VTB Capital, OJSC Gazprombank, State Corporation Bank for Development and Foreign Economic Affairs (Vnesheconombank), European Bank for Reconstruction and Development (EBRD) and Eurasian Development Bank (EDB) signed a memorandum with LLC Northern Capital Highway on the basic principles and conditions of financing the project of building the Western High Speed Diameter toll road.
In accordance with the memorandum, the banks are developing the conditions of credit for the borrower – LLC Northern Capital Highway. The memorandum defines the main parameters of the preliminary project financing by the creditor banks. These loan resources will be used to finance the construction of the central section of the Western High Speed Diameter road.
The project financing will include money from the Investment Fund of the Russian Federation.
The project will be implemented on the basis of public-private partnership (PPP) and requires a PPP agreement between the Government of Saint-Petersburg, OJSC Western High Speed Diameter and LLC Northern Capital Highway. LLC Northern Capital Highway is represented by a consortium of investors consisting of OJSC Bank VTB and OJSC Gazprombank. This consortium has won the tender for the right to sign an agreement in accordance with the legislation of St. Petersburg.
Oleg Pankratov, Head of Infrastructure Capital & Project Finance at VTB Capital, Chairman of the Board of “Northern Capital Gateway” said: “Raising a loan is a significant step in implementing a program for one of the Russia's biggest infrastructure projects. The participation of such well-known banks in the building of the Western High Speed Diameter indicates the high social value of the project.”
According to the PPP agreement, LLC Northern Capital Highway will build the central part of the Western High Speed Diameter (WHSD) highway, carry out the operation and maintenance of the central, northern and southern sections of WHSD, and collect tolls on these sections. These sections will be leased by LLC Northern Capital Highway for 30 years.
Construction of the southern and northern sections of WHSD has been undertaken by OJSC Western High Speed Diameter, a 100% subsidiary of Saint-Petersburg. The southern part of the road has been open for traffic since the end of 2010, with the northern section expected to be open by the end of 2012. This project is included in the Federal Target Programme Development of Transport System of Russia (2010–2015). The completion of the project will significantly reduce rush hour congestion in the transport arteries of the city center, and facilitate high-speed access to major highways. The project will help develop the transport infrastructure of the city including improved links to Big port Saint Petersburg and the New Sea Passenger port on Vasilevsky Island.
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