Igor Finogenov: Development banks can promote increases in investments in infrastructure
St. Petersburg, 23 May 2014. A development bank can play three functions in an infrastructure project: a source of “long money,” a consortium leader, and a source of technical expertise to ensure high quality of the project. Igor Finogenov, Chairman of the Management Board at Eurasian Development Bank (EDB), stated this today at the panel session Public—Private Partnerships: The Imperative to Execute at the St. Petersburg International Economic Forum.
Igor Finogenov believes the second role of the banks to be particularly important, since the level of risks in major infrastructure projects makes it difficult even for the largest investors to lead such consortia. “This role can be played by public participants in PPP projects, however it is easier for development banks to create a consortium to finance a large infrastructure project,” he continued. “In addition, international development banks, because of their status, can cover a number of specific non-commercial risks, which cannot be accepted by other members of consortiums, either private or public.”
The head of EDB told about the Bank’s participation in two major infrastructure projects: the upgrade of Pulkovo Airport and the construction of the Western High Speed Diameter toll road. He pointed out that the most important part of these projects was their thorough and lengthy preparation, which made it possible to correctly forecast the demand and allocate all project risks.
Additional Information
Eurasian Development Bank 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. EDB’s charter capital exceeds US $1.5 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. Read more at https://www.eabr.org.