Orenburg Water Utility

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In October 2003, the Orenburg municipality granted a 25 year term lease contract for the city’s water infrastructure facilities to Rosvodokanal (RVK), one of Russia’s largest private utility operators. The contract was concluded through direct negotiations. The municipality also signed a parallel five year investment agreement with RVK for a total investment commitment of about $63.9 million. As of January 2007, RVK owns a 100% stake in the Orenburg Water Utility. As of January 2007, RVK provides technical and operational management services through long term lease contracts to total of six municipal utilities throughout Russia (Barnaul, Kaluga, Krasnodar, Orenburg, Tyumen and Tver). RVK was a wholly owned subsidiary of A1, the private equity arm of Alpha Group, one of Russia’s largest financial and industrial groups, with oil and gas, banking, telecommunications and other holdings. In 2008, RVK received a loan financing from the IFC (RUB 624 million or $25 million) and parallel financing from EBRD (RUB 5.6 billion or $224 million) to support its obligations under the six long term lease contracts and investment agreements with the municipalities. The EBRD/IFC loan would provide financing to implement 5-year investment programs in each city in which RVK currently operates and the acquisition of new utility operator(s). Both loans were approved by the IFI's respective Boards in 2007. Loan Agreements signing is pending. None Investment committment is for 2007-2011