SOFIA MUNICIPALITY METRO L3 STAGE III-GREEN LOAN

An investment loan to Sofia Municipality to co-finance alongside the Recovery and Resilience Facility (RRF) the construction of the third stage of Sofia Metro Line 3. The project includes a twin-track metro line of approximately 8.6 km in length, 9 metro stations and the acquisition of new rolling stock for the metro network.

The new line will improve public transport passenger services promoting the modal shift of passengers from private road transport to public transport; thus the project is expected to reduce pollution and greenhouse gas (GHG) emissions and improve the air quality levels of the local environment.

The project concerns the construction of the third phase of Sofia Metro Line 3 consisting of 8.6 km of line, 9 new metro stations and the acquisition of new rolling stock for the metro network. The Project is expected to reduce air and noise pollution and greenhouse gas emissions ("externalities"). The Project is also expected to reduce congestion on the urban road network ("public goods") and provide more affordable mobility options that increase accessibility to employment, education and health ("imperfect competition") and will contribute to the reduction of transport costs across the urban area.

The project is part of Sofia's Sustainable Urban Mobility Plan 2019-2035 and is aligned with Bulgaria's National Development Programme 2030, which also foresees expanding the metro network of Sofia.  The project complies with the objectives set in the EIB transport Lending Policy and is aligned with the Paris Agreement, according to Annex 2 of the EIB Climate Bank Roadmap (CBR). The Project is expected to provide a substantial contribution to Climate Mitigation and Environmental Sustainability according to Annex 4 of the EIB CBR. Due to location in a transition region, the Project contributes to EIB's objective of Cohesion. The Project is therefore aligned with the EIB's Public Policy Goals of Sustainable Cities and Regions, Climate Action and Environmental Sustainability and Economic and Social Cohesion.

The EIB's contribution is very important in view of the promoter's limited access to long-term funding to support the sustainable implementation of key urban mobility infrastructure projects such as the metro. The affordable borrowing rates, longer maturities and grace periods would contribute to the alleviation of the city's budget constraints and ultimately improve the living conditions of citizens, benefiting from the project.

The project falls within in the projects listed in Annex II of the EIA Directive 2011/92/EU. During appraisal, the Bank's services will check the compliance with the requirements of the EIA Directive 2011/92/EU as amended by Directive 2014/52/EU. Additionally, and as applicable, the Bank's services will review compliance with the SEA Directive 2001/42/EC and the relevant Habitats and Birds Directives (92/43/EEC and 2009/147/EC, respectively).

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