Funding for key Russian highway projects

A notable partnership deal looks set to provide funding for key Russian highway projects. A memorandum of cooperation has been signed between the state-owned Russian Highways (Avtodor) and the European Bank for Reconstruction and Development (EBRD). Under this deal the EBRD may provide loans to Avtodor, redeem bonds, or co-operate on concession agreements. This funding stream will allow Avtodor to implement its key PPP projects. Avtodor and the EBRD have been discussing the highway linking Moscow with St Pe
May 10, 2012 Read time: 2 mins
A notable partnership deal looks set to provide funding for key Russian highway projects.

A memorandum of cooperation has been signed between the state-owned Russian Highways (3974 Avtodor) and the 1166 European Bank for Reconstruction and Development (EBRD).

Under this deal the EBRD may provide loans to Avtodor, redeem bonds, or co-operate on concession agreements. This funding stream will allow Avtodor to implement its key PPP projects. Avtodor and the EBRD have been discussing the highway linking Moscow with St Petersburg as well as the reconstruction of the M4 Don road. By 2019, Russia plans to have invested around €33 billion (US$47.4 billion) to develop its national transportation system, with a significant proportion being provided by private investors.

However, some analysts have criticised plans for Moscow’s Central Ring Road, proposed by Avtodor. The original plan was to construct the 521km toll road 50-60km from Moscow, although work has not yet commenced on the project. Some €5.8 billion ($8.36 billion) will be required as investment in the project by 2015, with work intended to be completed by 2022. A new southern bypass is planned for Yekaterinburg in the Ural mountain area of Russia.

The project is expected to cost up to $721.5 million to construct. When complete, the bypass will connect the existing Chelyabinsk and Perm Highways.

State-owned road company Avtodor will work with the local government for the Sverdlovsk Region to finalise the details of the firm building the link.

For more information on companies in this article

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