RDIF and Rostelecom to improve digital equality in Russia
Press release, 22.05.2014
St Petersburg, May 22, 2014 - The Russian Direct Investment Fund (RDIF) and leading international infrastructure investors announce joint investment in a project to address internet access inequality across Russia’s regions, which will be implemented in partnership with Rostelecom.
Total investment in the project will be up to 67.5 billion roubles ($1.956 billion). RDIF will create a SPV to finance the project. Funds for this SPV will be raised in the forms of equity and debt well as debt financing from the National Welfare Fund (NWF).
The project will provide access to the internet and will improve telecom services in Russia’s sparsely populated communities. The parties will collaborate on constructing a telecommunications network and installing access points and fiber-optic lines. Construction of the network is expected to be completed within the next 5 years.
May 13, 2014 the Federal Communications Agency and Rostelecom signed a 10-year state contract regulating the terms of their universal communications services. In accordance with the agreement, Rostelecom will provide a data service with minimum speed of 10 Mbit/s to 13.6 thousand settlements with a population of 250 - 500 people. Around 200 thousand new fiber-optic communication lines will be built in support of this.
Kirill Dmitriev, CEO of the Russian Direct Investment Fund, said:
"NWF funding of this project will serve to attract leading international investors. NWF’s assets are invested in a secure way – in the form of debt, guaranteed by Rostelecom annual repayments from Universal Service Fund. The deal structure will significantly accelerate the programme aiming to bring an end to digital inequality, reducing the project timeframe from the originally anticipated 10 years to up to just 5 years."
Sergey Kalugin, President of OJSC Rostelecom, said:
"The participation of RDIF and international investors will help to significantly reduce the timeframe of this project. Constructing 200 thousand kilometers of new fiber-optic communication lines and organising access points in the most remote and inaccessible areas within five years is a real challenge and a huge responsibility. The new universal services will provide millions of Russian citizens with equal access to the Internet."
Russian Direct Investment Fund (RDIF) was established in 2011 to make equity co-investments primarily in Russia alongside reputable international financial and strategic investors. Based in Moscow, RDIF’s management company is a 100% subsidiary of Vnesheconombank. Further information at www.rdif.ru.
Rostelecom is Russia’s largest national telecommunications operator with presence in all Russian regions. The Group is a universal operator and undisputed leader of broadband and pay-TV markets in Russia with over 10.6 million fixed-line broadband subscribers and over 7.5 million pay-TV subscribers. The Group is also an important innovator that provides solutions in the field of medicine, E-Government, cloud computing and education.
Rostelecom was assigned a ‘BBB-’ and ‘BB+’ international credit ratings by Fitch Ratings and Standard & Poor’s respectively, both with a ‘Stable’ outlook. The Group generated RUB 325.7 billion of consolidated revenues, RUB 113.3 billion of OIBDA (34.8% of revenues) and RUB 24.1 billion of net income for the 12 months ended December 31, 2013. Additional information is available at: www.rostelecom.ru
Russian Direct Investment Fund
Director, Media Relations Department
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Andrew Hayes / Maria Ignatova / Elena Kuza
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