Russia and a top Italian construction firm on Monday signed a deal worth 1.0 billion euros to build infrastructure for developing tourism in the violence-plagued Northern Caucasus region.
The deal, signed on the sidelines of a visit to Russia by Italian Prime Minister Mario Monti, foresees the Italian firm Rizzani de Eccher investing 1.0 billion euros ($1.2 billion) to develop hotels and commercial infrastructure.
"Rizzani de Eccher plans to form a consortium of investment, credit, and import firms and other organisations as well as construction and developer companies," the Russian Northern Caucasus Resorts group said in a statement.
The deal was signed by the main shareholder of the Italian firm, Claudio de Eccher and the chairman of Northern Caucasus Resorts Akhmed Bilalov in Moscow.
Developing tourism in the Northern Caucasus is a key strategic priority for Russia to bring stability to a region with huge potential but which has been scarred by a years-long Islamist insurgency fueled by high unemployment.
Rizzani de Eccher will be taking part in the Russian plan to develop "world class" ski resorts in the region around Mount Elbrus, Mamison in North Ossetia, Matlas in Dagestan and Tsori and Armkhi in Ingushetia.
Russia also wants to develop beach resorts along the Caspian Sea in Dagestan, a region that sees almost daily clashes between insurgents and the security forces.
The ambitious plan sees the creation of 1,100 kilometres of ski runs, 102,500 beds and a capacity to receive 172,000 people on a daily basis. The overall cost of the hugely-ambitious alpine project is estimated at 450 billion rubles ($14 billion).