Infrastructure bonds market development in Russia: securitization mechanisms for financing federal highway projects

This article examines current challenges in financing large-scale infrastructure projects in the Russian Federation, particularly in the toll roads construction. It provides an analysis of the limitations inherent in existing funding models, such as concession agreements and long-term investment agreements, which lead to high costs of debt capital and a concentration of states risks. As a key solution, the cash flows securitizing mechanism from infrastructure projects through the issuance of infrastructure bonds (IBOs) is proposed. The article explores the prerequisites for the formation of an IBO market, the comprehensive set of necessary incentive measures from the regulator and the government, as well as the potential investor pool and international experience. A possible target architecture for the infrastructure bond financial instrument and a step-by-step mechanism for its implementation are presented using a pilot project as an example. The development of the IBO market can diversify funding sources, reduce the burden on the state budget, and attract long-term private investment into infrastructure.