<div><h2>Project Description</h2><p></p><p>The provision of a senior loan of up to € 30 million to  Zeljezniiki Prevoz Crne Gore a.d. (ZPCG), the passenger train operator in Montenegro. The loan will be fully guaranteed by the State of Montenegro (the Guarantor) and used to finance the purchase 4-car Electro-motor unit (EMU) sets to be used for operations across the railway network of Montenegro. The new rolling stock will replace the old, energy inefficient loco-hauled train sets currently in operation. </p><p></p><h2>Project Objectives</h2><p></p><p>ZPCG needs to acquire 4-car EMUs to improve the quality and regularity of services. The acquisition of new rolling stock has been identified by the Government of Montenegro as the key priority for the developement of the railway services in the country. The new rolling stock will replace the old, energy inefficient locomotive-hauled train sets currently in operation.</p><p></p><h2>Transition Impact</h2><p>ETI score: 66</p><p style="margin-top: -13px;"></p><p><strong>Well Governed</strong> <strong>(primary)</strong> through the Company's and the Guarantor's (where applicable) undertaking to: (i) implement a corporate governance action plan and (ii) sign a public service contract based on the international best market practices;</p><p><strong>Green (secondary)</strong> through the  renewal of the rolling stock fleet resulting in estimated average savings of 18,145 tonnes of CO2 over the evaluation period from 2026 to 2037, which represents emission savings at the level of 53 per cent. The Project will be 100 per cent GET eligible.</p><p></p><h2>Client Information</h2><p>RAILWAYS PASSENGER COMPANY OF THE REPUBLIC OF MONTENEGRO</p><p style="margin-top: -13px;"></p><p>Zeljezniiki Prevoz Crne Gore a.d. Podgorica, or Railways Passenger Company of Montenegro, is a majority state-owned company and is the sole passenger train operator in Montenegro. The state owns 90.79 per cent of the company shares, while the remainder is owned by individual investors (4.58 per cent), investment funds (4.55 per cent) and other (0.08 per cent). In 2022, the Company reported € 10.3 million of revenues and EBITDA of € 3.4 million.  </p><p></p><h2>EBRD Finance Summary</h2><p>										EUR 30,000,000.00									</p><p style="margin-top: -13px;"></p><p>A senior loan of up to € 30 million will finance the purchase of 4-car EMU sets to be used for operations throughout the whole railway network of Montenegro.</p><p></p><h2>Total Project Cost</h2><p>										EUR 30,700,000.00									</p><p style="margin-top: -13px;"></p><p>The loan will be accompanied by the technical assistance deployed for (i) project implementation support, (ii) revisions of the Public Service Contract and (iii) enhancement of the Company's corporate governance standards and practies. </p><p></p><h2>Additionality</h2><p></p><p>The EBRD loan offers a tenor that is above the market average, ensures that the company complies with the Bank's environmental and social policies and Procurement Policies and Rules. </p><p> </p><p></p><h2>Environmental and Social Summary</h2><p></p><p>Categorised B (ESP 2019). The Environmental and Social Due Diligence ("ESDD") for the Project has been undertaken internally and included an environmental and social ("E&amp;S") assessment of the Project, review of the current operations, as well as the E&amp;S management systems and the capacity of ZPCG as it relates to rail operations.</p><p>ESDD was carried out by means of questionnaires and a review of previous annual E&amp;S reports submitted to the Bank over the past several years. Other relevant documents were also reviewed including the ISO certifications, the recent annual report on railway transport safety and other labour related documentation. Due to the time that had elapsed since the initial ESDD, further information was requested to confirm any E&amp;S related updates within ZPCG operations. It is estimated that the Project will generate average savings of 18,145 tonnes of CO2 over the evaluation period from 2026 to 2037.</p><p>Previous annual E&amp;S reporting by ZPCG has been satisfactory and ZPCG has well established Human Resources policies. A new collective agreement has been effective from August 2023 . ZPCG complies with national legislation related to labour and working conditions which are aligned with PR2. Some updates to existing labour arrangements are needed which includes the preparation of an updated retrenchment plan and further development of the worker grievance mechanism. The Bank will require both these documents to be submitted for review prior to any future retrenchment.</p><p>ZPCG has a certified integrated management system (IMS) including ISO 14001 Environmental Management and ISO 45001 Occupational Health and Safety ("OHS") which has been certified since 2016. The last independent audit was carried out in 2020 and included the migration from the OHSAS 18001 to ISO 45001. Annual E&amp;S reports confirmed regular inspections take place annually by the relevant labour and environmental authorities, with no significant issues raised. The existing policy document for the IMS is available on ZPCG website and starting from September 2021 includes also ISO 45001:2018. ZPCG evaluates contractors E&amp;S arrangements prior to selection and appointment although further development on contractor monitoring is needed to confirm implementation. ZPCG has an employee OHS rulebook which is also made available on their website and for operational safety, an formal safety management system ("SMS") has been implemented and is audited annually.</p><p>ZPCG has an existing Stakeholder Engagement Plan ("SEP") developed under the previous EBRD project and this requires a review and update to reflect changes since its original development. ZPCG will also develop arrangements on Energy Efficiency ("EE"), which include establishing an EE team, establish performance indicators and objectives and produce annual report on energy consumption.</p><p>The above requirements have been included in the Environmental and Social Action Plan ("ESAP") which has been developed and has been agreed with the ZPCG. The Bank will continue to monitor ZPCG activities through annual E&amp;S monitoring reports and site visits if necessary.</p><p></p><h2>Technical Cooperation and Grant Financing</h2><p></p><p><em>Pre-signing</em></p><ul><li><strong> TC 1: Technical Due Diligence, </strong>with aprimary objective to establish the overall technical assessment of the project according to recognised international standards (note: this assignment also supported the Railways Maintenance Equipment Renewal Project (OPID 51806)). The cost of this assignment was EUR 55,000 and was supported by the SSF.</li><li><strong>TC 2: Economic Due Diligence</strong>, with aprimary objective to establish the overall economic assessment of the project according to recognised international standards (note: this assignment also supported the Railways Maintenance Equipment Renewal Project (OPID 51806)). The cost of this assignment was EUR 45,000 and was supported by the SSF.</li></ul><p> <em>Post-signing</em></p><ul><li><strong>TC 3</strong><strong>: Project Implementation Support, </strong>in particular, project preparation, preparation of the tender documents (including technical specifications), contract administration, financial control, project management and reporting. The estimated cost of the assignment is EUR 300,000 and is expected to be funded by an international donor or the SSF. </li><li><strong>TC 4: Procurement Support, </strong>to assist the Client with the procurement of the PIU support consultant, on-the-job training for the preparation of the procurement documents, workshops on the Bank's PP&amp;R and best procurement practices. The estimated cost of the assignment is EUR 25,000 and is expected to be funded by an international donor or the SSF.</li><li><strong><strong>TC 5: Revisions of the Public Service Contract, </strong></strong>to assist in amendment of the PSC aligning it with the EU regulations and best international practice while enabling the implementation of the new Law on Railway Transport that is to be adopted in 2024 in the field of public service obligation. The estimated cost of this assignment is up to EUR 90,000 to be funded by the EU IPA, under the EU reform Facility.</li><li><strong>TC 6: Enhancements of the Company's corporate governance standards and practices </strong>through the adoption of the corporate governance action plan ("CGAP"). The estimated cost of this assignment is up to EUR 150,000 to be funded by the EU IPA, under the EU reform Facility. </li></ul><p></p><h2>Company Contact Information</h2><p>Djordje Kaludjerovic<br/>djordje.kaludjerovic@zpcg.me<br/>+382 63 228 089<br/>zpcg.me<br/>Trg Golootockih zrtava br.1381 000 Podgorica            Montenegro<br/></p><h2>PSD last updated</h2><p>17 Apr 2024</p><div id="docsLinks" style=""><h2>Related material</h2><ul class="relMat"><li><a href="https://www.ebrd.com/work-with-us/projects/psd-translation/55258/1395319855738/Montenegrin_Railways_Passenger_Trains_(Montenegrin).pdf?blobnocache=true" title="Download document">Translation: Montenegrin Railways Passenger Trains (Montenegrin)</a> <i class="glyphicon glyphicon-download-alt"></i><br/><small>Type: PDF, Published: 19.04.2024, Language: Montenegrin</small></li></ul></div><script type="text/javascript">						var projFinderService = '/project-finder-json?1=1';						var projectId = "55258";					</script><h2>	Understanding Transition</h2><p>	Further information regarding the EBRD’s approach to measuring transition impact is available <a href="https://www.ebrd.com/what-we-do/economic-research-and-data/transition-impact.html">here</a>.</p><h2>	Business opportunities</h2><p>	For business opportunities or procurement, contact the client company.</p><p>	For business opportunities with EBRD (not related to procurement) contact:</p><p>	Tel: +44 20 7338 7168<br/>	Email: <a href="mailto:projectenquiries@ebrd.com">projectenquiries@ebrd.com</a></p><p>	For state-sector projects, visit <a href="https://www.ebrd.com/pages/workingwithus/procurement.shtml">EBRD Procurement</a>:<br/><br/>	Tel: +44 20 7338 6794<br/>	Email: <a href="mailto:procurement@ebrd.com">procurement@ebrd.com</a></p><h2>	General enquiries</h2><p>	Specific enquiries can be made using the <a href="https://www.ebrd.com/eform/information-request">EBRD Enquiries form</a>.</p><h2>	Environmental and Social Policy (ESP)</h2><p>	The <a href="https://www.ebrd.com/news/publications/policies/environmental-and-social-policy-esp.html">ESP</a> and the associated Performance Requirements (PRs) set out the ways in which the EBRD implements its commitment to promoting “environmentally sound and sustainable development”.  The ESP and the PRs include specific provisions for clients to comply with the applicable requirements of national laws on public information and consultation as well as to establish a grievance mechanism to receive and facilitate resolution of stakeholders’ concerns and grievances, in particular, about environmental and social performance of the client and the project. Proportionate to the nature and scale of a project’s environmental and social risks and impacts, the EBRD additionally requires its clients to disclose information, as appropriate, about the risks and impacts arising from projects or to undertake meaningful consultation with stakeholders and consider and respond to their feedback.</p><p>	More information on the EBRD’s practices in this regard is set out in the <a href="https://www.ebrd.com/news/publications/policies/environmental-and-social-policy-esp.html">ESP</a>.</p><h2>	Integrity and Compliance</h2><p>	The EBRD's Office of the Chief Compliance Officer (OCCO) promotes good governance and ensures that the highest standards of integrity are applied to all activities of the Bank in accordance with international best practice. Integrity due diligence is conducted on all Bank clients to ensure that projects do not present unacceptable integrity or reputational risks to the Bank. The Bank believes that identifying and resolving issues at the project assessment approval stages is the most effective means of ensuring the integrity of Bank transactions. OCCO plays a key role in these protective efforts, and also helps to monitor integrity risks in projects post-investment.</p><p>	OCCO is also responsible for investigating allegations of fraud, corruption and misconduct in EBRD-financed projects. Anyone, both within or outside the Bank, who suspects fraud or corruption should submit a written report to the Chief Compliance Officer by email to <a href="mailto:compliance@ebrd.com">compliance@ebrd.com</a>. All matters reported will be handled by OCCO for follow-up. All reports, including anonymous ones, will be reviewed. Reports can be made in any language of the Bank or of the Bank's countries of operation. The information provided must be made in good faith.</p><h2>	Access to Information Policy (AIP)</h2><p>	The AIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations following its entry into force on 1 January 2020. Please visit the <a href="https://www.ebrd.com/what-we-do/strategies-and-policies/public-information-policy.html">Access to Information Policy</a> page to find out what information is available from the EBRD website.</p><p>	Specific requests for information can be made using the <a href="https://www.ebrd.com/eform/information-request">EBRD Enquiries form</a>.</p><h2>	Independent Project Accountability Mechanism (IPAM)</h2><p>	If efforts to address environmental, social or public disclosure concerns with the Client or the Bank are unsuccessful (e.g. through the Client’s Project-level grievance mechanism or through direct engagement with Bank management), individuals and organisations may seek to address their concerns through the EBRD’s Independent Project Accountability Mechanism (IPAM).</p><p>	IPAM independently reviews Project issues that are believed to have caused (or to be likely to cause) harm. The purpose of the Mechanism is: to support dialogue between Project stakeholders to resolve environmental, social and public disclosure issues; to determine whether the Bank has complied with its <a href="https://www.ebrd.com/news/publications/policies/environmental-and-social-policy-esp.html">Environmental and Social Policy</a> or Project-specific provisions of its <a href="https://www.ebrd.com/what-we-do/strategies-and-policies/access-to-information-policy.html">Access to Information Policy</a>; and where applicable, to address any existing non-compliance with these policies, while preventing future non-compliance by the Bank.</p><p>	Please visit the <a href="https://www.ebrd.com/project-finance/independent-project-accountability-mechanism.html">Independent Project Accountability Mechanism webpage</a> to find out more about IPAM and its mandate; how to <a href="https://www.ebrd.com/eform/IPAM/Request_form">submit a Request</a> for review; or contact IPAM  via email <a href="mailto:ipam@ebrd.com">ipam@ebrd.com</a> to get guidance and more information on IPAM and how to submit a request.</p><p>	 </p></div>

Montenegrin Railways Passenger Trains

The provision of a senior loan of up to EUR 30 million to  Zeljezniiki Prevoz Crne Gore a.d. ZPCG, the passenger train operator in Montenegro. The loan will be fully guaranteed by the State of Montenegro the Guarantor and used to finance the purchase 4-car Electro-motor unit EMU sets to be used for operations across the railway network of Montenegro. The new rolling stock will replace the old, energy inefficient loco-hauled train sets currently in operation. ZPCG needs to acquire 4-car EMUs to improve the quality and regularity of services. The acquisition of new rolling stock has been identified by the Government of Montenegro as the key priority for the developement of the railway services in the country. The new rolling stock will replace the old, energy inefficient locomotive-hauled train sets currently in operation.ETI score: 66 through the Company's and the Guarantor's where applicable undertaking to: i implement a corporate governance action plan and ii sign a public service contract based on the international best market practices; through the  renewal of the rolling stock fleet resulting in estimated average savings of 18,145 tonnes of CO2 over the evaluation period from 2026 to 2037, which represents emission savings at the level of 53 per cent. The Project will be 100 per cent GET eligible.RAILWAYS PASSENGER COMPANY OF THE REPUBLIC OF MONTENEGROZeljezniiki Prevoz Crne Gore a.d. Podgorica, or Railways Passenger Company of Montenegro, is a majority state-owned company and is the sole passenger train operator in Montenegro. The state owns 90.79 per cent of the company shares, while the remainder is owned by individual investors 4.58 per cent, investment funds 4.55 per cent and other 0.08 per cent. In 2022, the Company reported EUR 10.3 million of revenues and EBITDA of EUR 3.4 million.  EUR 30,000,000.00A senior loan of up to EUR 30 million will finance the purchase of 4-car EMU sets to be used for operations throughout the whole railway network of Montenegro.EUR 30,700,000.00The loan will be accompanied by the technical assistance deployed for i project implementation support, ii revisions of the Public Service Contract and iii enhancement of the Company's corporate governance standards and practies. The EBRD loan offers a tenor that is above the market average, ensures that the company complies with the Bank's environmental and social policies and Procurement Policies and Rules.  Categorised B ESP 2019. The Environmental and Social Due Diligence ESDD for the Project has been undertaken internally and included an environmental and social ES assessment of the Project, review of the current operations, as well as the ES management systems and the capacity of ZPCG as it relates to rail operations.ESDD was carried out by means of questionnaires and a review of previous annual ES reports submitted to the Bank over the past several years. Other relevant documents were also reviewed including the ISO certifications, the recent annual report on railway transport safety and other labour related documentation. Due to the time that had elapsed since the initial ESDD, further information was requested to confirm any ES related updates within ZPCG operations. It is estimated that the Project will generate average savings of 18,145 tonnes of CO2 over the evaluation period from 2026 to 2037.Previous annual ES reporting by ZPCG has been satisfactory and ZPCG has well established Human Resources policies. A new collective agreement has been effective from August 2023 . ZPCG complies with national legislation related to labour and working conditions which are aligned with PR2. Some updates to existing labour arrangements are needed which includes the preparation of an updated retrenchment plan and further development of the worker grievance mechanism. The Bank will require both these documents to be submitted for review prior to any future retrenchment.ZPCG has a certified integrated management system IMS including ISO 14001 Environmental Management and ISO 45001 Occupational Health and Safety OHS which has been certified since 2016. The last independent audit was carried out in 2020 and included the migration from the OHSAS 18001 to ISO 45001. Annual ES reports confirmed regular inspections take place annually by the relevant labour and environmental authorities, with no significant issues raised. The existing policy document for the IMS is available on ZPCG website and starting from September 2021 includes also ISO 45001:2018. ZPCG evaluates contractors ES arrangements prior to selection and appointment although further development on contractor monitoring is needed to confirm implementation. ZPCG has an employee OHS rulebook which is also made available on their website and for operational safety, an formal safety management system SMS has been implemented and is audited annually.ZPCG has an existing Stakeholder Engagement Plan SEP developed under the previous EBRD project and this requires a review and update to reflect changes since its original development. ZPCG will also develop arrangements on Energy Efficiency EE, which include establishing an EE team, establish performance indicators and objectives and produce annual report on energy consumption.The above requirements have been included in the Environmental and Social Action Plan ESAP which has been developed and has been agreed with the ZPCG. The Bank will continue to monitor ZPCG activities through annual ES monitoring reports and site visits if necessary.Pre-signingwith aprimary objective to establish the overall technical assessment of the project according to recognised international standards note: this assignment also supported the Railways Maintenance Equipment Renewal Project OPID 51806. The cost of this assignment was EUR 55,000 and was supported by the SSF., with aprimary objective to establish the overall economic assessment of the project according to recognised international standards note: this assignment also supported the Railways Maintenance Equipment Renewal Project OPID 51806. The cost of this assignment was EUR 45,000 and was supported by the SSF. Post-signingin particular, project preparation, preparation of the tender documents including technical specifications, contract administration, financial control, project management and reporting. The estimated cost of the assignment is EUR 300,000 and is expected to be funded by an international donor or the SSF. to assist the Client with the procurement of the PIU support consultant, on-the-job training for the preparation of the procurement documents, workshops on the Bank's PPR and best procurement practices. The estimated cost of the assignment is EUR 25,000 and is expected to be funded by an international donor or the SSF.to assist in amendment of the PSC aligning it with the EU regulations and best international practice while enabling the implementation of the new Law on Railway Transport that is to be adopted in 2024 in the field of public service obligation. The estimated cost of this assignment is up to EUR 90,000 to be funded by the EU IPA, under the EU reform Facility.through the adoption of the corporate governance action plan CGAP. The estimated cost of this assignment is up to EUR 150,000 to be funded by the EU IPA, under the EU reform Facility. Djordje Kaludjerovicdjordje.kaludjeroviczpcg.me+382 63 228 089zpcg.meTrg Golootockih zrtava br.1381 000 Podgorica Montenegro17 Apr 2024Translation: Montenegrin Railways Passenger Trains Montenegrin Type: PDF, Published: 19.04.2024, Language: MontenegrinFurther information regarding the EBRD's approach to measuring transition impact is available here.For business opportunities or procurement, contact the client company.For business opportunities with EBRD not related to procurement contact:Tel: +44 20 7338 7168Email: projectenquiriesebrd.comFor state-sector projects, visit EBRD Procurement:Tel: +44 20 7338 6794Email: procurementebrd.comSpecific enquiries can be made using the EBRD Enquiries form.The ESP and the associated Performance Requirements PRs set out the ways in which the EBRD implements its commitment to promoting "environmentally sound and sustainable development".  The ESP and the PRs include specific provisions for clients to comply with the applicable requirements of national laws on public information and consultation as well as to establish a grievance mechanism to receive and facilitate resolution of stakeholders' concerns and grievances, in particular, about environmental and social performance of the client and the project. Proportionate to the nature and scale of a project's environmental and social risks and impacts, the EBRD additionally requires its clients to disclose information, as appropriate, about the risks and impacts arising from projects or to undertake meaningful consultation with stakeholders and consider and respond to their feedback.More information on the EBRD's practices in this regard is set out in the ESP.The EBRD's Office of the Chief Compliance Officer OCCO promotes good governance and ensures that the highest standards of integrity are applied to all activities of the Bank in accordance with international best practice. Integrity due diligence is conducted on all Bank clients to ensure that projects do not present unacceptable integrity or reputational risks to the Bank. The Bank believes that identifying and resolving issues at the project assessment approval stages is the most effective means of ensuring the integrity of Bank transactions. OCCO plays a key role in these protective efforts, and also helps to monitor integrity risks in projects post-investment.OCCO is also responsible for investigating allegations of fraud, corruption and misconduct in EBRD-financed projects. Anyone, both within or outside the Bank, who suspects fraud or corruption should submit a written report to the Chief Compliance Officer by email to complianceebrd.com. All matters reported will be handled by OCCO for follow-up. All reports, including anonymous ones, will be reviewed. Reports can be made in any language of the Bank or of the Bank's countries of operation. The information provided must be made in good faith.The AIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations following its entry into force on 1 January 2020. Please visit the Access to Information Policy page to find out what information is available from the EBRD website.Specific requests for information can be made using the EBRD Enquiries form.If efforts to address environmental, social or public disclosure concerns with the Client or the Bank are unsuccessful e.g. through the Client's Project-level grievance mechanism or through direct engagement with Bank management, individuals and organisations may seek to address their concerns through the EBRD's Independent Project Accountability Mechanism IPAM.IPAM independently reviews Project issues that are believed to have caused or to be likely to cause harm. The purpose of the Mechanism is: to support dialogue between Project stakeholders to resolve environmental, social and public disclosure issues; to determine whether the Bank has complied with its Environmental and Social Policy or Project-specific provisions of its Access to Information Policy; and where applicable, to address any existing non-compliance with these policies, while preventing future non-compliance by the Bank.Please visit the Independent Project Accountability Mechanism webpage to find out more about IPAM and its mandate; how to submit a Request for review; or contact IPAM  via email ipamebrd.com to get guidance and more information on IPAM and how to submit a request.

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