Evgenia Zusman, partner in You & Partners, took part in the 27th International Financial Congress

07.06.2018

On 6 June 2018, partner in You & Partners Evgenia Zusman participated in the round table on ”Bonds and Other Financial Instruments and Capital Market Mechanisms for Funding Infrastructure Projects” conducted within the auspices of the International Financial Congress in St. Petersburg, Russia.

During the roundtable, the prospects for “green investments” in Russia were discussed, together with the issues related to upgrading institute of infrastructure bonds. Both experts, concessionaries and financing agencies agreed that, in general terms, the practice of funding infrastructure projects in Russia with the aid of the institute of “infrastructure bonds” could be called a success. Moreover, such investments are tangible for the people. When people see a facility that is actually constructed and operated, the confidence in this financial instrument is growing.

The representative of Transport Concession Company LLC told about one example of “green infrastructure projects”, namely, construction of light rail “Chizhik” in St. Petersburg. The concession scope includes 23 vehicle units, 38 km of tramlines renovated, 42 stations and depots created. Of the aggregate investments for the project at the construction stage of 13.7 billion Rubles, about 12.9 billion Rubles were raised from bonded loans.

Both the expert community and members of Russia’s Central Bank and State Duma highlighted the necessity of developing the uniform standards for infrastructure bond issue, investments to infrastructure projects. Despite a variety of international standards in this area, there is nothing but piecewise understanding and statutory regulation at the level of Russian legislation and law enforcement.

The minimal amendment package needed for the existing laws shall improve the legal regulation of special purpose project financing vehicles (SPPFV), specifically, introducing to the Federal Law “On Securities Market” an explicit reference to the SPPFV’s right to issue bonds. What is more, the amendments to 115-FZ are needed to indicate the SPPFV’s right to issue bonds irrespective of any trilateral agreement existing between the concession grantor, concessionary and provider of financing.

You & Partners Press Service

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