential of the Project arises from:
Increased private sector participation ('PSP') - the new central bus terminal will be designed in a way to include commercial and retail space. The City will consider contracting a private retail company which will be responsible for leasing of the commercial space and possibly for maintaining the terminal.
Frameworks for Markets - the project will help the City and City Traffic Agency (the 'Agency') to improve management through the introduction of a Financial and Operational Performance Improvement Programme ('FOPIP') to (i) support monitoring and evaluation of the PSP contract for bus terminal; and (ii) improve the contractual arrangement for bus terminal operations and for urban bus route operators.
Skills Transfer - Operation of the bus terminal will likely be a new task for the Agency, and the FOPIP will provide substantial training for key staff in the City and Agency, enabling commercial skill transfer and improvement of operational performance, with a focus on financial planning, operational management, monitoring and evaluation of bus franchises and ticketing and fare collection methods.
Introduction of an advanced form of maintenance contracts - the Project will aim for introduction of Performance-based Management and Maintenance of Roads contract ('PMMR') for the City's road network, to allow improvement of quality of the service provided.
CITY OF KRAGUJEVAC
City of Kragujevac ('Kragujevac' or the 'City')
EBRD Finance Summary
Senior loan to the City in an amount of up to EUR 15 million
Total Project Cost
Up to EUR 19.2 million
Environmental and Social Summary
The proposed project has been categorised B in accordance with the 2014 EBRD Environmental and Social (E&S) Policy. The environmental and social due diligence (ESDD), includes an independent third party environmental and social audit to assess the Client's management capacity and capability to manage environment, health, safety and labour issues; and an analysis of the potential (future) E&S impacts and benefits of the project. The ESDD also assesses the Client's ability to carry out the Project in compliance with the Bank's Performance Requirements.
It has been confirmed that the Project will result in environmental and social benefits through improvements in the solid waste collection services in Kragujevac. The potential impacts are expected to be site specific and readily identifiable and addressed through mitigation measures. The procurement of the solid waste trucks, waste bins and containers will be compliant with current EU Health and Safety regulations, EBRD guidelines and performance requirements; and will contribute positively to an improvement in Environmental and Social conditions in the project area, provided that it is undertaken in conjunction with the successful implementation of the Environmental and Social Action Plan during the procurement and operation of the recommended equipment.
The ESDD also confirmed that the "Company has an Environmental and Social Management System ("ESMS"), and it is compliant with ISO 14001 and OHSAS 18001. The Company also prepares a summary report on environmental performance for shareholders once a year. However, it was identified that there is no environmental training provided for the personnel and there is no written HR Policy. However, all workers are provided with written information about their terms and conditions of employment. There is nominated personnel for the management of Environmental, Health and Safety (EHS) and Human Resources (HR).
A Stakeholder Engagement Plan will include a grievance mechanism for the project and the information on the environmental and social impacts and benefits of the Project. A summary of the Action Plan will be disclosed locally to stakeholders.
Technical Cooperation and Grant Financing
Pre-signingTechnical and Environmental and Social due diligence for Component 1. The estimated cost of this assignment is up to EUR 37,000.
Technical project scoping and environmental and social due diligence for Components 2 and 3; including, a review existing designs and specifications for Component 2 and scoping for Component 3 to define the concept layout of the proposed bus terminal; assessment of conditions of the two site options and costs; and, identification of private sector participation options. The estimated cost of this assignment is up to EUR 210,000.
Procurement support for Components 1 and 2, including support in the preparation of tender documents and during the tendering process. The estimated cost of this assignment is up to EUR 75,000.
Construction supervision for investments under Component 2. The estimated cost of the assignment is EUR 350,000.
Project Implementation Support for Component 3 to comprise: (i) preparation and works tendering, including the detailed design of the bus terminal, preparation of tender documents and procurement assistance, and (ii) construction supervision. The estimated cost of this assignment is up to EUR 290,000.
Financial and Operational Performance Improvement Programme (FOPIP) for Component 3 to support the City and City Traffic Agency in revising pricing policy, improving operational and accounting practices and increasing commercial opportunities. The estimated cost of this assignment is up to EUR 200,000.
Company Contact Information
+381 34 334 030
PSD last updated
03 Aug 2020
Further information regarding the EBRD’s approach to measuring transition impact is available here.
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Environmental and Social Policy (ESP)
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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 firstname.lastname@example.org. 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.
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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 email@example.com to get guidance and more information on IPAM and how to submit a request.