The European Bank for Reconstruction and Development (EBRD) will provide comprehensive project preparation support, by means of its Infrastructure Project Preparation Facility (IPPF), to Belarus to upgrade a section of international transport corridor, the M10 road. The project will involve private sector participants under a public-private partnership (PPP) concession scheme, for the first time in Belarus.
The Bank will also consider financing the project itself, once a preferred bidder has been identified following a tender process.
The agreement to provide legal, technical and financial structuring support was signed at the start of theEBRD Annual Meeting and Business Forum 2016 in London in the presence of Vladimir Semashko, Deputy Prime Minister of Belarus. EBRD Managing Director for Infrastructure, Thomas Maier, and First Deputy Minister for Transport and Communication of Belarus, Aliaksei Auramenka, signed the agreement.
“The EBRD is pleased to note a real reform momentum in Belarus with regard to private sector involvement in infrastructure. The Bank welcomes the recently adopted PPP legislation, on which the United Nations Development Programme advised the authorities, and is ready to cooperate on further improvements to the legislation. I am particularly happy that the EBRD’s extensive experience in public-private partnerships, which we helped introduce in important markets such as Turkey, Russia, Kazakhstan and others, will now benefit Belarus,” said Thomas Maier.
The road reconstruction project will be the first in Belarus undertaken on a PPP concessional basis. The concessionaire will design, build, operate and maintain the motorway section and in return receive an availability fee from the Belarusian authorities. The tender is expected to take place in the first half of 2017. The project envisages the reconstruction and upgrade of an 85 km section of the M10 road, an international transport corridor and an alternative route between the EU, Belarus, Russia and China. The reconstruction is expected to double the traffic capacity, increase the maximum axle load (the total weight of a vehicle ‘felt’ by the roadway) to meet EU standards, and reduce travel times. The road upgrade is likely to cost a total of around US$ 350 million.
The EBRD’s project preparation technical assistance will be offered as part of the Bank’s recently created Infrastructure Project Preparation Facility, designed to help the EBRD’s countries of operations speed up the processes associated with much-needed infrastructure investments.
Under the current agreement with Belarus, an EBRD-appointed consultant will structure the project as a PPP concession in line with best international practice and Belarusian law; help with preparing and organising the tender; assist the Belarusian authorities in negotiations with the preferred bidder; and support project management.
To date, the EBRD has invested about €1.76 billion in various sectors of the Belarusian economy, with a focus on private sector support.