Interfax reported that the European Bank for Reconstruction and Development and Russia Rosvodokanal Group signed a second loan agreement on Wednesday for the provision of RUB 1.5 billion to the latter company.

Mr Varel Freemen the EBRD first vice president said at an Interfax press conference that this is our second agreement. We will provide a total of RUB 3 billion to Rosvodokanal including the first loan."

The loan will be available for 13 years. It was reported in August that Rosvodokanal plans to raise RUB 3 billion in bank financing, 50% of which would be provided by the EBRD. The other half was to come from a Russian financial institution.

The funds will likely go to the modernization of Rosvodokanal infrastructure in Kaluga, Tyumen, Orenburg, Barnaul, Tver, Omsk and Krasnodar. EBRD first loan at the same amount of RUB 1.5 billion was raised in 2008. The loan agreement terms foresaw a three-year grace period during which the company would have to return the interest and not the principle.
Mr Jean-Patrick Marquet the EBRD's director for municipal and infrastructural projects said that the bank would invest RUB 5 billion in Russia municipal sector in 2011.

Ms Natalia Khanjenkova the bank managing director for Russia said including the agreement signed on Wednesday, the EBRD has invested RUB 2 billion in Russia since the start of 2011.

She said "With the signing of this project, our bank's investment in 2011 in Russia has already gone over EUR 2 billion. We are continuing to work and this will be a bigger amount by year's end."

(Sourced from Interfax)