Financial Documents Signed for Central Ring Road Project Phase 4

Financial documents for Phase 4 of the Moscow Region’s Central Ring Road (CRR) construction project were signed on 12 December 2019. The syndicate consisting of Gazprombank, Sberbank, the Eurasian Development Bank (EDB) and VEB.RF formalised its arrangement with South-Eastern Highway LLC to lend a total of 35.8 billion roubles for 17 years.

South-Eastern Highway LLC is a special purpose entity created by the Avtoban Group and the Russian Direct Investment Fund (RDIF) to carry out the CRR-4 project. Apart from the Avtoban Group and RDIF, the project also involves financial sponsors—the EDB, VEB.RF and InfraVEB—providing 4.1 billion roubles in subordinate financing for 20 years.

Nikolay Tsekhomsky, First Deputy Chairman – Member of the Management Board, VEB.RF: “Support for major infrastructural projects is high on our list of priorities. In the arrangement, VEB.RF will join the syndicate of senior lenders and provide a portion of subordinated debt as a financial sponsor for the project. Our participation made it possible to finalise the financing structure required by the concession agreement, which is essential to the smooth implementation of the project.”

Konstantin Pesotsky, Senior Managing Director of Structured Lending Products, Sberbank: “We are very honoured to participate in financing the country’s biggest transport infrastructure projects. When put into operation, the Central Ring Road can be a driver of economic growth in Russia, because this highway will considerably speed up the movement of people and goods in the Moscow Region.”

Pavel Brusser, Executive Vice President and Head of Infrastructure & PPP Projects, Gazprombank: “The syndicate of Russia’s largest banks, along with international financial institutions and the Russian Direct Investment Fund, will participate in the project by providing the financing necessary to keep to a tight construction deadline. The syndicate has experience of implementing a similar project, namely Phase 3, which will allow the project risks of the concession to be managed effectively.”

Timur Abdullakhanov, Managing Director and Head of Transport and Infrastructure, EDB: “This is a transport infrastructure project, belonging to a sector that we view as a priority. The project will promote cross-border transport through the Western Europe-Western China transport corridor. For instance, the Phase 4 road is immediately adjacent to the Western Europe-Western China highway and is connected to the M-7 Volga highway and farther to the border with Kazakhstan. The project not only contributes to interregional economic integration between Moscow and neighbouring areas and, in a wider context, across Russia’s transport system in general, but also helps the EDB member countries to increase their transit potential in Eurasia in the long term.”

The concession agreement was signed by Russian Highways, on behalf of the government, and South-Eastern Highway LLC on 2 June 2017. The CRR-4 project includes the financing, construction and operation of a 96.5-kilometre road section. The Phase 4 road is to run in the south-east of the Moscow Region, 50 kilometres from the Moscow Ring Road, through the Noginsk, Pavlovsky Posad, Voskresensk and Ramenskoye Districts and the municipalities of Elektrostal and Domodedovo.

The route is from the M-7 Volga federal highway (km 0 of the A-113 Central Ring Road) to M-4 Don. The predicted average daily traffic for 2030 is 40,300 vehicles. The design speed is 140 km/h. The first construction stage includes four lanes (two in each direction).

Phase 4 consists of 17 bridges and wildlife crossings, 40 flyovers and nine elevated structures. The project uses six grade-separated junctions for the following roads: M-7 Volga, Moscow Smaller Ring Road, Yegoryevskoe Highway, Moscow Smaller Ring Road–Chechevilovo–Moscow Greater Ring Road, M-5 Ural, Vostryakovo–Obraztsovo (access to Domodedovo Airport), M-4 Don.

The Central Ring Road (CRR) is of vital importance for the Moscow Region. The CCR project consists of five phases, each of them can be fully functional as an independent investment project. Phase 3 and Phase 4 are built under the concession agreements signed by Russian Highways with Motor Road Construction Corporation LLC (CRR-3) and South-Eastern Highway LLC (CRR-4).