Financial documents for the Central Ring Road’s fourth start-up facility are signed
Moscow, 13 December 2019. On 12 December 2019, financial documents for the construction of the Central Ring Road’s fourth start-up facility in Moscow Region were signed. The parties confirmed the provision by a syndicate of banks comprising Gazprombank, Sberbank, the Eurasian Development Bank (EDB), and VEB.RF of RUB 35.8 billion to Yugo-Vostochnaya Magistral for 17 years.
Yugo-Vostochnaya Magistral is a special project vehicle established by the Avtoban Group and the Russian Direct Investment Fund (RDIF) to implement the fourth Central Ring Road project. The financial sponsors for the project, in addition to the Avtoban Group and RDIF, are the EDB, VEB.RF, and InfraVEB, which will provide RUB 4.1 billion in subordinate financing for 20 years.
Konstantin Pesotsky, Senior Managing Director for Structured Credit Products at Sberbank: “It is a great honour for us to take part in financing major projects to develop the country’s transport infrastructure. The commissioning of the Central Ring Road may foster Russia’s economic growth as this road will significantly speed up the movement of people and commodities in Moscow Region.”
Pavel Brusser, Executive Vice President and Head of Infrastructure and PPP Department at Gazprombank: “The participation of the syndicate of Russia’s largest banks, international financial institutions, and a direct investment fund will ensure that financing will be provided as necessary to catch with high construction speeds. The experience of the syndicate’s participants in implementing a similar project – the Central Ring Road’s third start-up facility – will help to efficiently manage project risks of this concession project.”
Timur Abdullakhanov, Managing Director and Head of Transport and Infrastructure at the EDB: “The project is in the transport infrastructure sector that is of strategic importance to the EDB and one of its priorities. It will help to develop transboundary shipments within the Europe–Western China international corridor. The Central Ring Road’s fourth section connects to the Europe–Western China roads at the intersection with the M7 highway running towards the border with Kazakhstan. The project will not only add impetus to Moscow’s economic integration with adjacent regions and Russia’s broader transport system but will also expand the transit potential of the EDB member economies in Eurasia in the longer term.”
Nikolay Tsekhomsky, First Deputy Chairman and Member of the Management Board at VEB.RF: “Large infrastructure projects are among VEB.RF’s priorities. As regards this transaction, VEB.RF will take part in the syndicate of senior lenders and will provide a portion of the subordinated debt as part of project sponsorship. VEB.RF’s participation has helped to finalise the financing scheme under the concession agreement, which is a critical condition for smooth project financing.”
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 96.5 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 an intersection with the M7 Volga highway (kilometre zero of the A113 Central Ring Road) to an intersection with the M4 Don road. The daily traffic intensity is forecast to reach 40,300 vehicles in 2030. The estimated speed of traffic is 140 km per hour. The first phase of the project will build four traffic lanes (two in each direction).
This will include the construction of 17 bridges and wildlife crossings, 40 crossovers, and nine ramps. The project will also construct six interchanges at the intersections with the M7 Volga, MMK and Yegorevskoye highways, the MMK–Chechevilovo–MBK road, the М5 Ural highway, the Vostryakovo–Obraztsovo road (access road to Domodedovo Airport), and the M4 Don highway.
The Central Ring Road is Moscow Region’s critical arterial road. It comprises five start-up facilities, or sections, commissioned as separate investment projects. The third and fourth sections of the Central Ring Road are being constructed under concession agreements made by Avtodor with Avtodorozhnaya Stroitelnaya Korporatsiya (Road Construction Corporation, ASK) (Central Ring Road 3) and Yugo-Vostochnaya Magistral (Central Ring Road 4).
Additional Information:
The Eurasian Development Bank (EDB) is an international financial institution founded by Russia and 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)