Development of Public Private Partnerships

In our efforts to assist public and local self-government authorities in procuring investment projects based on Public Private Partnership (PPP) principles, we aim to raise private financing and take advantage of private business expertise to address public infrastructure development issues. By fostering efficient relations between the public and private sectors, we make Russian regions more attractive for investors, facilitate the emergence of new and expansion of existing facilities, and contribute to higher living standards for the population.

Vnesheconombank runs a range of initiatives for financial and non-financial assistance to public and local authorities in procuring investment projects aimed at developing public infrastructure on a PPP basis. The focus areas here include providing Investment Advisory Services on how to procure PPP projects, improving the PPP legal and regulatory framework, and raising awareness about PPP issues.

The Federal Centre for Project Finance (FCPF) plays the leading role in providing financial and non-financial assistance in procurement of PPP-based investment projects. FCPF is a professional financial company of Vnesheconombank Group that provides procurement support for regional and urban development projects that are to be implemented using private financing. Under Vnesheconombank’s Development Strategy, FCPF is planning to take part in the procurement of 129 regional and urban development projects until the end of 2020. A total of RUB 16.2 bn will be invested in their procurement.

FCPF’s Focus Areas in Assisting Public and Local Authorities with Procurement of Regional and Urban Development Projects

Development of urban and road infrastructure

Road transport and airport infrastructure
MSW management

Integrated territorial development

Industrial parks
Regional large-scale industrial construction projects
Urban agglomerations

Development of social infrastructure

Healthcare
Social security
Tourism

Forms of FCPF’s Assistance to Public and Local Authorities with Procurement of Regional and Urban Development Projects

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Total project value: starting from RUB 16.2 bn

Completion of the project procurement: 2016

Project goal: create an airline hub of international standard in the Omsk Region and implement the Executive Order of the Russian President dated 11 June 2009 on the construction of the Omsk-Fyodorovka Airport.

The project will allow decommissioning the existing Omsk (Tsentralny) Airport located 3 km away from the centre of Omsk and surrounded with residential communities, which goes against take-off and landing safety requirements, sanitary standards on noise and electromagnetic impact, and environmental requirements.

Taking airport activities outside the city’s boundaries will help to unlock Omsk’ development opportunities by removing existing constraints and developing the left-bank territory of Omsk that occupies about 10 thousand hectares. The project will also facilitate safer flights due to better take-off and landing conditions and ability to handle modern aircraft.

The new airport will also encourage population mobility and increase accessibility of transport services for local residents. The airport will be able to handle the expected passenger flow in the area adjacent to Omsk, which will come at about 3 mn passengers by 2038.

Under a relevant resolution by the Russian Government, we are the only provider of investment advisory services for public needs of Russian regions in terms of procuring PPP-based investment projects. In this area, the Bank provides support to public and local authorities in implementing sectoral, regional and municipal strategies to develop public infrastructure on PPP terms.

Vnesheconombank also acts as a financial advisor to the Russian Government on projects that have applied for allocations from the Investment Fund of the Russian Federation and follows up how investors are spending the money to implement projects financed by the government using the funds of the Investment Fund of the Russian Federation.

Investment Advisory Services

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In 2014, Vnesheconombank continued its involvement in the finalisation of the draft Federal Law ‘On the Fundamentals of Public-private Partnership in the Russian Federation’ that was adopted by the State Duma of the Russian Federation in the first reading in 2013.

The Law is intended to remove existing legal restrictions on raising private investments in modernisation and greenfield construction of public infrastructure, and to determine the general evolution vector of PPP legislation at all levels of government.

As a result of these efforts, the draft law was prepared for the second reading with a new title: ‘On the Fundamentals of Public-private Partnership and Municipal Private Partnership in the Russian Federation, and On Amendments to Certain Legal Acts of the Russian Federation’.

In order to promote the market of PPP projects, we are supporting the full range of training and retraining activities for employees of public and local authorities, commercial and non-commercial sector and development institutions involved in the implementation of projects that aim to develop public infrastructure.

The PPP Chair set up by the Financial University of the Russian Government jointly with Vnesheconombank in 2010 is Russia’s first permanent PPP training platform. FCPF and the State Company Russian Highways (Avtodor) became the Chair’s partners in 2014.

The PPP Chair regularly organises career enhancement courses for professionals from Moscow and other Russian regions. The Chair also offers a two-year master programme ‘Management of Public-private Partnership Projects’ and postgraduate courses, and runs research on PPP issues.

Performance of the PPP Chair in 2014

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The PPP Chair is also planning to launch a further professional education programme ‘Master of Public Administration (MPA)’ in 2015 for executives of public and local authorities. The Chair is also preparing a joint project with the United Nations Economic Commission for Europe to set up a Russian Centre for Training PPP Specialists in Russia and CIS. The Centre will offer further education programmes drawing on the Chair’s resources.