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Could WHSD be a Russian PPP benchmark?
17 October 2011
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[gazprombank]
[vtb]
[astaldi]
[whsd]
[ebrd]
The Western High Speed Diameter (WHSD) road concession promises to be the first real test of domestic lender appetite for local currency project finance debt in Russia. VTB Capital and Gazprombank, as equity providers, won the concession, to build the road’s central section and operate all of it, from the city of St Petersburg in early August.
The two financial institutions, both with deep ruble funding resources, have provided a financial proposal alongside the bid, and would be able to fund the debt component of the project’s R69 billion ($2.37 billion) private sector funding requirement. Given the fate of an earlier version of the WHSD’s concession, which fell victim to the credit crunch, the two sponsors might feel that trying to broaden the funding base for the road is not worth the time and cost.
There are several precedents on which the financing might draw, not the least of them the federal...
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