Vinci Concessions and VTB Bank close financing for Russian highway concession

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Vinci Concessions and VTB Bank close financing for Russian highway concession

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Two Capitals Highway LLC, the concessionaire comprising Vinci Concessions (40%) and VTB Group (60%), has closed the financing and finalised the construction contract for sections 7 and 8 of the Moscow-Saint Petersburg motorway in Russia.

On 18 November 2014, Two Capitals Highway LLC signed a public private partnership contract with the Russian Federation, represented by AVTODOR, the State Company that operates Russia's motorways. The 27-year contract, which includes 3 years of construction and 24 years of operation, covers financing, design, construction, operation and maintenance of a 138 km toll motorway originating at the Saint Petersburg ring road.

Investment during the construction period amounts to RUB97.8 billion (US$1.71 billion). The Russian Federation will finance 75% of the cost of construction. The works, with a value of €1.1 billion (US$1.19 billion), will be carried out by the ICA consortium, a joint venture bringing together the Turkish ICTAS and the Italian Astaldi construction companies.

The private non-recourse financing amounts to RUB 23.2 billion (US$407 million). The concession company raised the entire debt through a bank loan from VTB Bank and project bonds. The concession company will receive remuneration through availability payments from the Russian Federation during the operating phase. The concession company is also in charge of collecting tolls for AVTODOR.

A company made up of VTB Group (55%) and Vinci Highways (45%) will operate and maintain the infrastructure. Major upkeep and repair works will remain the responsibility of the concession company.

The Moscow-St Petersburg motorway is a strategically important federal investment project to develop Russia's transport infrastructure. The modern high-speed road is planned as a major thoroughfare linking the two largest cities in Russia.

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