Category A project supported: Morava Corridor Motorway, Serbia

1. Project description

UK export finance (UKEF) agreed to provide support to the Ministry of Finance of Serbia and the Ministry of Construction, Transport and Infrastructure of Serbia and the “Corridors of Serbia” for the development of the Morava Corridor Highway in Serbia. The construction consortium (referred to as “BEJV”) is a joint venture between Bechtel Corporation (Bechtel) and Enka İnşaat ve Sanayi A.Ş. (Enka) on a design and build basis. Bechtel is the exporter. The Corridors of Serbia oversee the construction phase and the “Roads of Serbia” will be responsible for the operation and maintenance of the highway.

The Morava Corridor Motorway will be a 112 km, 30 m wide, two-lane toll motorway, located approximately 200 km south of Belgrade in a low-level floodplain along the Morava River western. The Government of Serbia sees the development of the highway as essential for the construction of the economic corridor to the industrial city of Kruševac, connecting it to the important regional commercial centers of Sarajevo, Bosnia and Herzegovina and the port city of Bar, in Montenegro. .

The motorway has a nominal speed of 130 km / h. It will have parking lots and rest areas and toll platforms for toll collection and access control. It will also feature above-ground structures such as interchanges, bridges, culverts, viaducts and underpasses. A telecommunications corridor will also be built along the route; this will help to manage traffic through various traffic control and toll systems. The motorway will be equipped with lighting, markings, signage, suitable fences and safety barriers. Temporary facilities will be used for construction and will include quarries and borrow pits, worker camps, storage areas, crushers, concrete and asphalt plants and access roads. .

The project area is prone to flooding and therefore the project will include river regulation works along the Morava River to help protect the highway, surrounding settlements and existing assets (e.g. roads and bridges) against flooding. The work will also stabilize the route of the river and control river erosion. The river regulation works are scattered along a 138 km stretch of the West Morava River and will include the protection of the banks, meandering “cuts” (straightened and channeled sections of the river) and the reconstruction of the dikes. existing.

The project does not include any associated installation[footnote 1].

2. Project sector

The project is in the civil construction sector.

The project is being developed by Corridors of Serbia, who are leading the design, planning, commissioning and construction supervision of all Serbian traffic infrastructure projects. BEJV is the construction contractor, who will undertake the detailed design and construction of the highway. The Jaroslav Cerni Institute for Water Resources Development (JCWI) and the Serbian Public Water Management Company (PWMC Srbijavode) are responsible for the design of the river regulation works, after which BEJV is responsible for their construction. Roads of Serbia will be responsible for the operation and maintenance of the highway. PWMC Srbijavode will be responsible for the maintenance of the river regulation works.

4. British exporters

Bechtel Company

5. Bank of Export Credit Agent

JP Morgan

6. UK Export Finance support amount

The main value of UKEF the aid amounts to around £ 363 million.

seven. OECD Common Approaches and Equator Principles

UKEF classified the project as Category A, i.e. it has potentially important environmental, social and human rights (ESHR) in accordance with the definition of the OECD Common Approaches to Officially Supported Export Credits and Environmental and Social Due Diligence (the “OECD Common Approaches”) and the Principles of Ecuador (2020).

As required by the OECD Common Approaches, UKEF disclosed his potential involvement in the project before committing to our support. A notification was posted on the UKEF on December 9, 2020, which provided a description of the project, a point of contact for reporting interested parties to environmental and social information, and links to the environmental impact assessment. No requests were received by UKEF or the point of contact following this notification.

8. Environmental, social and human rights standards

Linked to the project ESHR documentation has been reviewed to align with the 2012 International Finance Corporation (IFC) Performance Standards (PS) on Environmental and Social Sustainability and Environment, Health and Safety of the World Bank Group (EHS) Guidelines. Applicable IFC PS and World Bank Group EHS The guidelines were as follows:

  • PS1: Assessment and management of environmental and social risks and impacts
  • PS2: Work and working conditions
  • PS3: Resource efficiency and pollution prevention
  • PS4: Community health, safety and security
  • SP5: Land acquisition and involuntary resettlement
  • PS6: Conservation of biodiversity and sustainable management of living natural resources
  • PS8: Cultural heritage
  • World Bank Group General EHS Guidelines (2007)
  • World Bank Group EHS Guidelines for Toll Roads (2007)
  • World Bank Group EHS Guidelines for the extraction of construction materials (2007)

9. Nature of ESHR impacts

Examining the potential ESHR the risks and impacts took into account the following impacts, receptors and problems during the construction and operation phases of the Project:

  • air emissions and climate change
  • noise and vibrations
  • soil quality
  • waste, including hazardous waste
  • Wastewater
  • biodiversity
  • land acquisition and impacts on livelihoods
  • management of subcontractors and third-party suppliers
  • grievance mechanisms
  • occupational and community health and safety
  • emergency planning and response
  • cumulative impacts
  • worker well-being
  • cultural heritage
  • visual impacts
  • community engagement

ten. Assessment of ESHR impacts

A review was undertaken in accordance with the requirements of the OECD Common Approaches and the Equator Principles to identify the ESHR risks and impacts of the project and how these would be effectively managed.

The exam included:

  • Documentary review of project documentation by an independent environmental and social consultant (IESC): environmental and social impact study, environmental and social management plans
  • Follow-up meetings and interviews with the relevant representatives of the project

The results of this review formed the basis for assessing the project’s alignment with relevant international standards and recommendations for future compliance and follow-up.

11. Climate change considerations

UKEF taken into account the direct (Scope 1 and 2) and indirect (Scope 3) greenhouse gas potential of the Project (GHG) emissions and effects of climate change factors on the project. Total operational emissions from Scopes 1 and 2 of the project are expected to be approximately 30,935 tonnes of CO2e per year, which exceeds the relevant quantification and reporting thresholds set by international standards. The emissions of Operational Scope 3 will come mainly from vehicles using the motorway. Most of the traffic is expected to be diverted from existing roads, but the highway will also be able to accommodate new traffic. These additional emissions are considered to be in line with the economic development of Serbia. The highway is constructed in a flood zone and therefore the project includes river regulation works to minimize the effects of flooding on the road.

12. Decision

Various actions have been agreed between the project developers, operators and parties involved in the funding, which are necessary to ensure the continued alignment of the project with international standards. Following the agreement of these commitments, it was concluded that the project should meet relevant international standards throughout the project cycle. UKEF has therefore decided to support the supply of capital goods and services by UK exporters to the Project.

A condition of support is that the project will be subject to ESHR followed by a IESC, to ensure that the project complies with relevant international standards throughout the duration of the support.

UK export financing

November 2021