25835 - Chuvash Roads Modernization Project

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Summary of Proposed Investment

Project Number

25835

Company Name

CHUVASHAVTODOR, PAO

Date SPI Disclosed

Feb 26, 2007

Country

Russian Federation

Industry

Infrastructure

Projected Board Date

Mar 28, 2007

Status

Completed

Sector

Highway Operations (Includes Toll Roads)

Department

Regional Industry INF LAC & EUR

Environmental Category

B - Limited

Previous Events

Approved : May 31, 2007
Signed : Jun 18, 2007
Invested : Sep 13, 2007

Project Description

The Chuvash Republic is a regional government in the Russian Federation with the population of 1.3 million people. It is located 650 km east of Moscow on the Volga river. The Republic’s current economic and social priority is to improve the road network and expand road access, especially for rural communities. The purpose of the investment is to provide a local currency loan in the amount of RUR1.3 billion ($49 million) to help finance the first stage of the Republic’s capital investment program in road sector through Chuvashavtodor, state unitary enterprise owned by the Chuvash Republic. The program involves construction and upgrading of about 550 km of rural roads and the rehabilitation of priority sections of the major road network that are presently in poor condition. Road contracts under the program will be competitively bid. The loan will be fully guaranteed by the Chuvash Republic. This project will be the second IFC sub-national finance investment in the Chuvash Republic.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	50.54
Equity

Development Impact

The project will provide reliable all-season access to over 350 rural communities and restore/conserve critical road network assets. This will promote economic growth and SME development particularly in the agriculture sector, improve access to employment opportunities and social services (education and health) and thereby help improve living conditions and reduce rural poverty. It will help reduce road transportation costs, improving the competitiveness of the Republic’s businesses. The project will also promote greater competition in the road construction sector encouraging new private sector investment in the construction industry.

Accompanying technical assistance will help introduce improved investment prioritization and more efficient maintenance practices to the road sector, with positive fiscal and service delivery impacts.

The proposed loan will provide the Republic access to long-term Ruble financing on reasonable terms, which may not be otherwise available. It will foster a more cost-effective approach to expansion of the rural road network, balanced by high priority investments in the rehabilitation and maintenance of the major road network, as well as help modernize the Republic’s road sector management. The project would help a reforming Republic show good progress in a sector that should play an essential role in job creation and infrastructure delivery and serve as a model for replication in other regions.

The project is a category B investment according to IFC’s Environmental and Social Review Procedure. A summary of IFC’s environmental and social review findings for the project including the rationale for the B categorization is publicly available in the Environmental and Social Review Summary (ESRS) disclosed through IFC’s external website (http://www.ifc.org/projects).

The Environmental and Social Action Plan (ESAP), which is attached to the ESRS, contains specific tasks that Chuvash Republic will undertake to mitigate perceived risks and impacts from the project, and to ensure compliance with IFC’s Performance Standards.

Contacts

For Inquiries About the Project, Contact

Nikolai V. Smirnov, Minister of Finance
Ministry of Finance, Chuvash Republic
K. Marx Street 34, Cheboksary 42800
Chuvash Republic, Russian Federation

Telephone: (8352) 620015
E-mail: finance@cap.ru

Environmental documentation will be made available:

Non-technical summaries of Environmental Impact Assessments that have been prepared (or that will be prepared) for the road sub-projects (over 200) must be made available to the public by the local administrations of the districts impacted by the sub-projects, prior to their implementation and in accordance with Russian legislation.

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This Summary of Proposed Investment is prepared and distributed to the public in advance of the IFC Board of Directors' consideration of the proposed transaction. It is not an offer of shares to the public and is intended solely to enhance the transparency of IFC’s activities. This document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. The following SPI is disclosed in accordance with IFC’s Policy on Disclosure of Information that went into effect April 30, 2006.

The map is for illustrative purposes and does not imply the expression of any opinion on the part of the World Bank, concerning the legal status of any country or territory or concerning the delimitation of frontiers or boundaries. Country borders or names do not necessarily reflect the World Bank Group's official position. In some cases, available project location information is limited to the country of the project's activities. Locations are approximate.

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