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Business news, 12.03.2003 14:16

EBRD considering loan for Kaliningrad-Russia ferry project

Kaliningrad-Russia ferry project The board of directors of the European Bank for Reconstruction and Development (EBRD) will take a decision on whether to provide a USD 75-million loan guaranteed by the Russian government to the Baltic Ferry project in September of this year. This was announced to journalists yesterday by Lutz Blank, the head of the EBRD Environmental Appraisal Unit. The Russian government has proposed that the EBRD take part in this project, and the bank is now examining the proposal, said Blank. He added that within the next two weeks that EBRD would arrange for an independent Swedish consulting company to carry out an environmental assessment of the Baltic Ferry project. It is expected that the results of the EBRD's assessment will be available in three and a half months.

The cost of the project will be USD 140-150 million, of which USD 75 million are planned to come from an EBRD loan guaranteed by the Russian government, USD 22 million from the federal budget, and USD 38 million from private investors. The project is expected to break even within 7-8 years.

The project, which will create a rail and car ferry link between Ust Luga (Leningrad Region), Baltiisk (Kaliningrad Region), and Germany, should receive regional and federal approval by June 2003. This was announced to journalists yesterday by Valery Izrailit, the general director of the Ust Luga Company. He said that June would see the start of work to deepen the harbour at Ust Luga, which is to be financed by the federal budget.

The first stage of the Baltic Ferry project (car ferry service) will open in 2005, and the second stage (car and rail ferry service) in 2006-2007. The developer for the project is the Baltic Ferry company, which is 100%-owned by the Ust Luga Company

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