VEB.RF to Provide 12.1 Billion Roubles for New Airport Terminal in Blagoveshchensk

VEB.RF will grant a RUB12.1bn loan for the project to construct a new passenger terminal and airfield infrastructure facilities at the Ignatievo international airport, Blagoveshchensk.

The first tranche will be provided in Q2 2024.

Apart from a RUB8.1bn market loan, the project will attract a RUB4bn loan on beneficial terms applicable to priority projects in the Russian Far East and Arctic. The decision was taken at the meeting of the Praesidium of the State Commission for the Socio-Economic Development of the Russian Far East.

“VEB.RF gives special attention to projects designed to develop airport infrastructure. We are involved in project financing in most regions of the Russian Far East. Today, the Amur Region has joined the list of finance recipients. The Blagoveshchensk airport modernisation is one of the key projects of the master plan developed with support from VEB.RF. The project will provide local residents and regional guests with a qualitatively new level of services and make trips and travels more comfortable,” said VEB.RF’s Deputy Chairman Artem Dovlatov.

The new passenger terminal for international and domestic airlines of the Blagoveshchensk airport with a throughput capacity of 1,000 passengers per hour will help to ensure flight safety, improve passenger service quality, increase tourist flow and air mobility of local residents, and promote cross-border cooperation with China.

VEB.RF Deputy Chairman Yury Korsun: “VEB.RF’s financial support at the stage of airport construction is highly significant for projects and their investors. VEB.RF’s involvement ensures the projects’ financial sustainability by using instruments such as the Project Financing Factory and soft term financing for priority projects in the Russian Far East and Arctic. VEB.RF is also competent in structuring PPP projects. The development of domestic tourism requires much better servicing of passengers by regional airports.”

Deputy General Director of Airports of Regions Alexander Zaporozhsky: “Comprehensive modernisation of airport infrastructure envisages complex projects with long payback periods, requiring involvement of a reliable and predictable financial partner such as VEB.RF. And it’s very important for us that our partner can provide us with low-interest loans under the Russian Government programme. Such loans enable us to reduce construction costs and, consequently, future tariffs for airport services and the cost of passenger transportation to these regions.”

VEB.RF acts as a key player in financing the regional airport infrastructure for passenger air transportation, with ten projects already completed (air terminals in Moscow, Saint Petersburg, Vladivostok, Saratov, Yekaterinburg, Sochi, Samara, Khabarovsk, Novy Urengoy and Novosibirsk) and eight regional projects under way, including five projects being implemented in the Far East and Arctic. The total project investment is RUB345.32bn, with VEB.RF commitment being RUB143.84bn. Another three projects have been approved for financing, with investments totalling RUB30.2bn, VEB.RF commitment being up to RUB6.6bn, and passenger traffic reaching about 3 million.

Air traffic is the predominant type of transportation in the Amur Region, including both interregional transportation and intra-regional transportation by small aircraft. The Blagoveshchensk project is of strategic importance for the region, whose economic development prospects are hindered by poor transport accessibility. The project is part of a large-scale programme for the development of an air hub based on the concession mechanism and aimed at ensuring transport connectivity between Far Eastern regions and the rest of the country as instructed by the Russian President.

In addition to the new passenger terminal, the project includes constructing a cargo terminal with a capacity of at least 6,000 tonnes, renovating the airport land site and modernising the existing terminal building. The new terminal is planned to be operational by 2025. The terminal will occupy an area of 25,000 square metres. The project initiator is ABS Blagoveschensk.

The Ignatievo airport named after N.N. Muraviev-Amursky is a federal international airport located 15 km north-west from Blagoveschensk. The airport is less than 3.5 km from the Russian-Chinese border. The Blagoveschensk airport is the only international airport in the region.⁠