Kyzylorda CNG Bus

Location:

Kazakhstan

Project number:

45264

Business sector:

Municipal and environmental infrastructure

Notice type:

Public

Environmental category:

B

Approval date:

26 Nov 2013

Status:

Repaying

PSD disclosed:

19 Sep 2013

Translated version of this PSD: Russian

Project Description

EBRD is considering assisting the City of Kyzylorda (the “City”) in reforming the regulatory framework for bus service provision. The project will focus on the improvement of public bus service standards in the city through the establishment of a new tender regime, which will equalise the operating environment revenue-wise for all operators. This will be achieved through the signing of Public Service Contracts (“PSC”) and the development of the integrated ticketing system.

EBRD will consider a senior loan to a newly established municipally-owned public transport dispatch and operating company, LLP Avtobusnyi Park Kyzylorda (the “Company”), of up to USD 18.8 million (or KZT equivalent) under a project support agreement with the SPK “Baikonur” and the Oblast of Kyzylorda.

The financing is envisaged to be used for the acquisition of up to 100 new compressed natural gas (“CNG”) buses to be operated under the PSC. The Company will be responsible for organising bus service provision, introduction and operation of a formal fare collection system as well as fleet and depot. Additionally, the Project aims at setting standards for service quality in public transport.

Transition Impact

The project will establish a sound and transparent institutional framework for tendering bus services to the market with a view to introducing effective competition between urban transport operators (both public and private). The Bank’s project will create solid financial and operational conditions for the operators and will facilitate much-needed efficiency improvements in the provision of public transport services. It will also promote long-term, non-recourse financing of the public transport investments, and introduce incentive-based PSCs.

The project will introduce CNG buses, which will significantly reduce CO2 emissions and will significantly improve urban transport services in terms of increasing reliability of service, providing more capacity and integrating different urban transport modes, operators and ticketing.

The transaction will introduce appropriate corporate governance standards with the Company. It will set up a new concept of accountability for quality and quantity of the public transport services as well as formalise the system of institutional, accounting and managerial control in the sector.

The Client

Avtobusnyi Park Kyzylorda, a municipal dispatch and operating company, wholly owned by the Akimat of Kyzylorda Oblast.

EBRD Finance

A senior loan of up to USD 18.8 million (or KZT equivalent).

Project Cost

Up to USD 26.8 million.

Environmental Impact

Categorised B in accordance with EBRD's 2008 Environmental and Social Policy. The modernisation of the bus fleet through introduction of low floor CNG buses compliant with Euro IV-VI standard will have mainly positive environmental and social impacts. The project will contribute to improving air quality in the City of Kyzylorda, reduce passenger congestion and improve overall quality and efficiency of urban transportation.

The environmental and social due diligence is on-going and will include a review of the Company's environmental and social management systems, facilities and operations, as well as envisaged priority investments for compliance with the Bank’s Performance Requirements (PRs). The Environmental and Social Action Plan (ESAP) will be developed to address any environmental and social issues identified during the due diligence to achieve and maintain compliance with the Bank's PRs within a reasonable time-frame. The Company will also develop a Stakeholder Engagement Plan, including a grievance mechanism, and will release information on environmental and social performance and a summary of the agreed Action Plan to stakeholders. This PSD will be updated when the results of due diligence are known.

Technical Cooperation

The following technical co-operation (“TC”) assignments are a part of this project:

Pre Loan Signing

  • TC 1: Technical, Legal and Environmental and Social Due Diligence (EUR 235,000, financed by the Government of Spain EBRD-ICEX Technical Cooperation Fund).

Post Loan Signing

  • TC 2: Procurement Support to assist the Company to procure new CNG buses according to EBRD’s PP&R, as well support and monitor the construction and procurement of a new Depot, a new CNG filling station and a new ticketing system. (up to EUR 200,000)
  • TC 3: Regulatory Framework Improvement Support to develop the Public Transport Strategy for the City to optimize the route network; to assist with the development and adoption of the tender strategy and full tender documentation package for bus services and an improved regulatory framework based on multi-year PSCs with bus operators; and to provide assistance to the drivers to consolidate and establish sizeable companies for biding in the tender. (up to EUR 250,000).
  • TC 4: Institutional Capacity Building Programme for the Company including, the provision of assistance in the development of the organizations structure and functions, as well as financial management and accounting systems, support in organizing some functions such as technical maintenance, etc. to be outsourced to the private sector, and to also include additional support on the implementation of the formal ticketing system. (up to EUR 200,000)
 

Business opportunities

For business opportunities or procurement, contact the client company.

For state-sector projects, visit EBRD Procurement: Tel: +44 20 7338 6794
Email: procurement@ebrd.com

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Text of the PIP

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