KfW-Ipex has issued a €36mn loan for the construction of a hypermarket in Russia.

The borrower is the Russian subsidiary of Globus Group, a German conglomerate and the loan will be drawn-down in Russian roubles. None of the terms of the financing have been made public.

Sven Wabbels, head of portfolio management at KfW-Ipex (the commercial arm of the German development bank) tells GTR that this is the second Russian currency loan it has made to date. By borrowing from KfW, says the bank, companies “get long-term maturity loans, not provided by the local banks”.

Furthermore, borrowing in roubles will allow Globus – whose revenues are denominated in local currency – to mitigate currency exchange risk and interest rate exposure.

Wabbels continues: “This makes it easier for the debtor to calculate its repayments as it does not have to take account of exchange-rate fluctuations. This therefore reduces the currency-related default risk.”

The hypermarket will be built in Tver, 170km northwest of Moscow. It is scheduled for completion in March 2014.