The development of PPP projects market in Russia Kirill Malyutin, PPP Center of Vnesheconombank April 24, 2012, Berlin
PPP IN RUSSIA IN BRIEF Federal legislation (Budgetary code, Federal law on concessions, Civil code, Land law, Public procurement law, Federal law on competition) Regional PPP legislation (60 regional PPP laws) Sources of Funding (International financial institutions, development institutions, commercial banks, non-government pension funds) State support (Vnesheconombank, sovereign guarantees, RF Investment Fund ) PPP institutions 2
FIELDS of PPP PROJECTS IN RUSSIA Transport Ecology Energy efficiency roads, bridges, road junctions speed trams railway infrastructure airports ports waste management water supply sewage treatment and waste water disposal central heating system municipal mortgage fund street light systems Territorial development Social infrastructure IT & Government providing land for housing sites providing land for industrial sites public health service education sport and travel industry culture multifunction centers administration e-government infrastructure Infrastructure for broad band internet access 3
PILOT PPP PROJECTS IN RUSSIA Transport Ecology Energy efficiency Airports: Pulkovo (BOT), Domodedovo, Koltsovo etc. Highways: Moscow-St.- Petersburg highway 15-58 and M4 (BTO) Water: BOTs in Moscow and St.- Petersburg, >30 long term lease and investment contracts in various cities, BTO in Krasnodar & Voronezh regions Waste management: Yanino plant (BOT), Nizhny Novgorod and Volgograd regions (BTO) Irkutsk (BTO), over 30 lease and investment contracts in various cities in Russia Territorial development Social infrastructure IT & Government Project co-financed by the Russian Investment Fund, industrial parks in Kaluga region Sport: Nizhny Novgorod sport centers (BTO) Education: 2 schools & 3 kindergartens in St.- Petersburg (BOT) NO projects 4
VNESHECONOMBANK S PROFILE 100% owned by the government of Russian Federation State Corporation is non-commercial organization Exempt on income tax Regulated by Federal Law No. 82-FZ On Bank for Development Chairman of the Supervisory Board the Prime Minister of the RF Viability principle (payback period, remuneration, investment recoverability) Not regulated by Central Bank 5
VNESHECONOMBANK`S PARTICIPATION IN PPP INFRASTRUCTURE PROJECTS CONSTRUCTION OF MOSCOW-SAINT-PETERSBURG HIGHWAY (15-58 KM) Region: Moscow Total project value: RUB 72.0 bn VEB s commitment: RUB 14.6 bn Region: Kaluga Total project value: RUB 9.299 bn VEB s commitment: RUB 7.375 bn INFRASTRUCTURE DEVELOPMENT OF AN INDUSTRIAL PARK RECONSTRUCTION OF THE INTERNATIONAL AIRPORT «PULKOVO» (STAGE I) Region: Saint-Petersburg Total project value: EURO 1.20 bn VEB s commitment: EURO 0.235 bn COMPREHENSIVE PROGRAM OF BUILDING AND RECONSTRUCTION OF WATER SUPPLY AND WATER DRAINAGE FACILITIES Region: Rostov-on-Don Total project value: RUB 14 bn VEB s commitment: RUB 4.180 bn 6
VNESHECONOMBANK S PPP CENTER: INVESTMENT ADVISORY SERVICES Function of the RF Government advisor to assess financial, budgetary and economic efficiency of project applications for the State Investment Fund subsidies Financial assistance to regional and municipal project development (FARMPD) 2 bn RUR annually from 2011 to 2015 (Vnesheconombank`s Supervisory Board decision, 09.12.2010) 2009 2010 2011-2015 Single Provider of Services on Investment Consulting for the State Needs of the Russian Constituent Entities to Form Investment Projects on the terms of public private partnership (Government Order 1372-r of 17.08.2010) 7
VEB S PPP PROJECTS PIPELINE* Transport Ecology Energy efficiency 10 14 0 Territorial development Social infrastructure IT & Government 10 12 1 * as for April, 2012 8
OUR PPP PROJECTS PIPELINE CONSTRUCTION OF THE BRIDGE OVER THE VOLGA RIVER IN NIZHNY NOVGOROD REGION Sector of public infrastructure Transport Nizhny Novgorod region Construction of the bridge over the Volga river in Podnovie Egis technical adviser Region Subject CAPEX $1.28 bn Payback period TBD Co-Advisors PPP model Herbert Smith legal adviser TBD (concession or LCC) 9
OUR PPP PROJECTS PIPELINE NEW CONSTRUCTION OF KINDERGARTENS AND SCHOOLS IN KHANTY-MANSIYSK REGION Sector of public infrastructure Education Region Khanty-Mansiysk Region - Yugra Subject New construction of 61 kindergartens and schools in Khanty-Mansiysk region CAPEX $ 655 mln Payback period 15 years Co-Advisors BDO economic & legal advisor NAMIKS technical advisor BOLT PPP model Intermunicipal agreement 10
OUR PPP PROJECTS PIPELINE CONSTRUCTION OF WASTE WATER TREATMENT PLANTS IN THE KARELIA REGION Sector of public infrastructure Water and waste water treatment Region Karelia Subject Construction of waste water treatment plants CAPEX $ 72 mln Payback period 14 years Co-Advisors MKD economic & legal advisor SMU 303 technical advisor PPP model BOLT Intermunicipal agreement 11
REGIONAL DEVELOPMENT CORPORATIONS Federal Centre for Project Finance Fund raising on both domestic and foreign capital markets and realization of high-priority capital projects for national economic. Operator of FARMPD. Far East and Baikal Region Development Fund For development and realization of projects on territorial development of Far East and Baikal region. VEB Innovation Fund Promotion of development of innovative industries, infrastructure development in Russian Federation, in the entities and municipalities of Russian Federation and modernization of Russian economy North Caucasus Development Corporation The socio-economic development of regions of North Caucasus 12
PPP CAPACITY BUILDING IN RUSSIA The PPP chair in Financial University Was established in April 2011 jointly by Vnesheconombank and the Financial University of Russian Federation to enhance the quality of PPP market players The expert council of State Duma of Russian Federation The development of federal law on PPP for committees of State Duma of Federal Assembly of Russian Federation in accordance with their activitiy Expert support for municipalities Informing the municipalities about the ongoing projects in Russia in social infrastructure based on PPP mechanisms and providing assistance on structuring the PPP projects Web site PPP in Russia Monitoring the PPP market and uploading the web site with essential information on development PPP in Russia (www.pppinrussia.ru). 13
PPP AGENDA PROPOSALS FOR RUSSIAN CBSS CHAIRMANSHIP Institutional development Analysis of PPP legislation in Baltic countries. Discussion about Russian PPP law draft PPP models development Capacity building PPP awareness programs for stakeholders and sponsors. PPP education programs for project sponsors Opportunities development Development of Technical Assistance Vehicle and International Infrastructure Fund Data base of Baltic countries infrastructure investment projects Presentation of Russian PPP projects with participation of foreign investors PPP project development 14
Thank you! PPP CENTER VNESHECONOMBANK 9 Ak. Sakharov ave., Moscow, Russia tel.: +7 (495) 721-9332 fax: +7 (495) 604-6718 www.veb.ru www.pppinrussia.ru