Izmir Ferries Project

repaying

Translated version of this PSD: Turkish The EBRD is considering extending a loan of up to EUR 33 million to Izmir Metropolitan Municipality (‘Izmir’ or the ‘City’). The proceeds will be used for the acquisition of three vehicle ferries, construction of new ferry wharves, and the construction of a repair facility (the ‘Project’). The new ferries will be fuel efficient and environmentally friendly. New wharves will make it safe and easy for passengers and vehicles to embark and disembark. The project will allow Izmir to increase the use of sea transport in its integrated public transport system – a cleaner and faster alternative to travelling by car on congested roads. The Project is expected to result in improved operational and financial conditions for the Izmir Ferry Company (‘Izdeniz’) by virtue of decreased operational costs per kilometre, increased patronage levels, and an increase in the retail and catering usage of the wharves. Targets to improve financial performance, organisational efficiency, and customer relations will be developed and set out in a Public Service Contract between the City and Izdeniz. The Project is also expected to bring economic benefits by reducing street traffic congestion and air pollution by encouraging sea transportation. The City of Izmir will be the borrower of the proposed loan. Izdeniz will be the operator of the ferries and the associated infrastructure to be financed. Up to EUR 33 million for the supply and construction of vehicle ferries, wharves and repair facility. The total project includes both vehicle and passenger ferries and associated infrastructure. The total project cost of EUR 159 million is expected to be financed by the EBRD (EUR 33 million), Agence Francaise de Developpement (EUR 45 million), ING Bank (EUR 33 million) and a City budget contribution (EUR 48 million). Taxes, duties and technical co-operation support are not included in this estimate. The project has been categorised B. The project is expected to result in site-specific impacts which can be readily identified and addressed through mitigation measures. The project is expected to significantly improve the safety of the ferries in Izmir. The existing ferries are mostly beyond their useful life and not compliant with applicable national environmental laws and regulations and international (including EU, IMO, MARPOL and SOLAS) maritime safety and environment regulations and standards. The Project will replace most of the existing fleet. The new vessels will be compliant with national and international standards. The environmental and social due diligence (ESDD) for the project will comprise of a review of the management systems of Izdeniz; audit of the existing Izdeniz facilities; and an assessment of the potential E&S impacts of the proposed Project. As part of the management system review compliance to SOLAS requirement of implementation of a safety management system in compliance with the International Management Code for the Safe Operation of Ships and for Pollution Prevention (the ISM Code) will be covered. A risk based review of the shipyard, where the new vessels will be built, will also be carried out as part of the ESDD. Based on the recommendations of the due diligence an Environmental and Social Action Plan (ESAP) will need to be prepared for the project. The ESAP will need to be structured to bring the existing facilities and operations into full compliance with national and EU environmental standards and to address any identified high risk issues within the area of influence of the Project. This PSD will be updated once the E&S due diligence is completed to summarise the outcomes. inancial, procurement and environmental and social due diligence is being carried out for the proposed project. This technical co-operation will be funded from the EBRD’s internal resources. In the post signing stage two technical co-operation assignments are foreseen: (1) Project Implementation Support Services: comprehensive support for engineering, design, procurement, and supervision of delivery of the vehicle ferries and completion of the wharves and repair facility; (2) Corporate Advisory Services: assistance to the City and Izdeniz to (i) update the existing business plan; (ii) assistance to prepare financial, environmental, customer service, environmental and social indicators; and (iii) assist the City and Izdeniz to prepare a Public Service Contract.