EBRD in Russian airport PPP
By Steve Skinner29 April 2010
The European Bank for Reconstruction and Development (EBRD) is to lend € 100 million to finance the construction of a new terminal at Pulkovo airport in St. Petersburg, Russia.
The 15 year EBRD loan is part of a € 176 million long-term debt package being put together by five separate institutions to fund the landmark public private partnership (PPP) project. Other participants include Russia's Vnesheconombank (VEB) and the World Bank's International Finance Corporation (IFC).
A statement from the EBRD said that a key aspect of the concession finance project was to demonstrate its effectiveness as the first PPP for the airport sector in Russia, structured to international standards.
EBRD First Vice President, Varel Freeman said, "This project will bring the EBRD's investment in St. Petersburg to well over € 800 million. Over 50% of this funding has been earmarked for essential infrastructure projects such as this airport renewal, which we hope will serve as a model that can be adopted in other parts of the country.
"The success of this transaction, especially in current market conditions, shows that well-structured PPPs can be a viable form of infrastructure financing," said Mr Freeman. "This is of critical importance in Russia where the authorities admit that a vast amount of infrastructure inherited from the Soviet period is in need of urgent modernisation."