EBRD and IFC close first loan syndication for Russian PPP project

The European Bank for Reconstruction and Development and IFC, a member of the World Bank Group, have jointly raised EUR200 million from a group of eight commercial banks for the reconstruction and expansion of St. Petersburg's Pulkovo airport.

Lorenz Jorgensen, EBRD Director of Syndications, said: "This is the first transaction of its kind in Russia financed by commercial lenders, and the fact that this benchmark deal for a landmark Russian infrastructure project was heavily over-subscribed sends a positive signal about the market's potential appetite for such deals."

The commercial banks participating in the EUR200 million B-loans syndicated by the EBRD and IFC are: UniCredit Group (EUR55 million), Standard Bank Plc (EUR39 million), Espirito Santo Investment plc (EUR23 million) and Nordea Bank AB (EUR23 million) as Bookrunners and Mandated Lead Arrangers; DZ Bank AG Deutsche Zentral-Genossenschaftsbank (EUR17 million), KfW IPEX-Bank GmbH (EUR16 million), MEDIOBANCA-Banca di Credito Finanziario S.p.A. (EUR13.5 million) and Raiffeisen Zentralbank Österreich AG (EUR13.5 million) as Mandated Lead Arrangers.

"We are very satisfied with the results of the syndication for the renovation of Pulkovo airport. This is Russia's first public-private partnership project financed with private money, and its success is a sign of the growing interest of international investors in helping develop the country's infrastructure," said Ritva Laukkanen, IFC Director of Syndications and Resource Mobilization.

The syndication brings the overall amount raised by the EBRD and IFC for the Pulkovo project to EUR370 million. Both institutions remain the lenders of record for the full amount under an A-/B-loan structure. The maturity of the EBRD and IFC syndicated B-loans is 12 years while that of the A loans is 15 years.

On April 28, 2010, the EBRD committed €100 million A loan for its own account in the project. The IFC A loan commitment was €70 million. The EBRD-IFC funding is part of a long-term debt package of about EUR716 million put together by five international financial institutions and Russia's Bank for Development and Foreign Economic Affairs Vnesheconombank to finance the reconstruction and modernisation of Pulkovo airport, including the building of a new terminal.

Pulkovo is the first public-private partnership transaction for Russia's airport sector designed in accordance with international standards. The airport project is managed by Northern Capital Gateway Ltd. a international consortium, consisting of VTB Capital, Fraport AG (the owner and operator of Frankfurt airport) and Copelouzos (a Greek investment and business group).