The NDB will support the Project through a Sovereign Project Loan up to USD 220 million. The nine small historic cities are across seven Federal Subjects of the Russian Federation and are endowed with rich cultural heritages, numerous historic and cultural monuments of early Russian architecture, and scenic natural landscape. The number of historic monuments in a participating city ranges from 70 to 500, which has allowed the cities to attract 30,000 to 800,000 tourists per year.

The objective of the Project is, through tourism infrastructure development focusing on conservation and development of cultural heritages and urban utilities, to support sustainable socio-economic development in the participating small historic cities in Russia.

The Project is estimated to be implemented over 6 years between 2018 and 2024. Suppliers for the Project will be selected through a competitive and transparent bidding process.

The Project will bring benefits of: (i) better preserved and exhibited cultural heritage sites; (ii) upgraded basic urban infrastructure and incidental services (such as street signage and lighting) at existing and emerging tourist destinations and gateways; and (iii) enhanced attractiveness and popularity of the historic settlements for tourists and the local population. Socio-economic conditions are expected to be improved in the nine small historic cities after successful implementation of the Project, measured by increase of average earnings of the locals, increase of employment rate in the local economy, and the growth of revenues of the municipal budget. The Project is categorized as “B” in accordance with the NDB Environment and Social Framework with limited adverse social and environmental impacts. These adverse impacts are generally associated with the construction activities in urban settings and will be mitigated using the requirements of the Russian country system for environmental and social management. No conversion of natural habitats, or negative impacts on biodiversity or indigenous peoples were found. The Project does not involve land acquisition and resettlement.