The Federal Property Agency approved a deal to raise investment loan from Vneshtorgbank for the SEVER Project at an extraordinary general shareholders' meeting held by Transnefteproduct.
Such deal is unparalleled in the Russian banking market. It's the first time that a Russian bank has arranged a USD 753 million financing for a seven-year term and at a 10% interest rate to implement a unique infrastructure project involving a trunk pipeline construction. The project is to generate a 50% rise in oil product exports.
According to Andrey Kostin, VTB's Chairman and CEO,
Commenting on the deal, Transnefteproduct's President Sergey Maslov said that never before has a Russian company raised such a big loan from a Russian bank for such a long term. He also reminded that the total project cost is USD 1,300 million, with 42% being Transnefteproduct's proprietary funds and 58% being borrowed.
The SEVER Investment Project being implemented by Transnefteproduct comprises a construction of a 1,056 km long oil trunk pipeline rooted Vtorovo-Yaroslavl-Kirishi-Primorsk, a sea terminal construction in the Primorsk port and a section modernisation of Andreevka-Almetievsk-West oil trunk pipeline with a view to increasing the pipeline throughput.