Case Studies » The Municipality of Petropavlovsk-Kamchatsky (MPK)
The Municipality of Petropavlovsk-Kamchatsky (MPK)
Project Name: The Municipality of Petropavlovsk-Kamchatsky (MPK)
Country: Russian Federation
Highlights (bullet points):
The Project supports MPK’s investment program of RUB 1.95 billion (US$78 million) over 2007-08, covering a broad range of sectors, including roads, health, education, housing, communal services and other social infrastructure.
IFC loan provides MPK with long-term funding which was not available in the market and helps the Municipality to better match its liabilities with the expected service life of its infrastructure investments.
The Project finances rehabilitation of about 146 lane-km of municipal streets, representing 23% of MPK’s paved network.
The accompanying advisory services will help improve MPK’s financial management and road maintenance practices.
About the Municipality/company/city:
MPK, with a population of 295,000, is the capital of Kamchatka Krai and one of the easternmost municipalities of Russia. MPK’s economy depends primarily on fishing and fish-processing, which account for over 1/3 of the city’s economic output.
Financing objective:
The proceeds of the IFC loan are used to finance priority investments in road rehabilitation as well as to refinance a portion of the outstanding short-term loans taken by MPK to finance its general capital expenditure program.
The structure of the project :
A local currency unsecured senior loan of RUB 700 million (US$28.7 million equivalent); a loan with a maturity of 8 years.
The outcome :
IFC loan allows MPK to move from dependence on high cost short-term loans with substantial refinancing risk, to longer maturity funding that is more appropriate for financing long term infrastructure assets.
