UKSATSE Air Navigation System Modernisation

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Translated version of this PSD: Ukrainian The Bank is considering providing a loan to UkSATSE, the Ukrainian air navigation services provider, to finance the technological update of its equipment and operations to comply with the standards of service as required by European industry regulators. The transition impact of this transaction is derived from its in-built support for adoption of European industry norms in terms of regulation, operational practice and service provision within the air navigation sector in Ukraine, allowing it to operate on a transparent and commercially viable basis. The challenges facing both the Company and the Regulator in this process are substantial and require constant and on-going effort in terms of the national regulation and policy review to achieve harmonisation with European industry practices. UkSATSE – the air navigation services provider of Ukraine. A loan of up to EUR 45 million, with the European Investment Bank (EIB) considering potential parallel financing of a similar size. Up to EUR 90 million. Screening Categories The project was categorised “B” by European Bank for Reconstruction and Development (EBRD), which means that an environmental and social analysis was required by the Bank, in accordance with the 2008 Environmental and Social Policy and Performance Requirements. The project has some environmental and social impacts which can be readily addressed through mitigation measures and an action plan. Environmental and Social Issues and Mitigation The client completed Human Resources (HR) Management and Environmental, and Social Questionnaires, and these have been reviewed by EBRD staff . The EBRD staff also undertook a site visit to verify the environmental and social issues and any necessary mitigation measures in September 2011. The due diligence showed that the project does not involve significant environmental and social impacts as well as the client has adequate environmental and social risk management capacities. The company is expected to be accredited of ISO 14001 by the end of 2011. The company's HR management is in line with EBRD PR2 and adheres to Europe Safety Regulation Requirements No5 Air Traffic Management Services' Personnel. Single Sky Europe as a whole is expected to reduce circuitous routings, sub-optimal flight profiles and congestion-related holding patters. This will result in reducing fuel bills and CO2 emissions. UKSATSE's participation in Single Sky Europe will contribute to these. The Bank will monitor the project's environmental and social performance through a review of an annual environmental and social report provided by the client and site visit if deemed necessary Envisaged technical cooperation to be sought includes assistance to both the Ukrainian air navigation services provider and air navigation services regulator in complying with the European, SES II requirements.