OREANDA-NEWS. November 20, 2007. Raiffeisen recommends taking advantage of opportunities now RZB offers excellent local contacts International companies in particular can already profit from Raiffeisen’s advantage in the run-up to the Olympic Winter Games, reported the press-centre of RZB.

The coming months and years will offer enormous opportunities in Sochi and the Krasnodar region. Some EUR 8,78 billion have been budgeted just to create the infrastructure that will be needed for hosting the games. “The resulting opportunities for Western companies in Sochi and Krasnodar are enormous,” according to Karl Sevelda, RZB member of the Managing Board responsible for Corporate Banking. "After Moscow and the Moscow region, Krasnodar is the area with the greatest population density, and is already a booming economic region seven years before the Olympic Games."

RZB is the only Western bank that already has a branch office in Sochi. Sochi, the host city of the 2014 Olympic Winter Games, belongs to the Krasnodar region, just as the Raiffeisen branch in Sochi belongs to the Krasnodar regional head office. RZB has had a presence in Krasnodar as well for many years. "The Russian economy is experiencing growth rates of 6 to 7 per cent per year, and is expecting as much as 7,5 per cent growth in the coming year," emphasises Sevelda as he describes the dynamics of the Russian economy. Direct foreign investments have increased by 40 per cent over the previous year to USD 173 billion.

Describing the current atmosphere in this city on the coast of the Black Sea, Natalya Gribkova, Raiffeisen’s regional director in Krasnodar and also responsible for Sochi, notes that "anyone who visits Sochi could easily believe that the Olympic Winter Games are coming in two years. There’s excavation and construction happening on every corner." One-third of investments are going towards infrastructure. Sochi still lacks many things that it will need to host the games: these include a powerful telecommunications network, which will have to be built up at an estimated cost of EUR 400 million, an appropriate power supply system, improvements in the road and rail systems, and suitable water supply and sewage facilities.

"Especially Austrian and international companies have a great wealth of know-how that is very necessary just now. And RZB has outstanding contacts and knowledge of the local market," Sevelda points out as he details the opportunities. "We want to be the banking partner in Sochi for international companies." Western help will certainly be needed and sought in many areas. The Russian and Austrian economies are already very closely linked. Austrian exports for instance to Russia have increased fivefold since 1999, and grew 32 per cent in the previous year to EUR 2.25 billion. Russia ranks 11th on the list of Austrian export destinations.

RZB analysts note that international companies have good potential to be heavily involved in many aspects of the Winter Games. These will include the core area of investments, namely infrastructure projects such as water treatment, drinking water supply, waste management, public lighting, traffic guidance systems, safety and security technology, road and tunnel construction, ports, mineral water bottling, and the healthcare sector (hospitals, spas/wellness centres). Other areas related to the Winter Games will also be involved, such as food processing, the building trade, construction machinery and materials, food retail, the automotive sector, and consumer goods.

RZB itself has been present in Russia since 1990, when it founded a representative office in Moscow. RZB opened a subsidiary bank in Moscow in 1997. And when Russia was hit by the financial crisis in 1998, RZB with its subsidiary Raiffeisen Bank Austria was the only Western bank that remained true to the market and was the first bank to recapitalise, in other words to contribute additional equity capital. Raiffeisen International in Russia finally acquired Impexbank in 2006, and has since become Russia’s seventh largest bank.