Evgenia Zusman: VEB.RF's New PPP Financing Model Could Work Under Certain Conditions

06.03.2026

State corporation VEB.RF has unveiled a two‑tier financing model for concession agreements. The mechanism involves raising project finance during the construction or refurbishment phase, followed by refinancing through the issuance of concession bonds during the operational phase (to secure long‑term funding). According to the developers, this approach would save budget funds and provide businesses with stable, low‑cost financing.

Evgenia Zusman, Managing Partner of You & Partners, has commented on the initiative, addressing key questions about the new model.

Interest for business

“Provided that projects meet the requirements of the methodology and legislation (additional requirements are likely to emerge), and that new infrastructure investors have the corresponding appetite, the model could work. Business interest will directly depend on the actual savings achieved when raising funds for project implementation,” the expert noted.

Addressing current challenges

According to Evgenia Zusman, the mechanism is aimed at securing long‑term money at an acceptable rate, and that is primarily the problem it is meant to solve. “We will only be able to assess the effectiveness of the two‑tier model in practice. It is too early to tell. The main thing is that those who want to and are able to raise financing under the old models should retain that option,” she emphasised.

Key risks

The expert highlighted several key risks associated with the application of the new model:

  • The methodology recommends a concedent credit rating of no lower than “AA+(ru)”, which limits the model's applicability for regions and municipalities with lower ratings.

  • The model requires perfect synchronisation of actions among multiple parties (originator, SPV, concedent, concessionaire) and the use of concession documentation aligned with the VEB.RF standard.

  • Uncertainty around VAT. For refinancing, the investment phase must be completed flawlessly, including full utilisation of the VAT recoverable by the concessionaire (if so provided). However, as Evgenia Zusman recalled, court practice on this issue remains ambiguous: high‑profile VAT recovery cases involving major concessionaires are still pending (e.g., cases №. А40‑228894/2025, А40‑227248/2025, А40‑216506/25). Final rulings have not yet been handed down.

Outlook for implementation

“Whether the model will actually free up funds from major banks, as stated in the methodology, is also difficult to assess at this point. Perhaps, over time, the model will make the concession bond instrument more practically applicable by using it at the operational stage,” the expert concluded.




You & Partners Press Service
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