Ministry of Economic Development of the Russian Federation
Ministry of Economic Development of the Russian Federation
AIIB Approved Sovereign Loan for Russia Amounting to $500 Million
12 December 2019 16:48

Board of Directors of the Asian Infrastructure Investment Bank (AIIB) approved a sovereign loan for the Russian Federation amounting to half a billion dollars to fund a pilot Russian project in the bank's portfolio — “Infrastructure Development Programs of the Russian Federation”. This is the first loan from the international development institute with the participation of Western shareholders granted to Russia since 2014.

The first part of the loan (96.7 mln dollars) will be used for reconstruction of the section of the R-21 Kola highway running from Saint Petersburg through Petrozavodsk, Murmansk and Pechenga to the Russian-Norwegian border. Future tranches will also serve for road infrastructure development. Subprojects for the remaining amount have yet to be determined.

“We must understand that not only Asian countries are represented in the AIIB, but also the United Kingdom, Canada, France, the Netherlands, Spain, and Belgium. There are 75 states in total. Certainly, such an initiative would encounter stiff opposition in other global institutions. However, within the AIIB, our Western counterparts have to reckon with the position of the rest of the world. This proves that the policy of sanctions restrictions cannot go on and on,” Maxim Oreshkin, Head of the Ministry of Economic Development, commented.

Ministry of Economic Development, aided by the Ministry of Transport of Russia, was responsible for approval of the tranche and preparation of the primary documentation. Ministry of Transport will be a contractor under the project.

Due to the high credit rating of the AIIB, cost of the loan from the bank is lower than the cost of borrowing in the form of sovereign Eurobonds.

Asian Infrastructure Investment Bank, established on the initiative of the PRC, started its operating activity in January 2016. During this time, 75 countries have become members of the development Institute, and another 25 countries are completing procedures required for joining the organization. China and India are major shareholders of the AIIB with 26.5% and 7.6% interests (voting stock), respectively. The organization also represents Western countries with a voting share of 25%.

Дата публикации: December 12, 2019
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