Page 78 - RusRPTJun21

6.1.2 Budget dynamics - specific issues...
According to RBC, the Russian government has chosen projects to receive funding on a preliminary basis from the National Wellbeing Fund (NWF), as per the request of President Vladimir Putin. According to media sources, the projects could cost RUB4.9trln and receive as much as RUB895bn from the sovereign fund. The listed projects suggest that the main areas of investment will be transportation, electricity and housing infrastructure. The seven projects chosen to receive NWF funding are:
· The development of the eastern sector of the Baikal-Amur Mainline (RUB188bn from the NWF and a total cost of RUB752bn).
· The overhaul and upgrade of railway infrastructure in Russia’s Central Federal District (e.g. Moscow’s central diameters, the reconstruction of old stations and the building of new stations). According to RBC, the financing gap of c. RUB105bn is expected to be covered by the NWF.
· The construction of the M-12 Highway from Moscow to Nizhny Novgorod to Kazan. The project is expected to be completed by 2024 and should cost about RUB623bn, out of which RUB150bn will come from the NWF.
· The extension of the M-12 with a high-speed road from Kazan to Yekaterinburg. Avtodor, a state-owned road construction company, could receive another RUB50bn from the NWF to go towards the project’s total cost of RUB439bn.
· The replacement of St. Petersburg’s metro trains with 900 new ones over the next three years. The NWF could provide RUB97bn of the total RUB129bn estimated for Transmashholding’s project.
· The housing renovation fund, which could receive RUB150bn to modernize housing infrastructure, including the sewage system along the Black Sea coastline. The project’s funding is likely to come entirely from the NWF.
· The Ministry of Economic Development’s Angara-Yenisey macro-cluster project, which could receive RUB155bn from the NWF. The macro-region (Krasnoyarsk, Irkutsk, Tuva and Khakassia) is expected to receive RUB1.8trln in funding over 2022-35 to make the region more attractive for people living there and to encourage migration from neighbouring countries to the region.
The NWF’s investment will likely have lower interest rates and be provided for a longer period of time compared to loan funding. We noted earlier that RusHydro could receive RUB56bn in funding for its power-generation projects
78 RUSSIA Country Report June 2021 www.intellinews.com