Srbijagas

complete

Up to €150 million senior corporate loan secured with a sovereign guarantee, for the account of EBRD. Through the proposed loan to Srbijagas the Bank has obtained the commitment of the Company to (i) pursue organisational and financial restructuring and (ii) to increase standards of transparency, corporate governance and business conduct. The Bank has also obtained the commitment of the Government of Serbia to accelerate reforms in the energy sector aimed at (i) achieving harmonisation with the relevant EU Directives, (ii) enhancing the independence of the energy regulator and (iii) supporting the unbundling of the Company’s natural gas transmission, distribution and trading activities The transition impact potential of the Project derives from: (i) supporting the ongoing process of unbundling of the company by gradually separating and auditing accounts by line of activity, creating separate management teams and, finally, legally separating transport and trade activities; (ii) demonstration effect of successful financial and operational restructuring of the Company, through improvements in financial ratios and collection rates, as well as divesting non-core activities upon an agreed timetable; and (iii) government's commitment to support the ongoing process of liberalisation of the gas sector in Serbia by passing amendments to the energy law that, among other, would increase the independence of the regulator and secure third party access to the transmission and storage infrastructure. Public Enterprise JP “Srbijagas” is engaged in natural gas transmission, distribution, storage and trade and is 100% owned by the Republic of Serbia. €150 million. €150 million. Categorised B (2008). The environmental and social due diligence on the proposed use of proceeds has not been completed to date due to the fact there is no design available for the future Underground Storage Facility (UGS), proposed for financing within the Tranche 3, and its location is yet to be confirmed. Therefore, derogation from the Environmental and Social Policy is required. To date only due diligence of Tranche 1 and, partly of Tranche 2 has been completed. An adequate completion of the due diligence is crucial for proceeding with the Tranches 2 and 3 of the Project. The due diligence conducted to date identified the need to develop and implement an environmental management system and several other environmental protection measures for the planned pipeline surveys and replacement activities which need to be implemented. Key issues associated with UGS facilities typically include air emissions from compressor stations, increased noise, vibration and dust levels during construction; possible gas leaks and availability of adequate emergency planning and response arrangements. Additional land-take will also be required and need to be handled in compliance with Performance Requirement 5. A grievance mechanism and a stakeholder engagement programme will need to be developed to ensure employees and communities are informed about the project and have a mechanism for addressing any issues of concern. While general mitigation measures with regard to the environmental and social management capacity and procedures have been identified; there will be further specific mitigation measures associated with the replacement of pipelines and construction of the future UGS facility, which can only be identified once the design documents and location of project facilities are available None.