EBRD provides a secured loan of up to Eur 38,23 million to Vilnius public transport renewal
Ellex in Lithuania advised European Bank for Reconstruction and Development (EBRD) in providing a secured loan of up to EUR 38,23 million to the JSC “Vilniaus viešasis transportas”, a public transport company 100% owned by Vilnius city municipality. The proceeds of the financing will be used to finance the renewal of the trolleybuses fleet of the city, notably the purchase of battery/electricity-powered trolleybuses to replace the aging fleet of 159 trolleybuses currently in use.
It will be one of the most extensive renewals in Vilnius Municipality’s history. By improving the quality and reliability of trolleybuses, the project is expected to enhance the attractiveness, increase the ridership of Vilnius’ public transport, and encourage a modal shift towards low-emission, electric transport modes. The project is expected to result in reduced emissions and enhanced energy efficiency.
Ellex`s services include providing legal advice in relation to risk assessment and due diligence of the project, determining the bankability of the project, extensive and long-lasting negotiations on the restatement of public service agreement between the City and the borrower for the provision of public passenger transportation services on local routes in Vilnius City and Vilnius district, drafting project support agreement between the borrower and the City, reviewing and amending loan agreement, drafting debt service accrual account agreement and security documents.
The project was challenging because negotiations with public authorities require not only a deep knowledge of applicable laws but the careful alignment of public and private interests, making the public service contract bankable, which is not so easy to achieve having in mind various limitations for public service contracts. Ellex has also drafted and negotiated a debt service accrual account agreement to be signed between the borrower, EBRD and a local bank, in order to secure repayment of EBRD’s loan, which being a tripartite agreement is not a usual banking product in Lithuania.
The project was led by Banking and Finance practice`s partner Giedrius Stasevičius and associate partner Eglė Neverbickienė.
The fleet renewal project is part of a broader City programme to achieve sustainable mobility in Vilnius, which aims to make public transport the backbone of Vilnius by ensuring quick and safe transport within the city and increasing connectivity between the city and peripheral areas through public transport service.