VEB.RF and BRICS Development Banks to Form Common Approaches to Financing for Infrastructure Projects
State Development Corporation VEB.RF signed a Memorandum on Mobilization of Private Investment in Infrastructure with the BRICS Inter-Bank Cooperation Mechanism.
The BRICS Inter-Bank Cooperation Mechanism will create a working group which will study business cases, financing formats, project selection models and legal innovation success stories which contribute to mobilization of private investment in infrastructure.
The Memorandum will establish a new ICM working group and promote the sharing of best infrastructure PPP practices between key BRICS development institutions.
VEB.RF Chairman Igor Shuvalov said “Currently, we see great interest in PPP projects, primarily in infrastructure projects. It is the global trend, which we are striving to implement to ensure sustainable economic growth. The development banks play a special role. Many banks aggregate PPP competencies. We plan to follow this way in Russia by creating an integrated infrastructure development centre. VEB.RF has extensive experience in mobilization of private investment in major transport infrastructure projects; our state corporation’s portfolio features dozens of sea, land and air infrastructure assets. Under the supervision of the Government and the President’s Executive Office, VEB.RF plays a role in promotion of PPP legal instruments to encourage and mobilize investment.”
As a reminder, VEB.RF will hold the presidency of the BRICS Inter-Bank Cooperation Mechanism in 2020. The BRICS Inter-Bank Cooperation Mechanism members are VEB.RF, BNDES, Eximbank of India, CDB, and DBSA. The BRICS ICM was established in 2010 to promote and strengthen economic and investment cooperation between BRICS countries. Currently, the BRICS ICM has five working groups.
VEB.RF and VTB to Finance Coal Transhipment Facility Construction at Port of Vanino
The project will be carried out under the Project Financing Factory programme.
State Development Corporation VEB.RF, VTB and VaninoTransUgol have signed a loan agreement to finance the project to build a high technology transhipment facility at the seaport of Vanino in the Khabarovsk Territory.
Phase 1 of the transhipment facility will have a capacity of 12 million tonnes of coal per annum. The facility’s commissioning and start-up are planned in 2020. The project will create more than 600 new jobs. Overall potential capacity of the facility is up to 24 million tonnes of coal per annum.
The partner banks will provide 34 billion roubles to the project using the Project Financing Factory’s programme. Under the syndicated loan, VEB.RF will provide financing to cover more than one third of the project’s Phase 1 expenses.
VEB.RF’s First Deputy Chairman and Member of the Board Nikolay Tsekhomsky said: “Investment into state-of-the-art port infrastructure is one of the key priorities of VEB.RF. We would like to thank our esteemed partners and are confident that our joint efforts will have not only positive impact on the Far Eastern economy but also will open more opportunities for Russian exports to the Asia-Pacific Region.”
VTB’s Head of Client Coverage and Senior Vice President Dmitry Snesar said: “Financing for the project to build the high technology coal transhipment facility at the seaport of Vanino is the first port infrastructure financing deal between VTB and VEB.RF under the Project Financing Factory. VTB has extensive experience in financing major infrastructure projects. The construction of VaninoTransUgol’s terminal means new infrastructure to develop further Russian coal export and contribute to the economic development of the Far East.”
VaninoTransUgol’s CEO Yuri Tyamushkin said: “Construction of the terminal’s Phase 1 is at an advance stage. VaninoTransUgol is not only developing the Far Eastern economy and infrastructure but is also actively contributing to the regional infrastructure, including corporate housing, educational establishments support, building a talent pool and establishing high living standards in the Far East.”