2016-21 – Moldova, Railways restructuring project

     

    2016-21 – Moldova, Railways restructuring project
    Rail project. Upgrade
    Technical description
    The project is intended to finance:
      • the acquisition of new multi-purpose locomotives to offer a higher level of service quality, safety and energy efficiency benefits;
      • conducting priority investments in rail infrastructure rehabilitation and related supervision services.
    The project includes the purchase of 11 diesel locomotives and the rehabilitation of 40 to 80 km of single track line. The infrastructure rehabilitation is expected to involve primarily the replacement of track and ballast within the existing corridors. It will be concentrated on the main rail corridors of the country:
      • Bender - Chisinau - Ungheni - Balti - Ocnita
      • Bender - Basarabeasca - Teulia - Giurgiulesti.

    The new locomotives will be primarily used on the same corridors.

    The Project shall also aim to support the railway restructuring reform process, through:

      • providing support to institutional reform to improve transparency and accountability, as well as financial sustainability;
      • providing support for the initial planning and implementation stages of a phased retrenchment program; and providing sustainability support by improving environmental and health and safety aspects, and applying energy efficient technologies and standards and encouraging lower emission modes to reduce energy consumption.
    Applicant/promoter/sponsor
    IS Calea Ferata din Moldova (CFM, the national railway operator)
    Investment amount
    Total project cost EUR 116.7 mln.
    EBRD investment EUR 25 mln.
    EIB investment EUR 50 mln.
    The project is expected to benefit from an investment grant provided by the Neighbourhood Investment Facility of the European Commission for the acquisition of locomotives in the amount of up to EUR 5 million.
    The EBRD will support the preparation of railway reform strategies by mobilising technical cooperation funding for consulting services, as follows:
    • Restructuring Support - EUR 650,000 (EBRD Shareholder Special Fund);
    • Assistance in preparation and implementation of tender - EUR 250,000 (Central European Initiative);
    • Capacity Building on Energy Efficiency Management - EUR 220,000 (the Czech Official Development Assistance Fund)
    • Environmental, Health and Safety Management Support and Capacity Building - EUR 73,000 (Central European Initiative);
    • Retrenchment Planning - EUR 65,000 (EBRD Shareholder Special Fund).

    An implementation of an energy management information system is expected to be co-funded through the EBRD Shareholder Special Fund.

    Implementation schedule
    2016-2021
    Status
    EIB finance contract under negotiation. ToR of the feasibility study under preparation.
    Expected impacts on transport, environment, social, other
    The project is absolutely necessary to maintain the existing railway traffic and is part of a broader programme, which also includes restructuring of the Moldovan railway sector in order to enable it to provide adequate services and to compete with other modes of transport. Main benefits include time savings for both passenger and freight services, which should prevent modal shift from rail to road and therefore contribute to a limitation of pollutants and green-house gas emissions, as well as noise reduction. Reduction in vehicle and infrastructure operating cost will lead to improvement in the financial sustainability of the national railway company.

    Environmental impacts: Environmental and social due diligence comprised a corporate environmental, health and safety (EHS) audit of CFM and an audit of CFM's Human Resources (HR) capacity, systems and current retrenchment planning. As part of the restructuring programme, the Bank is planning to provide technical cooperation support for the development of a corporate EHS system based on ISO 14001 and OHSAS 18001 standards. The Bank will also provide technical cooperation support for the development of a retrenchment plan.

    Source of Funding
    EBR; EIB
    The project is expected to benefit from an investment grant provided by the Neighborhood Investment Facility of the European Commission for the acquisition of locomotives in the amount of up to EUR 5 million. The project is expected to be co-financed with the European Investment Bank.
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