EDB to provide RUB 10 billion for the ring road around Moscow

Eurasian Development Bank (EDB) that signed in June an agreement to purchase a 25% share in the charter capital of Avtodorozhnaya Stroitelnaya Korporatsiya (Road Construction Corporation; ASK), a concessioner building Central Ring Road 3 in Moscow, a PPP project, will extend RUB 10 million for the project, a representative of EDB told Vedomosti. The loan will be for up to 16 years.

A syndicate will be set up to fulfil the project, as Sberbank, Avtodor and Gazprombank confirmed earlier to Vedomosti. The agreement between the syndicate of lenders and ASK is expected to be signed in the near future, three participants in the transaction say.

The syndicated loan will total RUB 38.5 billion, according to a person close to the transaction. Sberbank and Gazprombank refused to comment on their respective shares in the syndicate.

Previously, the project involved Gazprombank only, which intended to provide a loan of RUB 35.6 billion (plus RUB 6 billion to be invested by Avtoban and almost a half by the state). In June, the cost of the Central Ring Road grew by 4%, to RUB 313 billion: changes to the investment project were approved by the government.

Central Ring Road 3 is among the largest construction projects in the sector. It will connect M11 – the new high-speed road linking Moscow and St. Petersburg – and the M7 Volga road. The project is of significant importance to transport in that it is expected to cut the cost of freight transportation. It is also expected to form a number of large international transport corridors in Eurasia between Europe and Western China, Konstantin Limitovsky, Deputy Chairman of EDB, commented through a representative. The syndicate will be created as the most efficient and widespread form for financing large-sized projects, a representative of Gazprombank commented.

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