1 St. Petersburg, 2010 VNESHECONOMBANK’S PPP CENTER: DRIVING FORWARD REGIONAL PPP PROJECTS MARKET IN RUSSIA

2 Vnesheconombank profile Vnesheconombank PPP centre PPP in Russia Pipeline Development Projects CONTENT

3 Role and function Development of priority industries and infrastructure Support for Russian industrial exports Implementation of Government support measures for Russian companies and financial institutions Agent for the Russian Government in managing sovereign assets and debt State Corporation – “Bank for Development and Foreign Economic Affairs (Vnesheconombank)” Public interest entity “State corporation” (public interest self-governing entity) Operating under special Federal Law Exempt from Central bank regulation Equity contributions directly from Federal Budget WHO WE ARE

4 ALEXEY KUDRIN Deputy Prime Minister; Minister of Finance VICTOR ZUBKOV First Deputy Prime Minister IGOR LEVITIN Minister of Transport VLADIMIR DMITRIEV Chairman of Vnesheconombank SERGEY IVANOV Deputy Prime Minister DMITRY KOZAK Deputy Prime Minister ELVIRA NABIULLINA Minister of Economic Development VICTOR KHRISTENKO Minister of Industry and Trade Chairman Of The Board VLADIMIR PUTIN Prime Minister SUPERVISORY BOARD OF VNESHECONOMBANK All Board members are appointed by the Russian Government

5 Over 5 years Over RUB 2 bln. (USD 61 mln.) Over RUB 1 bln. (USD 30.5 mln.) Loans Guarantees Equity investment in an entity’s capital Investment advise MEMORANDUM ON FINANCIAL POLICIES OF THE BANK FOR DEVELOPMENT Operations Project selection criteria Project payback period Total CAPEX of a project Vnesheconombank’s minimum participation Principle of priority to PPP instruments Principle of good project viability

6 Vnesheconombank profile Vnesheconombank PPP centre PPP in Russia Pipeline Development Projects CONTENT

7 VNESHECONOMBANK’S PPP CENTER: MISSION AND PRINCIPAL TASKS Project assistance Capacity development Our main goal is to provide quality assistance to public authorities on implementation of their industrial, regional or urban development strategies within a PPP framework Investment advisory services to public authorities Programs of PPP projects on the basis of standardized documentation Development of PPP units within administrations Development of legal and regulatory environment to facilitate use of PPP PPP market analysis and information to engage private sector interest Public staff training development

8 Since 2009 Centre has been performing VEB function of the Russian Government advisor to assess financial, budgetary and economic efficiency of project applications for the State Investment Fund subsidies. Since August 17, 2010 Vnesheconombank has been appointed as a Single Provider of Services on Investment Consulting for the State Needs of the Russian Constituent Entities to Form Investment Projects on the terms of public private partnership (Government Order №1372-p of ) INVESTMENT CONSULTING CARRIED OUT ON PPP PROJECTS WITH THE USE OF:  Investment Fund of Russian Federation;  Concession agreements;  The mechanisms operating on the territories of special economic zones;  Instruments under the laws of the entities of the Russian Federation, implemented on PPP terms with their participation in appointed projects PPP Centre representatives memberships in PPP and Investment Advisory Boards of Ministry of Economy, Ministry of Transport, Ministry of Regional Development, Tourism Agency, Investment Policy and Entrepreneurship Committee of the State Duma (Parliament), Russian Union of Industrialists. INVESTMENT ADVISORY SERVICES

9 Methodology on launching PPP units within regional administrations was drafted and modeled after St.Petersburg success. As of September 1, 2010, 15 Russian regions have created PPP units, 19 regions are considering or in the process of a PPP unit creation in Model regional law on participation of the region and its municipalities in PPP projects was drafted, modeled after St-Petersburg experience. This draft was approved within Investment Policy and Entrepreneurship Committee of the State Duma. As of September 1, 2010, 22 Russian regions have approved PPP regional law, 30 regions are in the process of approval. Training courses in regions, cooperation with universities Information and public relations campaign Network of consulting companies International cooperation CAPACITY DEVELOPMENT PROGRAM

10 FUND RAISING PLATFORM FOR PPP PROJECTS SUPPORT - MOBILIZATION AND SUBSEQUENT DISTRIBUTION OF DONOR FUNDS UNDER THE JOINT PROJECT Donor Platform is designed as a program of technical assistance for the formation of an effective mechanism to support pre-project activities of Administrations* through the organization providing them with grants for: preparation of projects for construction and modernization of public infrastructure development of regional and municipal regulatory framework retraining of stuff of the States and municipal administrations Formation of a pool of targeted grants Donors are: Large Russian entities International financial and non-for profit entities Foreign entities UNDP is recipient of donor funds Vnesheconombank is an executive agency of the Joint Project, which organizes targeted use of funds received from donors. * Russian regional and municipal authorities

11 Vnesheconombank profile Vnesheconombank PPP centre PPP in Russia Pipeline Development Projects CONTENT

12 PPP IN RUSSIA Contracts - Lease from public authority and private investment - Private investment and service or lease to public authority - Concession - Service contract (Life cycle contract developments) Procurement - Public procurement law - Competition law - Concession law - Land law - Rules of leasing municipal property - Regional legislation

13 WHAT IS A PROGRAM APPROACH Program approach targets most regular and relevant development challenges at local level (regional and municipal) Program is developed as a collection of PPP projects that are … - addressing similar issues and dependent on the same set of regulations - structured on the basis of standard contract and tender documentation that has been prepared to assure project bankability - If necessary, procured through joint inter-municipal tender (option for regional projects- one investor – many small projects in a region) The regional PPP units have been integrated into marketing the PPP programs, being prepared by the Centre. Programs are considered instrumental for building up project pipeline and developing cooperation with institutional investors (IFOs, pension funds, relevant commercial banks, strategic investors)

14 ENVIRONMENTAL ENERGY EFFICIENCY Modernization and new construction of municipal infrastructure: boiler plants; leakage management (water and waste water, district heating) street lighting Modernization and new construction of municipal infrastructure: water and waste water treatment stations solid waste sorting facilities. URBAN DEVELOPMENT FOR AFFORDABLE HOUSING AND INDUSTRIAL SITES Construction of municipal utility and social infrastructure for complex urban development, including development of affordable housing and new industrial sites PROGRAMS OF PPP PROJECTS IN 2010:

15 PRINCIPAL FEATURES OF STANDARD DOCUMENTATION Contract - DBFM contract (Design, build, finance, maintain) - Separation of investment risk from operations (commercial and regulatory risks are shared by the regional and local Governments) - Contract of objectives Security package - Collateral of property and rights - Regional and municipal guarantees - Direct agreement Procurement - Procurement process for the right to conclude PPP contract - Inter-municipal cooperation to facilitate development of multi-site regional projects through a single procurement effort

16 Vnesheconombank profile Vnesheconombank PPP centre PPP in Russia Pipeline Development Projects CONTENT

17 Expressions of interest received from 35 regions of Russian Federation including: 17 RESULTS OF THE EXPRESSIONS OF INTEREST CAMPAIGN Modernization and new construction of water treatment plants and sewage systems in 18 regions of Russia; Construction of solid waste treatment plants in 22 regions; Construction and modernization of boiling plants in 25 regions; Construction and modernization of pumping stations and network elements for water, waste water and district heating in 32 regions; Modernization and new construction of street lighting systems in 18 regions; Urban development in 24 regions.

18 BOILING PLANTS or ALTERNATIVE ENERGY PROJECTS:  ARKHANGELSK REGION  KALININGRAD REGION  NENETS AUTONOMOUS DISTRICT  PSKOV REGION  VOLOGDA REGION  MURMANSK REGION 18 *As of September 1, 2010 OFFICIAL RESULTS OF THE EXPRESSION OF INTEREST CAMPAIGN FOR PARTICIPATION IN PPP PROGRAMS (NORTHWESTERN FEDERAL DISTRICT)* PUMPING STATIONS FOR WATER, WASTE WATER AND DISTRICT HEATING:  ARKHANGELSK REGION  KALININGRAD REGION  LENINGRAD REGION  MURMANSK REGION  NENETS AUTONOMOUS DISTRICT  PSKOV REGION

19 *As of September 1, 2010 WASTE WATER TREATMENT PLANTS:  KARELIA REGION  ARKHANGELSK REGION  KALININGRAD REGION  NENETS AUTONOMOUS DISTRICT  PSKOV REGION  KOMI REPUBLIC SOLID WASTE TREATMENT PLANTS:  ARKHANGELSK REGION  KALININGRAD REGION  NENETS AUTONOMOUS DISTRICT  PSKOV REGION OFFICIAL RESULTS OF THE EXPRESSION OF INTEREST CAMPAIGN FOR PARTICIPATION IN PPP PROGRAMS (NORTHWESTERN FEDERAL DISTRICT)*

20 MODERNIZATION (NEW CONSTRUCTION) OF STREET LIGHTING SYSTEMS:  ARKHANGELSK REGION  KALININGRAD REGION  NENETS AUTONOMOUS DISTRICT  PSKOV REGION  KOMI REPUBLIC *As of September 1, 2010 OFFICIAL RESULTS OF THE EXPRESSION OF INTEREST CAMPAIGN FOR PARTICIPATION IN PPP PROGRAMS (NORTHWESTERN FEDERAL DISTRICT)* URBAN DEVELOPMENT  ARKHANGELSK REGION  KALININGRAD REGION  NENETS AUTONOMOUS DISTRICT  PSKOV REGION

21 PROJECT DEVELOPMENT FOLLOWED BY PPP CENTER Development of waste water treatment plants in 36 municipalities of Karelia region; District heating infrastructure in the city of Murmansk.

22 COOPERATION OPPORTUNITIES Program development Discussion of the program approach; Sharing relevant engineering frameworks; Sharing relevant product information and information on cost/benefit data. Project development Offer of services to regions on pilot project development within the framework. Possible introduction from the PPP Centre; Engagement with the PPP Centre on keeping in touch on project pipeline; Expression of interest for being invited to the relevant tenders; Engagement of the PPP Centre to facilitate relevant project discussions with public authorities. Cooperation with Donor Platform Cooperation with PROJECT DEVELOPMENT ASSISTANS FUND

23 Thank you! Vnesheconombank, Akademika Sakharova Prospekt, 9, Moscow, , Russian Federation tel: +7 (495) fax: +7 (495)