IFC as implementing entity of CTF is expected to provide up to EUR 13 million in the form of a senior loan as a blended concessional finance co-investment to support modernization of the City’s municipal transport system and improve the quality of transit services. With blended finance, the City will be able to access long-term financing at affordable rates, without a sovereign guarantee. The level of concessionality (i.e., “subsidy”) provided by the blended concessional finance co-investment is estimated to be up to 3% of the total Project cost of up to EUR 104.5 million. This estimate is based on the difference between (i) a “reference price” (either a market price, if available; the price calculated using IFC’s pricing model, which comprises three main elements: risk, cost and profit; or a negotiated price) and (ii) the “concessional price” being charged by the blended concessional finance co-investment. The project is part of an open access approach with the objective to provide scaled-up financing to contribute to the demonstration, deployment, and transfer of low-carbon technologies with a significant potential for long-term GHG emission savings and allows eligible municipal entities accessing IFC financing to be supported in a similar manner with concessional funding from CTF. IFC considered the use of blended finance to potentially support other cities in Ukraine seeking to invest in sustainable urban infrastructure. Further details and historical information on estimated subsidy levels in IFC’s blended finance portfolio can be found at: www.ifc.org/blendedfinance. As is the case with all IFC blended concessional finance co-investments, this Project has been assessed against the Enhanced Blended Concessional Finance Principles for DFI Private Sector Operations adopted by IFC and more than 20 other DFIs in 2017. Further information on the Enhanced Principles and IFC’s blended finance approach and governance can also be found at: www.ifc.org/blendedfinance.

23.16 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	23.16
Equity

* These investment figures are indicative

The main project outcome is improved user access and quality of Lviv's public transport system. The project will also address barriers to improve access of women to a safe public transport. The new efficient trolleybuses fleet, combined with renovations on catenary lines and route optimization, will contribute reduce CO2 emissions of Lviv's urban transport. At the market level, the project will open access of municipal infrastructure to local currency debt capital markets and enhance transport system wide resilience.

Financial additionality - financing structure: Long-term and non-sovereign guaranteed financing, which is not available to sub-national entities from commercial banks in Ukraine, at terms offered by IFC. Sub-sovereign entities in Ukraine, like Lviv and LET, are constrained in accessing finance from commercial banks, despite the recent fiscal decentralization reforms enabling greater fiscal autonomy and the ability to borrow. Non-financial additionality - Knowledge, innovation and capacity building: IFC will leverage its broad experience in the urban transport sector and provide advisory services to i) build LET's capacity to reduce risks associated with the selection and implementation of the trolleybuses with in-motion charging batteries, ii) developing a long term deployment plan for the trolleybus fleet with phased implementation and clear objectives; and iii) improve financial sustainability of Lviv's public transportation system and LET, and iv) implement reporting and grievance mechanisms aimed at reducing GBV in public transport.

Please refer to the related Environmental and Social Review Summary (ESRS) document for this project.

Please refer to the Environmental and Social Action Plan (ESAP) tab in the related Environmental and Social Review Summary (ESRS) document for this project.