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China : AIIB Makes First Investment in Russia With USD500-M Transport Project
Publish Date : 19-Dec-2019
The Asian Infrastructure Investment Bank (AIIB) has approved its first investment in the Russian Federation to improve transport connectivity and road safety in the countrys key economic corridors.
The USD500-million loan, which will be administered by the Ministry of Transport and Rosavtodor, the Federal Road Transport Agency, will be used to upgrade existing infrastructure and support road rehabilitation in several subprojects that align with national transport priorities. Selection of the subprojects will target vital economic nodes and border regions, thereby enhancing trunk linkages and cross-border connectivity. Upgrading the road network will increase safety, reduce travel time and allow for greater resilience to challenging climate conditions.
According to Global Infrastructure Hub estimates, Russia requires USD60 billion per year in the next five years for infrastructure. The projected spending of around USD40 billion leaves about a USD20-billion gap annually, with the transport sector having the largest shortfall. Our investment in the Russian Federation is a welcome addition to AIIBs growing portfolio in the transport sector across and beyond Asia, said AIIB Vice President and Chief Investment Officer D.J Pandian. As it is the Banks first financing in Russia, it also offers us a valuable opportunity to gain experience in the country for future collaboration on a number of potential infrastructure projects.
The project aligns with AIIBs priorities to invest in climate resilient infrastructure that improves economic outcomes and regional connectivity in and beyond Asia. The Bank will apply its procurement, environmental and social requirements to ensure implementation is conducted to high international standards. The Russian Federation is the third largest shareholder in AIIB.
