Herbert Smith Freehills has advised VTB Capital on a RUB 14 billion concession project related to the construction and operation of the toll-road bridges over the rivers Kama and Bui in the Republic of Udmurtia. The project, which began in May 2013, will see VTB Capital provide a 15-year RUB 5 billion loan to the regional government for the construction.
On 1 October 2013, Herbert Smith Freehills’ Moscow Infrastructure and PPP team together with the Project Finance team attended the commercial close of the project, known as the “Udmutria deal” which took place during the fifth Moscow investment forum “Russia Calling”. The cooperation agreement was signed by Andrey Kostin, President and Chairman of the Management Board at VTB, Alexander Volkov, head of Udmurtia and Alexander Zabarsky, chairman of the board of the Mostostroy-12 construction company.
Herbert Smith Freehills’ infrastructure partner Olga Revzina led the team for VTB Capital supported by senior associate Roman Churakov and associate Anastasia Davydova, alongside partner Olga Davydaya, who was assisted by associate Vadim Panin.
The project is being implemented in compliance with the federal law on concessions and stipulates building 15 kilometres of bridges and exit roads, including a 1081-metre bridge across the Kama and Bui rivers near the town of Kambarka on the Izhevsk-Sarapul-Kambarka highway on the border between Bashkortostan and Udmurtia. The new bridge will provide a permanent link between the banks of the Kama and will help to improve traffic flow between Ufa, Izhevsk, Naberezhnye Chelny, Perm and Yekaterinburg, an area currently served by ferries. A concession agreement between the government of Udmurtia and a consortium of investors will regulate the construction and operation of the bridge for the next 49 years. This will be the first regional public-private partnership project.
