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Project Name: Mariy El Republic Roads
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Country: Russian Federation
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Highlights:
- The Republic of Mariy El (the Republic) is a “frontier” region in the Russian Federation (RF) with a per capita gross regional product (GRP) that is about 38% of the national average;
- The Project builds on the experience of the WBG subnational program in promoting sustainable road management practices, gained through earlier projects in the Chuvash Republic and in the Municipality of Petropavlovsk-Kamchatsky.
- The Project will support rehabilitation / improvement of about 32 km of roads, construction of about 3 km of sidewalks and other investments in road safety measures. It will also support the Republic’s adoption of more sustainable road asset management policies and practices.
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About the Republic:
The Republic of Mariy El, located approximately 650 km east of Moscow, has a population of about 700,000. The main sectors of the Republic’s economy are processing industry (including oil refining and food processing) contributing about 21% of the Republic’s GRP followed by agriculture and forestry (18% of GRP). GRP grew at an average rate of 7% during 2003-2007, higher than the national average. While this trend continued in 2008, growth slowed down starting in the last quarter of 2008 due to the global economic crisis.
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Financing objective:
IFC financing supports the Republic’s program of capital investment in roads (RUB 548 million / US$ 15.3 million) and refinancing of existing short term debt (RUB 500 million / US$ 13.9 million). The road investment program targets the core network of 1,150 km and covers repair and rehabilitation of road sections in poor condition, upgrading road capacity to accommodate increased traffic, improving access to public transport and enhancing safety of selected “black spots” with high pedestrian accident rates.
In parallel with the financing, IFC plans to provide advisory services to help the Republic improve its asset management and environmental and social practices in the road sector.
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The structure of the project :
IFC provides an unsecured loan of up to RUR 450 million (approx. US$ 12.5 million), with a maturity of 3.5 years and a grace period of 1.5 years.
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The expected outcome :
The Project will contribute towards economic growth and private sector development in a frontier region in Russia through improved road condition. Specifically, the Project will contribute to:
- Improved road condition and road safety in sections covered by the project;
- Lower vehicle operating costs;
- Improved road sector management by the Republic, with strong replication potential in other reform-oriented regional governments.
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