Press Releases

World Bank Group Supports Expansion of Road Network in Russia’s Chuvash Republic

IFC, Moscow:
Nezhdana Bukova

Phone: + 7 (495) 411 7555 ext 2026


IFC, Washington, DC

Irina Likhachova

Phone: +1 (202) 473 1813


Moscow/Cheboksary, July 13, 2007 — IFC, the private sector arm of the World Bank Group, today announced that it will finance the first phase of a road modernization program in Russia’s Chuvash Republic. The eight-year loan of 1.3 billion rubles ($50.5 million) to Chuvashavtodor, a state unitary enterprise of the Chuvash Republic, will help build and upgrade about 400 kilometers of all weather roads in rural areas. This will provide reliable access to schools, hospitals, markets, and other services and help create expanded employment opportunities for  people living in these rural communities.

This is the second investment in Russia under the joint IFC-World Bank subnational finance initiative. The program, which will be implemented during 2007-2008, will cost 4.16 billion rubles ($161.7 million). About 150 kilometers of major roads and bridges will also be repaired as part of the program, reducing operating costs for vehicles.

The loan is secured by a 100 percent guarantee from the Chuvash Republic. All road works under the program are being procured using open competitive bidding. Dexia Crédit Local, an AA-rated financial institution based in France, is expected to sign a risk-sharing agreement with IFC in the near future.  Under the agreement, Dexia Crédit Local will provide 50 percent of the financing for the IFC loan and share repayment risk on a proportionate basis.

IFC will also provide advisory assistance to the Chuvash Republic’s Ministry of Municipal Construction and Development to help improve its road asset management and maintenance practices, and strengthen the environmental and social management capacity of the Department of Automobile Roads.

“We are grateful to IFC, our long-term partner, for its financial support and valuable advisory services. This is important for us to gain access to global best practices in road management. We also welcome Dexia Crédit Local as a participant in this project. Our successful cooperation will help attract other commercial banks as investment partners to our republic,” said Mr. Nikolai Smirnov, Minister of Finance of the Chuvash Republic.

“Subnational finance is one of our priorities in Russia. After such a successful start with the Chuvash Republic, we look forward to working with many other regions in Russia and helping them finance development programs in infrastructure and other sectors,” said Jerome Sooklal, IFC Director for Central and Eastern Europe.

About IFC

IFC, a member of the World Bank Group, fosters sustainable economic growth in developing countries by financing private sector investment, mobilizing capital in the international financial markets, and providing advisory services to businesses and governments. IFC’s vision is that poor people have the opportunity to escape poverty and improve their lives. In FY06, IFC committed $8.3 billion, including syndications, to 284 investments in 66 developing countries. For more information, please visit

For more information about IFC-World Bank subnational finance, please visit

IFC in Russia

Russia became a member and a shareholder of IFC in 1993.  Since then IFC has invested $3.4 billion in the country, including $527 million in syndicated loans, in over 130 projects across a variety of sectors.  In FY06, IFC’s investments reached $519 million.  IFC’s investment portfolio in Russia stands at $2 billion, making it the largest country exposure for IFC globally.  IFC has invested in key sectors, including agribusiness, banking, construction materials, health care, housing finance, information technologies, infrastructure, leasing, mining, oil and gas, pulp and paper, retail, and telecommunications.  For more information, visit

About the Chuvash Republic

The Chuvash Republic, located about 630km east of Moscow, has a population of 1.3 million people and a Gross Regional Product of 91.4 billion rubles ($3.5 billion) in 2006.  Although average per capita income is about half the Russian Federation’s average, the Chuvash Republic is one of the more progressive and better performing regional governments. It was one of the first regions to receive funding from the World Bank’s Fiscal Federalism and Regional Fiscal Reform Loan. In 2006, IFC provided a partial credit guarantee that helped the Chuvash Republic obtain a one-notch credit enhancement and successfully issue a billion-ruble bond (its largest and longest tenured bond to that date). In March 2007, the republic was identified by Standard and Poor’s as one of two Russian regions with consistent management commitment to prudent budgeting and transparency. It is currently rated Ba2 by Moody’s Investor’s Service and on the local scale by Moody’s Interfax.

About Dexia Group

Dexia Group was formed in 1996 through a merger of two major European providers of public finance, Crédit Local in France and Crédit Communal in Belgium, one of the first cross-border mergers in the European banking sector. Ranked in the top 15 largest banking groups in the euro zone, Dexia specializes in public finance and retail banking. A global leader in public finance, Dexia operates several subsidiaries and branches in 26 countries.  

For more information, please visit

The Chuvash Republic:
Farida Muratova

Phone: +7 (8352) 62 3352


Dexia Group
Ulrike Pommée

Phone: +32 2 213 5081