VEB.RF has achieved early the key targets of its Strategy 2021 and implemented the chief principles of Business Model 2024 scheduled for 2019 - 2020. By mid-2021, VEB.RF will develop VEB.RF’s Strategy 2025 and strategies for its new umbrella development institutions to ensure consistency with the reform of development institutions.

As part of the Strategy, VEB.RF financed projects for a total of
USD 23bn

VEB.RF’s 2021 Strategy was approved by VEB.RF’s Supervisory Board on 21 December 2016.

From 2017 to 2020, VEB.RF financed priority projects and transactions for a total of USD23 bn. Including USD6,4bn worth of loans and guarantees to export projects, and USD6,6bn in anti-crisis sureties as part of the Russian Government’s prompt measures to support the economy.

Including co-financing
> RUB3tn

Including co-financing, VEB.RF provided a total of over USD39,8bn in project financing vs. USD18,6bn roubles in accordance with the Strategy.

Key targets of the Strategy achieved before 2021

Target 2017-2021 Strategy 2017-2020 Forecast (as per the Strategy) Achievement percentage (as per the Strategy) 2017-2020 Forecast (considering guarantees and bailouts) Achievement percentage (considering guarantees and bailouts)
Total financing¹, USDbn4 10,2 9,8 95% 16,6 162%
Share of financing in line with the government’s priorities, % 70% 75% 107% 84%³ 120%
Export support (loans and guarantees issued), USDbn4 6,7 6,4 95% 6,4 95%
Functions of the government-controlled asset manager², target index 2 1 Above target 1 Above target
  1. The value includes debt and equity financing for VEB.RF’s projects. The value depends on special-purpose public financing and interest rate subsidisation, excluding financing from the REC Group.
  2. “2” means that a positive yield on invested pension savings is achieved, but less than inflation rate + 1%. “1” means that a yield on investments is 1% higher than the inflation rate.
  3. It is understood that bailouts fall within government priorities specified in KPIs.
  4. RUR/USD = 75,47 (26.11.2020)

VEB.RF has been successful as an agent for the Russian Government and as the government-controlled management company for pension savings.

VEB.RF has implemented all strategic initiatives of Roadmap 2017-2021 and a large-scale reorganisation to improve the efficiency:

VEB.RF has optimised its organisational chart and rightsized its staff

  • The headcount rightsized 3.3 times vs. mid-2018

VEB.RF has stabilised the portfolio and decreased distressed assets

Key business processes and products have been improved

  • VEB.RF launched the Project Financing Factory to finance investment projects raising private investments and syndicated loans
  • VEB.RF launched a product platform to manage guarantees and perform documentary operations of the same type to implement development projects in Russia

VEB.RF improved its financial stability to accomplish priority development objectives

  • In 2019, the National Council for Financial Stability acknowledged VEB.RF’s financial sustainability
  • The Bank of Russia acknowledged VEB.RF’s special status (similar to Public Sector Entity), thus enabling VEB.RF to ease pressure on the capital and implement more projects

At the end of 2018, VEB.RF’s Supervisory Board approved VEB.RF’s Business Model 2024 in addition to the Strategy 2021. At the end of 2020, VEB.RF’s Supervisory Board resolved to update VEB.RF’s key strategic operating principles which underpin the Business Model.

The key priority of VEB.RF is to support the Russian Government in achieving the National Development Goals for the Period Until 2030 and the targets set by the President of the Russian Federation in Decree No. 474 of 21 July 2020 “On the National Goals and Strategic Objectives of Development of the Russian Federation for the Period Until 2030”. The key objective pursued by VEB.RF is to combine public and private resources for Russia’s breakthrough development, improving standards of living and creating comfortable living conditions.

In 2019-2020, VEB.RF achieved the main expected outcomes of the Business Model in accordance with the key principles.

Maximising the positive impact on attaining the national goals and economic development

VEB.RF is maximising its contribution to the development of economy by focusing on priority investment areas in accordance with the Business Model and by attracting commercial banks to co-finance projects.
  • VEB.RF overachieved its lending targets by extending more than USD17bn in total (including USD6,6bn in crisis-fighting guarantees as instructed by the Russian Government)
  • One rouble invested by VEB.RF attracts on average circa four roubles from investors and commercial banks which is two times more than assumed in the Business Model

Working without competition with commercial financial institutions

VEB.RF does not compete with commercial banks:
  • VEB.RF finances projects that commercial banks are not ready to embark upon alone (projects at early stages, with regulatory uncertainty, in new industries, with novel technologies, and complex structure) through syndicated lending;
  • VEB.RF assigns loans to commercial banks when projects go from the investment stage into operations;
  • Loans at 8.5% p.a or lower account for 80% of VEB.RF’s portfolio. Such loans are not attractive for commercial banks. Also commercial banks are reticent to lend to projects with higher risks or to certain kinds of borrowers/projects;
Project Financing Factory is the most the successful instrument to attract commercial banks. The Project Financing Factory hedges against key rate increases, does not require subsidies when the inflation rate is below 4%, and offers solutions not available to commercial banks (for example, Tranche B for interest payment at the project’s investment stage).

Financial resilience

Scaling up way beyond VEB.RF’s capabilities, the amount necessary to support the national economy, and impeded access to cheaper funding sources make it harder to achieve break-even performance for the entire portfolio. This is why broader government support is required to bail out or hedge at least partially projects of nationwide significance.

Compliance with the principles of sustainable development

Priorities of VEB.RF’s New Development Strategy

The key priority of VEB.RF’s new Strategy is to support the Russian Government in achieving the National Development Goals for the Period Until 2030 and the targets set by the President of the Russian Federation in Decree No. 474 of 21 July 2020 “On the National Goals and Strategic Objectives of Development of the Russian Federation for the Period Until 2030”.

VEB.RF will consolidate public and private investment to ensure breakthrough development of the Russian Federation, to improve the quality of life of Russian families, to create comfortable living and working conditions in Russian cities and towns, to harness digital competencies through new technological and digital products which maximise the quality of urban life.

Achievement of the National Goals: VEB.RF’s Role

VEB.RF’s intends to focus on maximising financial and non-financial support to development projects and projects of nationwide significance by including but not limited to broadening its range of support instruments. VEB.RF coordinates development institutions and improves their efficiency. VEB.RF acts as an agent for the Russian Government and the government-controlled management company for pension savings.

VEB.RF Operation Principles

Maximising the positive impact on economic development

  • Priority to projects with the greatest multiplying effect for the economy;
  • Active involvement of financial institutions in co-financing.

No competition with commercial financial institutions

  • Increasing the project’s appeal for commercial banks;
  • Non-development of standard banking products (deposits, retail banking).

Financial resilience

  • Involving in projects of state dimension subject to affirmative decisions on required subsidies and capital, or including such projects in a separate balance sheet;
  • Maintaining capital adequacy ratio at the market level (no less than 11%);
  • VEB.RF may be released from delivering positive financial results in the medium term (1 to 3 years).

Compliance with the principles of sustainable development

  • Developing responsible financing practices;
  • Promoting sustainability principles;
  • Introducing green finance standards.

VEB.RF’s Strategic Goals 2025

VEB.RF’s role as the driver of economic development is intensifying. By the end of 2025, VEB.RF is expected to invest up to ten trillion roubles (including co-financing) into development projects.




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