Belgrade Bus Renewal Programme

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Translated version of this PSD: Serbian The EBRD is considering providing a senior loan of up to €65 million to Gradsko Saobracajno Preduzece Beograd (“GSP”) for the modernisation of part of its bus fleet. The project would include the purchase of 280 low-floor articulated (18 metre) buses and 120 Compressed Natural Gas (“CNG”) single (12 meter) buses. The Bank’s loan will part-finance GSP’s bus modernisation programme, which is expected to be co-financed by the City of Belgrade, GSP, and/or other commercial bank loans. The sustainability goals of the project are to increase energy efficiency of urban transport systems by achieving the following physical indicators: 1) reduction in CO2 (by an estimated 35,000 tonnes of CO2 per year); and 2) the maintenance of public transport mode share in Belgrade at a minimum of 55 per cent, despite a continued rise in private car ownership. The project forms part of the Bank’s Integrated Approach, which calls for an increase in “the capacity and standards of public transport services as an alternative to car usage and to provide an overall balanced approach to mobility”. The transition impact of this specific project will be achieved through: 1. The successful restructuring of a public transport company. 2. Improved Framework and Regulatory Approach to the Public Service Contract. 3. Demonstration of New Ways of Finance through the introduction of Carbon Emission Monetisation. Gradsko Saobracajno Preduzece Beograd A senior loan of €65 million to GSP to be co-financed with the City of Belgrade, the Company, and/or other commercial banks (as either B-lenders or co-financiers), supported by a Municipal Support Guarantee (“MSA”) from the City of Belgrade. Total project costs are estimated at €130.5 million. Categorised B. Environmental and social due diligence entailed an audit of GSP and an appraisal of the new buses by independent consultants, and included a review of corporate policies and procedures and visits to several GSP sites and facilities. The conclusion of this work is that the modernisation of the bus fleet in Belgrade is expected to improve customer service, increase fuel efficiency and reduce GHG emissions. The new buses will meet Euro V environmental standards and will have lower CO2 emissions by around 21 per cent for the CNG buses and 5 per cent for the articulated low-floor buses compared with the existing fleet. Both types will lower particulate emissions by more than 90 per cent. The low-floor buses will also increase mobility for disabled people. The environmental and social audit found that GSP is operating with a reasonable degree of compliance with EBRD Performance Requirements. Specific issues that need to be addressed include improvements to occupational health and safety management, waste water discharges and indoor air quality within the maintenance depot. A draft Environmental and Social Action Plan (ESAP) has been developed to address these non-compliances and this will need to be agreed with the client prior to EBRD Board approval for this project. GSP’s labour policies and procedure are in line with EBRD requirements. There is a negotiated Collective Agreement, active Trades Unions and a grievance mechanism that allows employees to raise disputes and complaints. The client is undertaking a programme of redundancies and will be required to develop and implement a retrenchment plan, in line with PR2 and best practice. This retrenchment plan will include a justification for the planned job losses, the timescale, details of consultation with workers, criteria for selecting people and support for retraining and re-employment. EBRD’s social consultants have prepared a draft Terms of Reference for the development of the full retrenchment plan and this will need to be agreed with the client. Implementation of the Plan will be a requirement of the ESAP. Pre-signing Post-signing