Which infrastructure sectors have taken a hit in the new economic realities? How viable are public-private partnership projects in Russia nowadays? Which projects’ implementation stages are under the highest crisis pressure?

InfraOne Research’s new analytical review «Infrastructure Under Sanctions: Project Viability Ranking» examines the first effects of sanctions on industry revenues, analyses governmental support measures and estimates the viability of PPP projects implemented in the Russian infrastructure market.

It is noted that the new crisis first has taken its toll on the revenue of infrastructure spheres in April 2022. Compared to March, this indicator decreased by 5.4%, which is less than in the first month of the pandemic (-9.4%). Those that suffered the most are passenger air transportation, warehousing and automotive logistics. Subsequently, in case of development of one of three scenarios that are also described in the review the affected areas will either be able to reimburse these losses by the end of the year (optimistic scenario) or the losses will drop down even more dramatically to almost RUB 450 billion (conservative scenario).

The new economic conditions also made the implementation of PPP projects less stable. Due to the increase in the cost of borrowings and fluctuations in the construction materials prices, the greatest risks in the spring and early summer of 2022 arise on the stages of financial closure of the projects, pre-construction and at the very beginning of the facility construction. The authors of the review examined the viability of almost 230 PPP projects launched on the infrastructure market, each worth more than RUB 1 billion, and identified a high-risk group, which included about 20 projects with the total investment portfolio of RUB 210 billion.

The summary of the review in English can be found here: https://infraoneresearch.ru/spief2022/en/