Search for New Investments Opportunities for PPP projects: Sharing Experiences between France and Russia

The conference provided the opportunity to discuss all issues relating to financing of PPP projects from different standpoints. French and Russian contributors, representing both public and private sector and having a wealth of technical and practical experience in implementation of PPP projects, spoke at the conference. 

 The conference's moderators and Vice-Chairmen of the CCIFR PPP Committee, Anton Stadnikov, a member of the Board of Directors of NWCC, and Alexander Dolgov, GLN Partner and Head of the Russian PPP and Project Finance Practice, emphasised that existing alternatives to long-term banking financing whose amount and terms have been considerably reduced as a result of the financial crisis should be considered. The contributors spoke about different types of financing which were being used and which could be used for PPP projects. 

 As far as Russia is concerned, Alexander Bazhenov, Vnesheconombank PPP Center Director, and Marc Partridge, Co-Head of Project Finance at Gazprombank, noted that projects in Russia are financed for the most part by banks, with equity capital of sponsors. Alexander Dolgov, GLN Partner, spoke about the current status and prospects for legal regulation of alternative instruments which may be used for financing PPP projects in Russia and, in particular, about infrastructure bonds and the eventual role of the National Wealth Fund and Russian Direct Investments Fund in financing PPP projects in Russia. He stressed that such instruments would, no doubt, be used for the implementation of major PPP projects in Russia and may also actually be used for regional and municipal projects. 

Speaking about state financial support, Jean-Charles Flaus, representative of Caisse des dépôts et des consignations, emphasised that it should not be considered as an exclusive and sufficient source of financing but as instrument allowing to attract private funds which were ready to invest in projects of public interest. Michel-André Volle, Head of Project Finance at HSBC, stressed that there were a number of circumstances at the moment which favoured the increase of the role of institutional investors in the field of financing of infrastructure objects. According to Ilya Sedov, a Partner at Ernst &Young, the use of funds provided by institutional investors, in particular, those of insurance companies and pension funds, is a promising opportunity for the development of PPP projects. 

The participants widely discussed the initiative of the European Commission in the field of project bonds. The first projects using such bonds are scheduled to begin in the next months. They also discussed the increasing role of the European Investment Bank, whose instruments allow the funding of infrastructure more attractive for commercial banks and increase the financing volumes on more favourable conditions. 

The contributors emphasised that PPP projects can save substantial amounts due to optimisation of project conception, performance of work under high quality and deadline control, and high standards of maintenance and operation. To illustrate this point, Doris Chevalier, Vice-President Project Financing at Alstom Transport, gave an example of railway PPP projects in France and reported on positive experiences obtained from such projects. Thomas Bigueure, Vice-President of Structure Finance Department at Vinci Concessions, shared the experience acquired in financing of a US project relating to a bridge across the Ohio River, the first project in the USA providing a 100% financing using obligations, which opened interesting prospects for other PPP projects. The conference was closed by Vincent Piron, Chairman of the CCIFR PPP Committee, who emphasised a high level of discussions and the importance of selection for financing competently structured PPP projects and analysing their social and economic effects. Notes to Editors The French-Russian Chamber of Commerce (CCIFR) has been operating in Russia for 15 years, at present, it unites more than 300 companies. CCIFR is a member of UCCIFE - Union of the Chambers of Commerce of France abroad. The CCIFR members include the Embassy of France in Russia, the Chamber of Commerce of the Russian Federation and the Russian Union of Industrialists and Entrepreneurs. CIIFR also acts as an official partner of the Saint-Petersburg Economic Forum. In 2010, the Economic Counsel of Russian and French enterprises was established in the framework of the CCIFR. Since December 2011, the Chairman of the Counsel has been Mr. Gennady Timchenko, coowner and member of the Board of Directors of Novatek. In 2012, the Expert and Analytical Center Observo was established in CCIFR. Gide Loyrette Nouel is a premier international law firm and the first to have originated in France. Founded in Paris in 1920, the Firm now operates from 18 offices in 15 countries. It has 600 lawyers, drawn from 40 different nationalities. Gide Loyrette Nouel offers some of the most respected specialists in each of the various sectors of national and international finance and business law. 

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For further information, please contact: 

The French-Russian Chamber of Commerce (CCIFR) Natalia Petrova - Communications Director Tel. +7 (495) 721-38-28 – e-mail: natalia.petrova@ccifr.ru Lidia Sutormina – Head of Professional Committees Tel. +7 (495) 721-38-28 – e-mail: lidia.soutormina@ccif.ru