A loan of up to EUR 7.9 million to the City of Varna ("City" or "Varna") to finance, jointly with the European Union Structural and Investment Funds ("ESIF"), the following investments in Varna:
- Varna Integrated Urban Transport project, implemented under a grant agreement with EU Operational Programme Regional Development(2007-2013);
- A project for improving the quality of life in the City through acquisition of new trolleybuses for the public urban transport in Varna, implemented under a grant agreement with EU Operational Programme Environment (2007-2013);
- A project for rehabilitation of two flood control channels in Asparuhovo residential area, implemented under a grant agreement with the EU Solidarity Fund
The flood control channels rehabilitation component has been introduced after the tendering process for the first two investments was completed. At that stage, the City informed the Bank that it achieved savings and requested to reallocate a part of the loan proceeds to the flood control channel rehabilitation component. The flood control channels rehabilitation component will complement the objectives of the first two investments since it will protect essential road infrastructure used by public transport from the risk of floods and destruction, thus improving the urban mobility in the City.
The Project involves implementation of a package of complementary investments, which focus on the development of a modern, sustainable and safe urban transport in the third largest city in Bulgaria. The main components of the Project include:
- Introduction of a Bus Rapid Transit ("BRT") corridor to reduce travel times and increase public transport usage.
- Introduction of a system for provision of public urban transport vehicles priority at intersections along BRT corridor.
- Deployment of an electronic ticketing system on-board public transport vehicles and at bus stops.
- Deployment of a real-time passenger information system at bus stops and on-board public transport vehicles.
- Development of a public urban transport management center.
- Acquisition of new rolling stock, including 50 diesel EURO 6 buses, 20 compressed natural gas buses and 30 trolleybuses.
- Upgrade of three bus terminals and rehabilitation and modernization of a bus depot.
- Development of new cycling facilities, including cycling paths, parking facilities, cycling campaign and a bike rental scheme.
- Rehabilitation of flood control channels in Asparuhovo Residential Areas to protect its residents as well as essential road infrastructure from the negative impact of climate changes.
Improved contractual framework for markets achieved through:
Public Service Contact (PSC): An EU-compliant PSC will be developed and introduced between the City and the incumbent municipally-owned public transport operator Gradski Transport EAD. The PSC constitutes a new multi-year contractual arrangement between the City and the public transport operator. It will establish a solid framework for service delivery, cost controls, compensation levels, and regulation of a key public service. This PSC should also be adopted for any private sector bus operations, such as the regional lines.
Revised Public Transport Scheme (PTS): Assistance to the City to revise its public transport scheme with the objective to eliminate doubling lines to the BRT, introduce feeder lines to the BTR and improve the overall efficiency of the routes.
Revised parking strategy with increased private sector participation: EBRD will assist the City in designing and launching a full on-street parking scheme to be implemented according to commercial principles for short-term visitors in downtown Varna. The private sector will also be involved contractually in running the back-office payment collection and distribution system as well as SMS-based payments with mobile phone providers.
MUNICIPALITY OF VARNA
The City of Varna is the third largest municipality in Bulgaria, a major Black Sea port and a leading industrial and commercial center.
EBRD Finance Summary
A long-term loan of up to EUR 7.9 million to the City of Varna.
Total Project Cost
Total Project cost amounts to EUR 78.5 million including VAT.
Technical Cooperation and Grant Financing
The Bank will provide the following post-signing Technical Cooperation:
- Assistance to the City to complete an EU-compliant PSC for Varna - EUR 100,000.
- Assistance to the City to revise its Public transport scheme with the objective to eliminate doubling lines to the BRT, introduce feeder lines to the BTR and improve the overall efficiency of the routes i EUR 100,000.
- Assistance to the City to prepare a parking strategy, introduce blue zone, and on-street parking fare collection system, and a tender documentation and support for the design, supply and maintenance of the system to the private sector EUR 150,000.
Company Contact Information
Peycho Peychev, Deputy Mayor
43, Osmi Primorski Polk Boulevard 9000 Varna, Bulgaria
The Project involved implementation of a package of complementary investments, focusing on the development of a modern, sustainable and safe urban transport in the third largest city in Bulgaria. The operation supported the City's urban transport system reforms which aimed at providing high quality public transport services, including introduction of a Bus Rapid Transit system, replacement of obsolete and inefficient rolling stock with new, clean diesel and compressed natural gas buses and development of a cycling network and pedestrian facilities. Alongside these investments, the Project included integrated electronic ticketing and a real-time passenger information system. Initially, total project cost amounted to EUR 76 million with VAT, while after some savings achieved by the City, the amount of the project was reduced to EUR 66 million with VAT. Although the Bank's loan is fully disbursed and physical completion achieved, the project has not yet reached operational completion.
The project also ensured adherence to strict environmental, energy-efficiency and social standards. The Company has fully implemented the Environmental and Social Action Plan on time.
As a part of its transition impact, the Project contributed to improved contractual framework for markets achieved through: (i) enhanced PSC arrangements between the City and the municipally owned urban transport company; (ii) successful introduction of a Bus Rapid Transit (BRT) corridor demonstrating a new approach to the City's need for high capacity public transport solutions; and (iii) implementation of a revised parking strategy.
PSD last updated
04 Sep 2020
Further information regarding the EBRD’s approach to measuring transition impact is available here.
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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).
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