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03 june

Alexander Misharin: NDB BRICS and AIIB are ready to finance Moscow-Kazan HSR along with China

China will extend a 20-year RUB400 bn credit facility to finance Moscow-Kazan high-speed railway line (HSR) project. This is what Alexander Misharin, First Vice President of Russian Railways, told the media. “RUB52 bn, for the Moscow-Nizhny Novgorod section, as a capital contribution (to a special purpose vehicle, TASS's note), and RUB250 bn as a 20-year loan. As to section 2, it is USD1 bn as a capital contribution and RUB150 bn also as a 20-year loan", he said. “NDB BRICS and AIIB are ready to finance Moscow-Kazan HSR along with China”, underlined Mr. Misharin. China wishes to set up a number of joint ventures in Russia for the HSR construction. As reported earlier, according to Kommersant, Russian and Chinese parties agreed that Russia will not have to issue sovereign guarantees for the RUB400 bn credit facility granted for the HSR construction. The credit facility will be extended by China Development Bank: the intent was stated in the minutes of the sixth meeting of the HSR Task Group in the beginning of May in Beijing. Intergovernmental agreement documents are currently being prepared and, according to different sources, may be signed during Vladimir Putin's visit to China in June. Alexander Misharin also informed that China intends to set up a number of joint ventures in Russia to provide for the HSR construction. “They are now establishing a joint venture with Novosibirsk Switch Works or Murom Switch Works to produce track switches, and discussing the shares of construction companies to participate in HSR construction. We need them, they have the expertise. It's important they have a part in automation devices“, he added. Joint ventures with China may also be set up in such industries as power supply, communication, cement and cement structures manufacture. From Moscow to Kazan in 3.5 hours. Moscow-Kazan line will be about 770 km long with the travel speed of 400 km/h and stations at each 50-70 km. Travel time by HSR from Moscow to Kazan will be 3.5 hours against the current 14 hours. The total value of construction is estimated at RUB1.068 tn. In the future, Moscow-Kazan section can become a part of Moscow-Beijing HSR, which estimated cost is RUB7 tn, and of the Silk Way Project to link China with European and Middle East markets. The project will be implemented through a public-private partnership in the form of a concession, with Russia as the Concessor and a special-purpose vehicle as the Concessioner. The special-purpose vehicle will be a consortium led by High-Speed Rail Lines, RZD's subsidiary, with China as a shareholder. The Chinese party will participate both in the capital of the special-purpose vehicle and in debt financing. 
Source: TASS

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