A syndicate of banks begins financing the construction of the Central Ring Road’s fourth start-up facility

31 January 2020

On 27 January 2019, the first disbursement under a syndicated loan for the construction of the fourth start-up facility of the Central Ring Road in Moscow Region was made. Financing for Yugo-Vostochnaya Magistral for a total of RUB 35.8 billion until 2036 has been provided by a syndicate of banks comprising Sberbank, Gazprombank, the Eurasian Development Bank (EDB), and VEB.RF.

Yugo-Vostochnaya Magistral is a special project vehicle established to implement the Central Ring Road 4 project by the Avtoban Group, the Russian Direct Investment Fund (RDIF), and InfraVEB. The financial sponsors for the project, in addition to the Avtoban Group, RDIF and InfraVEB, are the EDB and VEB.RF, which will jointly provide RUB 4.1 billion in subordinate (shareholder) financing for 20 or more years. In late December 2019, VEB.RF, the EDB and RDIF provided funds as part of subordinate financing (the so-called “junior tranche”), which made it possible for the senior lenders (the syndicate of banks) to begin payments under the main loan.

The concession agreement between Russian Highways (Avtodor) and Yugo-Vostochnaya Magistral was made on 2 June 2017. The Central Ring Road’s fourth project finances the construction and operation of a 96.846 km road section. The fourth section will run in the southeast area of Moscow Region, 50 km from the Moscow Ring Road, passing through Noginsk, Pavlovsky Posad, Voskresensk and Ramenskoye municipal districts, as well as through the urban districts of Elektrostal and Domodedovo.

The road will run from the M7 Volga highway to the M4 Don road. The forecast daily traffic intensity for 2030 is 40,300 vehicles. This section will correspond to Category IA, which means a highway with an estimated speed of 140 km per hour. The first phase of the project will build four traffic lanes (two in each direction).

The project also envisions the construction of 67 structures, including three pedestrian crossings at various levels, 14 bridges, two livestock crossings and one wildlife crossing, 42 overpasses, and five flyovers. The project will also build six interchanges at various levels at the intersections with the M7 Volga highway, the Moscow Small Ring Road, the Yegorevskoye highway, the M5 Ural highway, the Vostryakovo–Obraztsovo road (access road to Domodedovo Airport), and the M4 Don highway.

The Central Ring Road comprises five start-up facilities, or phases of construction, to be commissioned as separate investment projects. The third and fourth start-up facilities are being built under concession agreements made by the state-owned Russian Highways with Avtoban companies – Avtodorozhnaya Stroitelnaya Korporatsiya (Road Construction Corporation, ASK) (Central Ring Road 3) and Yugo-Vostochnaya Magistral (Central Ring Road 4). 

The Eurasian Development Bank (EDB) is an international financial institution founded by the Russian Federation and the Republic of Kazakhstan in January 2006 with the mission to facilitate the development of market economies, sustainable economic growth, and the expansion of mutual trade and other economic ties in its member states. The EDB's charter capital totals US $7 billion. The member states of the Bank are the Republic of Armenia, the Republic of Belarus, the Republic of Kazakhstan, the Kyrgyz Republic, the Russian Federation, and the Republic of Tajikistan. 

The EDB Media Centre:

Alexander Savelyev +7 (985) 765 23 59 (Moscow)          

Azima Sapargaliyeva +7 (777) 750 00 08 (Almaty)

Sergey Gorbachev +7 (916) 727 22 00 (Moscow)          

pressa@eabr.org

www.eabr.org

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