A state-of-the-art 50,000-square-metre logistics and warehousing centre is to be built next to the Moscow MKAD Ring Road with the help of US$27.6mn of financing from the European Bank for Reconstruction and Development (EBRD).

These logistics facilities will help meet the warehousing shortfall in the Moscow area that has been exacerbated by Russia’s consumer boom. Moscow’s existing quality warehousing space is approximately one-third the amount of Prague’s even though the city’s population is eight times that of the Czech capital.

The bank is extending a 10-year loan of US$23.3mn, of which it will take US$8.3mn onto its own books. The remaining US$15mn has been syndicated to RZB under an EBRD A/B loan structure.

The funding will enable ZAO Agrofirma Belaya Dacha, a leading privately-owned producer of greenhouse vegetables, to build two warehouses on land it owns next to the ring road. The company already operates three A class warehouses in the Moscow area through its Belaya Dacha Market subsidiary.

In parallel to its loan, the EBRD is also investing US$4.3mn to acquire a 34% equity stake in the special-purpose company being created to develop and manage the project. Agrofirma Belaya Dacha will have a majority stake in this company.

Agrofirma Belaya Dacha owns a strategically situated plot of land close to two of the Russian capital’s major cargo airports and within easy reach of the city centre, as well as major shopping malls and hypermarkets built along the ring road.

Because of its location and excellent road connections, the new site has the potential of becoming a regional distribution hub. Ilaria Benucci, director of the EBRD’s property and tourism team, says the bank is pleased to participate in a project that sends an important signal to other Russian companies as to the value of transparency and long-term strategic vision in attracting long-term funding from international investors.