National Association of Concessionaires and Long Term Infrastructure Investors released third quarterly report on infrastructure investments in Russia on October 24, 2016. The report includes the list of market leaders in the following categories: infrastructure investors, arrangers, financial, law and technical advisors.

The TOP 3 list of financial advisors in concession projects has not changed since the first and the second quarter of 2016:

• JSC "VTB Capital"
• JSC "Gazprombank"
• LLC "FINIST Investment Bureau"

Source: Investinfra

Memorandum of understanding on Arkhangelsk deep-water seaport construction project was signed in Beijing between Poly International Holding Co and JSC "Arkhangelsk transportation and industrial hub "Arkhangelsk" on October 18, 2016. The agreement was signed by the general director of JSC "Arkhangelsk transportation and industrial hub "Arkhangelsk" Sergey Kokin. The prime minister of Arkhangelsk region Alexey Alsufiev took part in the ceremony.

The project for construction of deep-water seaport in Arkhangelsk is included in the "Strategy of transport development of Russian Federation till 2030", and the scheme of territorial planning of Russia in the sphere of transport. The project also meets the goal and objectives of the government program "Social and economic development of the Arctic zone of the Russian Federation".

The forecasted cargo turnover of the new deep-water seaport will reach 30 mln tons in 2030.

The new port will create an alternative transport route for export and import cargo flows in the direction of Europe, Northern America, Asia-Pacific countries (first of all China) and will provide independent access for large sailing vessels in these directions.

The project for construction of deep-water seaport in Arkhangelsk is closely interconnected with the "Belkomur" railway construction project. The project for construction of "Belkomur" railway will allow to optimize logistics for cargo flows from Ural and Siberia by reduction of shipping route by 800 km.

"Actualization of cargo flows, technical decisions, development of organizational, legal and financial models is in process at the moment. Arkhangelsk seaport construction project is the largest investment project, issues connected with its implementation are priority objectives of the regional government" — said Alexey Alsufiev.

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FINIST IB is a financial advisor on the project, provides project support, develops organizational, legal and financial models.

Source: Press center of the government of Arkhangelsk region

Law firm "Liniya Prava" and Investment Bureau FINIST conducted a seminar for the Investment Development Agency of the Republic of Sakha (Yakutia) on the issues of raising investments through bond financing.

The following topics were covered during the seminar:

• Legal model of concession projects financed through a bond issue.
• Possibility of issuing bonds for its further purchase by non-state pension funds.
• Bond financing and financial modelling of concession projects.
• Scheme of bond issue and bond circulation. Issue of municipal bonds and bonds of subjects of the Russian Federation for financing concession projects.
• Case study.

The speakers of the seminar were employees of Investment Bureau FINIST — Dmitry Samodurov (CEO) and Daniil Liberzon (Analyst), and experts of Liniya Prava — Anna Batueva and Valerya Repkova (Counsellors of PPP practice), Olesya Belousova (Lawyer).

The listeners highly appreciated the knowledge and experience received during the seminar and got answers to a number of practical issues.

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Invest Bureau FINIST provides financial and investment advisory services for infrastructure projects and territory development projects through the principals of PPP and project finance.

Liniya Prava Law Firm is a leading provider of complex legal support in such fields as capital markets, corporate, banking and tax law, mergers and acquisitions, project finance, private public partnership, dispute resolution (representing clients in court) and financial legislation drafting.

Source: Law firm Liniya prava

Concession agreement for construction of railway overpass on the Taman Peninsula has been signed on June 17, 2016 at St. Petersburg international economic forum (SPIEF'16).

"This is the first PPP project in the field of railway infrastructure development and it is also the first project of private concession initiative where the initiator of the project is a private investor" said Maxim Sokolov the Minister of transport.

The signer from the public partner is the Federal Agency of Railway Transport (Roszheldor). The private partner is "Tamanneftegaz" (OTEKO group) which is engaged in the development of Taman seaport.

The concession agreement assumes construction of an overpass and a railway from the railroad towards the Kerch Bridge to the Taman seaport.

"This project is not multiplier for only Russian southern transport system development, but it is also a multiplier for the whole transport system of the country, the project also correlates with the decisions connected with construction of the Kerch transport passage" - adds Maxim Sokolov.

FINIST IB was an advisor for "Tamanneftegaz" during the process of preparation of proposal for signing concession agreement.

Source:TASS

Rosavtodor examined 7 PPP projects costing in total 154 billion rubles. These projects pretend to receive funds, collected by the "Platon" system to support road construction projects which are planned to be implemented through the mechanism of concession agreement.

Projects will be selected by the government committee on transport in April and October. The region must have potential investor at the moment of filing an application.

Only 2 of the examined projects have potential investors. "Syktyvkar - Naryan-Mar" road construction project is one of them.

The investors are "Usinskoe DRSU" LLC and Corporation of Development of Komi Republic, the project is financed by OJSC Gazprombank. IB FINIST is general advisor on the project.

All projects, selected for participating in the program should correspond with a number of rules, which will be developed by the Ministry of Transport and approved by the government. Current version of existing criteria assumes the following:

• Project value should exceed 1.5 billion rubles (VAT included, forecast prices)
• Federal co-financing share for motor roads should be less than 50% (VAT excluded)
• Amount of extra-budgetary funding should exceed 15%

Source: based on Vedomosti materials

Session of the Expert Council of Ministry of Energy and Housing of Murmansk region on energy saving and energy efficiency in Murmansk region was held on December 23, 2015. During the session the report on the results of development of integrated project aimed for modernization of heating system in Murmansk region was presented. IB FINIST is investment advisor on the integrated project.

Investment proposals on modernization of heating systems aimed for reduction of subsidies were formed within the integrated project aimed for modernization of heating system in Murmansk region (2015-2030). The main principals of formulating the proposals was reduction of production cost of thermal energy, including increasing efficiency of using existing installed capacity at generation facilities through output of excess capacities, optimization of new generation facilities’ service areas and reduction of negative influence on the environment.

Further realization of the integrated project is planned from 2016 to 2019. Correction of heat supply circuits, formation of land units, development of project documentation, investors' attraction and construction of generation facilities will be realized during this period. The effects of subsidies reduction will be achieved by 2020 after implementation of primary generation facilities.

The Expert Council of Ministry of Energy and Housing of Murmansk region highly appreciated the value of work done, the recommendation is to approve the integrated project aimed for modernization of heating system in Murmansk region (2015-2030).

Project aimed for construction and reconstruction of "Syktyvkar - Uhta - Pechora - Usinsk - Naryan-Mar" part of the road (Komi Republic) has been chosen by the interdepartmental commission of the Ministry of Economic Development for participating in assistance program for projects implemented through the mechanism of project finance on the territory of Russian Federation.

Participating in the program allows attracting debt financing with an annual rate of 11.5%^[1] and receiving guarantees from Russian Federation for 25% of the credit line.

This projects involves construction, reconstruction and further exploitation of "Syktyvkar - Uhta - Pechora - Usinsk - Naryan-Mar" general use regional and intermunicipal meaning motor road parts: Pera-Irael (motor road, III category, 34.5 km), Irael-Kadjerom (motor road, IV category, 46 km). It is expected that the project will be implemented through the mechanism of concession agreement according to the Federal law No 115-FZ of July 21, 2005 "On concession agreements". The total value of the project is 4.96 billion rubles, required debt finance - 3.97 billion rubles.

At the current moment 31 projects have been chosen for participating in the assistance program with total value of 283.84 billion rubles. Only 5 projects will be realized in the sphere of transport.

IB FINIST is financial advisor for the concessionaire.

Source: Ministry of Economic Development of the Russian Federation

1. Credit rate is set according to the rate set by the Central Bank of Russian Federation for refinancing authorized banks crediting final borrowers plus 2.5%.

Agreement on construction of Belkomur railway was signed in China on September 3, 2015.The document was signed by CEO of OJSC interregional company Belkomur Yury Demochkin and CEO of Poly Technologies, Inc Van Lin.

The agreement was signed during Vladimir Putin's visit to China. Acting governor of Arkhangelsk region Igor Orlov, head of the Komi Republic Vyacheslav Gaiser and Minister of transport of Perm Region Almaz Zakiev also participated in the ceremony.

According to the information of the regional press center, OJSC interregional company Belkomur and Chinese investors are going to establish SPV (special purpose vehicle) to prepare a proposal for the Government of Russian Federation on formation of concession agreement.

Komi Republic and concession company "Road Concession LLC" signed concession agreement on "Syktyvkar - Uhta - Pechora - Usinsk - Naryan-Mar" general use regional and intermunicipal meaning motor road parts: Pera-Irael (34.5 km), Irael-Kadjerom (46 km). Construction will be finished in 2018, overall project period - 11 years.

Total amount of investment makes up 5.6 billion rubles, 700 million will be spent during the construction period by Komi Republic, the rest of capital expenditures will be provided by the concessionaire. After construction period concessionaire will operate the road with observance of set parameters. Private investments will be returned from conceder's payments.

Consortium ("Road Concession LLC") with support of Gazprombank is formed with participation of OJSC "Fond Investproektov of Komi Republic" and "Usinskoe DRSU LLC".

IB FINIST is advisor on the project.