State Duma Committees Agree to New Legislation on VEB.RF’s Coordination of Development Institutions
The Budget and Taxes Committee and the Financial Market Committee of the State Duma supported new legislation clarifying the functions of VEB.RF. The committees recommended that the Council of the State Duma should introduce it for its first reading in the lower house.
The Russian Government introduced two bills to the State Duma on 31 October 2018, amending the Budget Code, the Law “On Bank for Development” and other laws that regulate the activities of Russian Export Center and Russian Small and Medium Business Corporation.
It is proposed that the budget legislation should include a new mechanism, namely the approved amount of authorised capital. This is the portion of authorised capital that, as resolved by the government, will be allocated to a development institution for new projects.
VEB is assigned the role of a coordinator of development institutions (as resolved by the Russian Government). For this purpose, VEB will participate in managing development institutions and formulate procedures for joint work on projects in order to ensure that instruments of support will be used in an integrated manner.
The draft legislation also concerns the name of Vnesheconombank; the renamed institution will become State Development Corporation VEB.RF. The new name reflects the role of VEB and its tasks assigned by the Russian President and the Russian Government.
The Monotowns Development Fund (MDF) has lent 1 billion roubles to Hevel for an investment project in the single-industry town of Novocheboksarsk, Chuvash Republic. The funds were loaned for eight years at a rate of 5% p.a. In July 2018, the Supervisory Board approved MDF’s financial participation in the project designed to increase the production line annual capacity to 250 MW using Hevel’s Novocheboksarsk-based production facilities. The total project value is 2.8 billion roubles.
Along with MDF, the project is financed by the Industry Development Fund. The project is expected to increase the output of solar modules for the growing domestic market and for the export of finished products. The project will create 90 new jobs. The technology introduced by the Project (renewable energy sources) is on Russia’s critical technology list in compliance with Decree No. 899 of 7 July 2011 ‘On the Approval of Priorities in the Development of Science, Technology and Engineering in the Russian Federation and of the Critical Technology List of the Russian Federation.’
The Monotowns Development Fund is a not-for-profit organisation established by Vnesheconombank in October 2014. The Fund’s objective is to create an environment for new jobs other than with major local employers and to attract investment in single-industry towns through infrastructure and investment projects. The Fund co-finances expenses incurred by Russian constituent entities and municipalities when constructing and rehabilitating infrastructure facilities required for new investment projects, finances investment projects, performs the functions of a project office to develop single-industry towns and organises project management teams to improve the social, demographic and economic status of single-industry towns. The Fund operates in strict compliance with the regulations on the federal budget subsidies as approved by the Russian Government’s Resolution No. 1186 of 11 November 2014.
VEB.RF Delegation Headed by Chairman Igor Shuvalov Visits Shanghai Land Group
During its visit to Shanghai, the VEB.RF delegation headed by Chairman Igor Shuvalov met with Shanghai Land Group, the leader in urban environment and infrastructure development in China’s largest agglomeration.
The problem previously faced by Shanghai was the fragmented, sporadic development of the city districts. This restricted the availability of social services for local residents and caused environmental and traffic problems. The focus of Shanghai Land Group’s current agenda is on integrated territorial development in terms of housing, commercial, road and social infrastructure and environmental compliance. Since 2002, the company has completed 30 major development projects totalling 782 million square metres. The principles behind the company’s operations are those of a development institution: it undertakes long-term projects, which cannot be implemented by market participants alone.
According to Igor Shuvalov, Shanghai Land Group’s expertise in urban economic development may well be applied in Russia by combining the efforts of governmental development institutions and market participants.
Igor Shuvalov Takes Part in 23rd Regular Meeting of Russian and Chinese Heads of Government
VEB.RF Chairman Igor Shuvalov took part in the 23rd Regular Meeting of Russian and Chinese Heads of Government.
During the meeting, Russian Prime Minister Dmitry Medvedev spoke in support of de-dollarisation in trade between Russia and China. Moscow and Beijing are expected in the near future to double mutual trade, which may exceed 100 billion US dollars for the first time in history.
The parties are preparing an agreement to use their national currencies for mutual trade, and the document can be signed before the end of the year, Igor Shuvalov said after the meeting.
VEB’s Krasnoyarsk Territory Wood-Processing Project Presented in Shanghai
VEB’s project to build a wood-processing facility in the Boguchansk District of the Krasnoyarsk Territory has been presented at the China International Import Expo (CIIE 2018). Russia participates in the exhibition as a partner country. The 3D presentation of VEB’s project is available at the stand of the Russian Ministry of Industry and Trade in Russian, Chinese and English. The project comprises a sawmill, a wood pellet plant, a furniture factory, and other production facilities.
About 24 billion roubles has already been injected into the project. The annual allowable cut is 3.2 million cubic metres. The sawmill was put into operation in 2016. Its products are exported to China, Belgium, Italy, the United Kingdom, Turkey, Lebanon, Japan and Germany. The wood pellet plant is under construction, with the start of production expected in December 2018. Currently, the conceptual design of a pulp mill is nearing completion. With China being a target pulp market, the project is exhibited as an investment destination.
Joint implementation of such major initiatives was top of the agenda for the Expo’s plenary session on international cooperation between Russia and China. Zhou Liqun, Chairman of the Union of Chinese Entrepreneurs in Russia, underscored the ‘importance of ongoing interaction’. He believes that the exhibition is an excellent opportunity to present a project as ambitious and attractive to all parties, including Chinese major entrepreneurs and investors.