Vneshekonombank and Sberbank will provide 29.2 billion rubles ($1 billion) to fund a 43-kilometer segment of the Moscow-St. Petersburg toll road, the banks announced Monday.
The North-West Concession Company, a consortium led by France's Vinci Concession, has to raise 47 billion rubles to build its 43-kilometer segment of a proposed 700-kilometer toll road between the two capitals, VEB spokeswoman Yekaterina Karasina said.
The consortium is borrowing 29.2 billion rubles for 20 years from the two state banks in equal parts, and will raise an additional 10 billion rubles by issuing government-backed infrastructure bonds. VEB chief Vladimir Dmitriyev said Monday that his bank would buy as much as 70 percent of the debt.
The consortium will rely for the rest of its funding on Russia's investment fund, which will provide 23 billion rubles for the project. Altogether, the project is slated to cost 70 billion rubles, which is up from the 60 billion rubles estimated last July.
Last year, the European Bank for Reconstruction and Development signed a memorandum of understanding to provide up to 400 million euros for the project, but it has not yet made a firm decision. "We are still studying various aspects of the project," EBRD spokesman Richard Wallis said. Dmitriyev said VEB hopes to garner the EBRD's investment commitment by October.
The segment between the 15th and 58th kilometer of the road will pass through Moscow and the Moscow region, including through the Khimki forest, a point of contention for many local residents, who have appealed repeatedly to the EBRD not to support the current plan for the road because of its negative environmental impact.
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