BUCHAREST SUSTAINABLE URBAN INFRASTRUCTURE

The project includes investments in the public transport (PT) and district heating (DH) networks as follows: rehabilitation of approximately 50 kms of tram tracks including platforms and the related contact network, tram acquisition, depot modernisation and rehabilitation of the hot water transmission pipelines by replacing approx. 106 km channel length of pipes.

The project is part of a wider programme of transport and district heating investments carried out by the Municipality of Bucharest to modernise and increase the performance of existing urban infrastructure and benefits from EU co-financing. The loan will contribute to improving quality, reliability, safety and accessibility of the tram system and increase the energy efficiency of the Bucharest district heating system as well as the level of service provided to households.

The Project in Bucharest, Romania, concerns investments in the public transport (PT) and district heating (DH) networks as follows: rehabilitation of approximately 50 kms of tram tracks including platforms and the related contact network, tram acquisition, depot modernisation and rehabilitation of the hot water transmission pipelines by replacing approx. 106 km channel length of pipes.

The Project complies with the EIB Transport and Energy Lending Policies, is aligned with the Paris Agreement (Annex 2 of the EIB CBR) and provides a substantial contribution to Climate Mitigation and Environmental Sustainability (Annex 4 of the EIB CBR).

Investments will contribute to sustainable urban transport, security of energy supply and climate change mitigation. The Project addresses market failures by reducing negative "externalities", pollution and GHG emissions, generating positive "externalities" and higher energy savings for households, improving the efficiency and level of service of the public transport and district heating networks and optimising the use of "public goods" through time and resource savings, and security of energy supply.

Investments will increase speed, reliability, comfort and safety for tram passengers and reduce maintenance costs for the operator. Investments will support model shift from private cars and increase accessibility and affordability.

The refurbishment of the district heating network will reduce heat and water losses and negative "externalities", and gas consumption resulting in less natural gas demand. The Economic Rate of Return (ERR) was rated excellent. In addition, the compensation in the form of subsidies will be reduced over 25 years period.

The EIB via JASPERS has supported the Promoter to develop the district heating component of the project and also provided advice at the early stages of project development for the public transport components. The EIB involvement, through financing in addition to the technical advice, will provide to Bucharest Municipality the necessary resources to co-finance its priority investments in transport and district heating sectors alongside EU funds and will contribute to the acceleration of the Project. The EIB financing through long loan tenors and advantageous financial conditions will have a significant positive impact on the budgetary resources of Bucharest Municipality also benefitting the citizens living in the municipality.

The promoter's environmental management capacity to apply the relevant EU Directives will be further verified during appraisal, particularly with regard to EU EIA Directive 2011/92/EU amended by 2014/52/EU, EU SEA Directive 2001/42/EC, EU Habitats Directive 92/43/EEC, EU Birds Directive 2009/147/EC and Water Framework Directive.

The Bank will require the promoter to ensure that contracts for implementation of the project have been and will be tendered in accordance with EU procurement legislation, 2014/25/EU or 2014/24/EU where applicable as well as Directive 92/13/EEC or Directive 89/665/EEC as interpreted by the Court of Justice of the EU, with publication of tender notices in the EU Official Journal, as and where required.