Dnipropetrovsk Metro Construction Completion Project

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Translated version of this PSD: Ukrainian The EBRD is considering financing an extension of Metro Line I in the City of Dnipropetrovsk. The existing six-station line will be extended by four kilometres and three stations will be added in order to provide metro services into the City centre, serving areas of high urban density and land-use activity. The project will achieve important institutional and regulatory improvements by devolving ownership of the metro operating company Dnipropetrovskiy Metropolitan from the central government to the City and by introducing a public service contract to ensure the sustainability of user oriented services over the long term. Company restructuring and decentralisation of municipal services: Ownership will be transferred to the City, to achieve the decentralisation of a key infrastructure asset and service. Moreover, the Corporate Development Support Programme will provide basic tools for modern metro management, including business planning and capital investment planning, and substantial training for key staff of the Company. Framework for markets: The project will serve as an example of long term sustainable financial and organisational structure for major infrastructure assets. A key component of this will be the preparation of a public service contract (“PSC”) to establish performance-based service quality in exchange for continuing public support payments. The PSC will be a first in the City for any of its public transport operators. This work will be modelled broadly after the Ministry of Housing’s templates for PSCs in Ukraine and will build on work undertaken by the Bank with other Ukrainian cities (Lviv and Kiev) and their public transport operators. In addition, the project will enable the rationalisation of tariff setting policy and practices. Private sector involvement: The project will investigate the opportunity to develop an integrated e ticketing system, whereby a private service provider operates the new ticketing system for the entire public transport system, on a long-term basis with incentives built in to achieve a high level of reliability and functionality. Typically, the service provider is paid a portion of revenues transacted through the system, a fact which sets up a strong incentive to ensure that the system functions consistently. Energy Efficiency and Carbon Reductions: The investment in metro operations should lead to a significant modal shift away from cars and diesel buses to clean, high-capacity urban rail along the new extension of 4 km. Initial estimates by the Bank show an estimated reduction of 530 thousand tonnes of CO2 over the first 10 years of operation. The Operation will be implemented by Dnipropetrovskiy Metropolitan and its Project Implementation Unit. Consultants will provide on-going assistance to the PIU with contract monitoring, supervision and reporting requirements. A sovereign loan of €152 million to the Company, expected to be co-financed in equal proportion by an EIB loan. The total project cost is €367 million including related technical cooperation funds. The Project has been categorised level B, based on the findings of the initial environmental and social examination by independent consultants. The environmental and social due diligence is under preparation and is being developed concurrently with the preparation of the Ukrainian national Environmental Impact Assessment (OVNOS) required for the Project. Potential impacts may include alteration of the groundwater levels, disposal of construction spoil, dust, noise and vibration impacts on the nearby communities and businesses. The due diligence will need to identify the extent and duration of such impacts and assess adequacy of the proposed design and engineering solutions, and also define additional measures to mitigate such impacts. The Environmental and Social Due Diligence will also need to identify all potential stakeholders of the project, analyse the impacts of the Project on such stakeholders and propose a Stakeholder Engagement Plan, which should clearly define modality and frequency for communication of Project-related information to affected parties. The following Technical Cooperation funds are envisaged as part of this project: Pre-Signing: Post-Signing: