IMPROVEMENT ROAD NETWORKS SOLIDARITY LANES FL

The project consists of: (i) emergency repairs, rehabilitation and reconstruction of destroyed/damaged transport infrastructure (roads, bridges, artificial structures and traffic organization equipment), (ii) development of necessary/missing road transport and logistics infrastructure throughout Ukraine, including in the zones de-occupied from Russian army and border crossings, and (iii) financing projects under the Connecting Europe Facility (CEF) in the road sector (Solidarity lanes).

The project will also improve the efficiency of Ukraine EU cross-border road transport arrangements and is in line with the TEN-T Guidelines by referring to Projects of common interest, Neighbouring country, Cross-border sections, Bottlenecks, Interoperability, Intelligent Transport System (ITS). The project is important to ensure cross-border connections with the EU and more generally to restore road network connectivity through targeted emergency reconstruction of strategic road sections damaged by the war. The project will also increase security standards along the EU external border and improve road capacity for dual use.

The project is aimed at improving and restoring connectivity on the national road network and cooperation with Ukraine aimed at increasing of resilience and support reforms, humanitarian facilitating of cross-border trade by improving infrastructure, connecting Ukraine and neighbouring EU countries (Solidarity Lanes). The project is fully in line with the main areas of EU support and assistance, economic cooperation and access to the single market. The project is fully aligned with the new policy objectives for beyond 2020 in the Eastern Partnership, and in particular with the first priority "Working together for resilient, sustainable and integrated economies" focusing on investment in infrastructure (in transport, energy and digital). The project is fully aligned with EIB support to Ukraine strategy as it will allow restoring basic services, rehabilitating key infrastructure and creating an enabling environment for population and economic recovery.The project is also aligned with the objectives for beyond 2020 in Eastern Partnership: particularly with the first priority on investment in infrastructure. The project is fully aligned with EU assistance to Ukraine in dealing with issues arising from the war.

EIB additionality stems also from a) timely provision of significant funding with concessional interest rates combined with a long maturity which are not readily available given the current market conditions b) mobilisation of technical assistance (JASPERS) and investment grants from the CEF and c) a significant involvement by EIB during project's appraisal, monitoring and implementation.

The compliance of the project to the EIB Environmental and Social standards will be verified at scheme allocation. Given the extraordinary circumstances in which some of the schemes under the project are to be implemented (e.g. providing for a connectivity through emergency replacement of damaged bridges and rehabilitation of damaged road sections), there may be a need to apply certain adjustments to the standard procedure on a case by case basis.

Procurement will follow the EIB Guide to Procurement procedure, by selecting the relevant procurement procedure according to the circumstances in Ukraine at a time of scheme allocation. Full application of the EIB Guide to Procurement cannot currently be guaranteed and a necessary derogation is likely to be required. The possibility of application of the national procurement system (Prozorro) may be an option.

The proposed loan is eligible for the comprehensive European Fund for Sustainable Development Plus ("EFSD+") guarantee cover granted by the European Union to the Bank under the EU's Neighbourhood, Development and International Cooperation Instrument ("NDICI") "Global Europe". The loan falls under the NDICI Investment Window 1 ("IW1") dedicated to sovereign and non-commercial sub-sovereign borrowers, subject to confirmation of eligibility by the European Commission before the approval of the AFS and the financing amount available under the country ceiling dedicated to Ukraine at the time of the signature. As the Bank is currently evaluating other financial instruments to be used for the purpose of projects in Ukraine (subject to the approval of relevant governing bodies).