The EBRD is considering providing a sovereign loan of up to EUR 75 million to the Government of Moldova to co-finance the rehabilitation of main road sections in Moldova. The purpose of the project is to help reverse the deterioration of the road network in Moldova and to ensure key road links are properly maintained to facilitate economic growth and regional integration.
The project will contribute to transition in the following ways:
- Enhancement of procurement standards and supervisory procedures through the preparation and implementation of new procurement policies and rules for the State Road Administration (“SRA”).
- Reform of the routine maintenance system for roads.
- Enhancement of road sector financing and the Road Fund’s institutional capacity.
- Expansion of the private sector, through award of all periodic maintenance contracts based on competitive bidding.
The loan will be made to the Government of Moldova. The Ministry of Transport and Road Industry (“MTRI”) will implement the Project on behalf of the Government, through the SRA, the agency responsible for executing road investment, maintenance and safety measures.
Sovereign loan of up to EUR 75 million to be provided in three tranches. The Project will be co-financed by the European Investment Bank and a concessionary co-financier yet to be identified.
EUR 183 million.
Screening Category & Justification
Phase 1 of the project involves only rehabilitation of existing road sections, with no changes of alignment or road widening, therefore has been categorised as B. The project categorisation has also been confirmed by the consultants. Phase 2 and 3 will need to be categorised separately, but are also likely to involve only rehabilitation of roads, however the specifics of these projects are not known yet.
Due diligence carried out and outcomes
A two-stage environmental and social appraisal is being carried out for the overall investment project. For the first stage, a corridor-level EIA and SIA was carried out as part of the M3 Road Feasibility Study. Second stage involves a more detailed assessment of each Phase once the sections are selected.
The sections for Phase 1 have now been selected and a detailed environmental and social analysis for Phase 1 has been carried out by independent consultants.
A review of the corridor level EIA and SIA identified a number of gaps, related to borrow areas and quarry sites; assessment of the potential impacts of the proposed flood bund in Chirsova; details of drainage and its impacts on watercourses; mapping for protected areas; and cumulative impacts. These gaps were addressed during the EBRD due diligence and necessary mitigation measures were included in the Environmental and Social Action Plan (ESAP).
The overall conclusion of the due diligence is that the potential impacts of the Phase 1 can be addressed through the implementation of the mitigation measures that are identified.
The management review by consultants has concluded that the State Road Authority (SRA) has the capacity to establish adequate mechanisms to manage and monitor implementation of a road rehabilitation project. Industry good practice techniques are well established and the SRA have previous experience of implementing internationally funded road rehabilitation schemes. A number of action points to improve performance for this project are included in the ESAP.
For Phase 2 and Phase 3, a similar approach to Phase 1 will be taken for the due diligence, i.e., detailed E&S assessments of the selected road sections will be carried out and separate ESAPs will be developed for each phase.
Summary of Environmental and Social Action Plan (ESAP)
The main actions defined in the ESAP to improve the performance of the project can be summarised as below:
- A desk based assessment of the possible ground contamination/past pollution risks and a contaminated land watching brief instigated during construction works;
- Development of reporting and emergency response procedures;
- Approval of the designs for the bund and associated drainage by the appropriate authorities. Such approval should consider both the safe design of the bund and for pollution control and flood risk to receiving water courses;
- Detailed assessment of future construction works in accordance with EBRD PR requirements;
- Performance of appropriate due diligence of contractors human resources policies and insert clauses into civil works contracts to ensure compliance of their activities with the EBRD PR2;
- Development of a retrenchment policy by SRA prior to the start of retrenchment proceedings;
- Implementation of appropriate grievance mechanisms by Contractors and monitoring and reporting of grievances to the SRA;
- Regular air quality monitoring at settlements close to mobile asphalt plants;
- Fencing of work sites to prevent unauthorised entrance by members of the public;
- Sourcing of aggregates from appropriately licensed facilities;
- Integration of an anti-trafficking management programme with the HIV / AIDS awareness programme to be included in the civil works contract;
- Further cultural heritage assessments for any sites to be excavated and development of a chance find procedure.
Information Disclosure & Stakeholder Engagement
Throughout the lifecycle of the project, the project team will need to provide ongoing information to and receive feedback from identified stakeholders, in particular on the effectiveness of the implementation of the measures in the ESAP and construction ESMP. Information should be disclosed at key stages of the project cycle and regular reports should be published to external stakeholders (e.g. as part of annual reports).
The SRA have agreed to implement and adopt the Stakeholder Engagement Plan which has been proposed as part of the EBRD due diligence and continue disclosing information in a number of media, including newspaper adverts, SRA website and handouts around the villages.
Project implementation support (for all three phases), including the development of procurement manuals and implementation support for local contracts procurement. EUR 3 million.
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