VEB.RF Finances Ust-Luga’s Gas Chemicals Polyethylene Production Facility
- The loan will be allocated to finance the early phase of the project
State Development Corporation VEB.RF and Baltic Chemical Complex signed a loan agreement to finance the early phase of the project to build the largest Russian gas chemicals facility next to the sea port of Ust-Luga (Leningrad Region). The total capacity of the gas chemicals facility will be up to three million tonnes of polyethylene per annum.
VEB.RF’s loan will be allocated to finance FEED, advance payments under license agreements and subcontracts, including long lead items and other project related expenses.
Financing will be allocated in instalments matching the project’s schedule milestones. VEB.RF financing the early stage of the project will improve significantly credit and investment ratings of the project, which is important to attract other Russian financial institutions, international ECAs and banks.
RusGasDobycha’s CEO Konstantin Makhov said: “We are creating an unprecedented industrial cluster. It will be the largest in Russia. The vertical integration of gas supply and treatment in Russia represents a new economic model for the gas industry. The facility may export its products to Europe, Asia, India, and China. It is a large scale project. The construction phase alone required more than 25 thousand specialists. The start-up of Phase 1 is scheduled in 2023-2024. The full ramp-up will be in 2025. More than five thousand new highly qualified jobs will be created to operate the facility.”
VEB.RF’s First Deputy Chairman and Member of the Board Nikolay Tsekhomsky said: “Today, it is the largest greenfield project with 100% export potential in VEB.RF’s portfolio. As a development institution, we see that it is important to offer financial leverage to the project which will build the largest gas chemicals facility in the world and make Russian products more competitive in the global market.”
Sovcomflot and VEB.RF Sign Financing Agreement for Construction of Pilot LNG Carrier at Zvezda Shipyard
SCF Group, the VEB.RF Group and the Zvezda shipyard formally agreed to finance the construction of a pilot LNG carrier at the Zvezda. The carrier will be time chartered by Novatek for Arctic LNG 2 project.
The ice class (Arc7) will enable the LNG carrier to be used for year-round navigation in challenging ice-bound conditions. The carrier is designed to navigate without an icebreaker escort through more than 2-metres-thick ice.
In total, VEB.RF’s Supervisory Board approved financing for 15 carriers of this type. The supply of carriers will be synchronised with the start-up of Arctic LNG 2.
“It is the seventh vessel to be built by the Zvezda under a loan facility signed here. The vessels will be leased by Sovcomflot. VEB.RF’s governing bodies approved participation in the financing of 21 tankers. The growth of the shipyard’s portfolio will enable our partners to keep localising their manufacturing,” VEB.RF’s Deputy Chairman Artyom Dovlatov said.
VEB.RF and the African Export-Import Bank (Afreximbank) signed a master agreement for VEB.RF’s participation as a confirmation bank in Afreximbank’s Trade Confirmation Guarantee Programme. The agreement was signed at the Russia-Africa Economic Forum in Sochi.
The document was signed on behalf of VEB.RF by its Deputy Chairman Daniil Algulyan and on behalf of the African Export-Import Bank by its Executive Vice President Amr Kamel.
“Providing export support and promoting Russian goods, work and services to open up new markets are high on VEB.RF’s list of priorities. African countries have tremendous potential to develop economic partnerships with the Russian Federation. The VEB.RF Group now has an anchor partner in this area of cooperation. It is Afreximbank. We’ve joined Afreximbank’s Trade Confirmation Guarantee Programme as it will enable us to use Afreximbank’s guarantees to mitigate the risks involved in trade financing transactions with local African banks,” Daniil Algulyan said.
“By signing the agreement, Afreximbank will strengthen its support for Russian companies with a presence in Africa,” Amr Kamel commented.
The African Export-Import Bank (Afreximbank) is a development bank mandated to promote intra- and extra-African trade. In December 2017, Russian Export Center on behalf of Russia became a shareholder of Afreximbank.
The bank is headquartered in Cairo and has regional offices in Cote d’Ivoire, Nigeria, Kenya and Zimbabwe. The bank’s rating: Baa1 (Moody’s), BBB- (Fitch), BBB+ (GSR). Founded in 1993. Authorised share capital: USD5bn. As at the end of 2018, the bank’s total assets were USD13.4bn.
Russia-Africa Summit: Memorandum of Cooperation Signed by VEB.RF and Russian Export Center to Build Republic of the Congo Pipeline
At the Russia-Africa summit, VEB.RF, Russian Export Center, Afreximbank and Société Nationale des Pétroles du Congo (SNPC) signed a memorandum of cooperation to build a pipeline in the Republic of the Congo. The pipeline will connect the deep-water port of Pointe-Noire to the Maloukou terminal and the Lutete intermediary terminal.
“Export support and the promotion of Russian goods, work and services in entering new markets, including Africa, are high on VEB.RF’s set of priorities. The African markets are promising for future trade and economic cooperation and, primarily, increases in Russian exports. Afreximbank has become the anchor partner for the entire VEB.RF Group in this work. As a shareholder of this bank, we were able to reduce risks for the Russian companies. When evaluating projects in African countries, we can also rely on Afreximbank’s expertise,” VEB.RF’s Deputy Chairman Daniil Algulyan said.
“The construction of the pipeline in the Republic of the Congo not only will help to resolve most problems of this region of Africa in respect of providing petroleum products, but also will make a considerable contribution to economic growth in several countries experiencing an acute shortage of high-quality and affordable energy resources. Russian companies have gained extensive experience and technologies in the construction of petroleum pipelines in difficult climatic conditions and are pleased to share them with the African partners,” Russian Export Center’s Senior Vice-President Nikita Gusakov commented.
It is noteworthy that, upon construction, the pipeline will be able to transport a wide range of petroleum products, including petrol, diesel fuel and jet fuel. In addition to the Republic of the Congo, the ultimate consumers of petroleum products will be the Democratic Republic of the Congo and the Central African Republic, which will have a significant effect on the economic development of these countries.
The implementation of one of the largest infrastructural projects in Congolese history will take three years. The estimated capacity of the pipeline will be 2.1 million tonnes per year, and the period of pipeline operation will be at least 40 years.
USD5Bn Agreement Signed by VEB.RF, Russian Export Center, Sberbank and Gemcorp Capital LLP
At the Russia-Africa summit, VEB.RF, Sberbank, Russian Export Center and Gemcorp Capital LLP signed a framework agreement to create a trade finance mechanism for Russia and Africa. The agreement value is five billion US dollars, reflecting the needs of Russia and Africa for joint financial solutions.
The agreement is aimed at developing cooperation with African countries through the organisation of lending mechanisms for joint foreign trade projects and opens up opportunities for increasing Russian exports through financial support for the supply of Russian goods to the African continent, including to Angola, Ethiopia, Mozambique, Zimbabwe and other African countries.
“Support for Russian non-energy exports is a priority for the VEB.RF Group. At present, VEB.RF’s portfolio of support for Russian exports to African countries exceeds 2 billion US dollars. We are ready to help Russian companies to promote their goods and services in this market. VEB.RF is currently considering several transport development projects, including railway projects. Projects for the supply of domestic equipment for industrial production are in the pipeline. Our focus areas can include energy, chemicals, mining, pharmaceuticals, healthcare and education. Afreximbank is one of our key partners in the continent,” VEB.RF’s Deputy Chairman з Daniil Algulyan said.
Andrey Slepnev, CEO, Russian Export Center: “The mechanism will allow us to adequately mitigate the risks associated with organising trade with countries, including important supplies to the international community. For our part, we intend to involve at least ten countries in this mechanism and, with their help, open a trade corridor to the African continent. For Russian business, this affords a unique opportunity to systematically replicate the project in the region and gain a foothold in one of the most promising and dynamic markets in the world, opening it for high-technology domestic exports.”Alexander Vedyakhin, First Deputy Chairman of the Executive Board, Sberbank: “The agreement is aimed at creating infrastructure for promoting Russian exports to African countries and providing financing for the supply of Russian goods to the African continent. Sberbank, together with the VEB.RF Group, Gemcorp Capital LLP and Russian Export Center, has plans to provide financial and advisory support for projects of Russian exporters supplying domestic products from various industries: engineering, agriculture, fertilizers and pharmaceuticals. In recent years, Russian exports to African countries have shown sustainable growth, and due to insurance support from Russian Export Center, loans will become more affordable for Russian exporters and their foreign partners.”
VEB.RF Group to Provide Support for Russian Equipment Exports for Morocco’s Petroleum Refinery
VEB.RF, Russian Export Center and Morocco’s MYA Energy (part of Marita Group) will explore the possibilities of financing the construction of a petroleum refinery in the Kingdom of Morocco with an annual capacity of five million tonnes. The memorandum of cooperation was signed during the Russia-Africa Economic Forum in the presence of Morocco’s Minister of Energy and Mines Aziz Rabbah.
The document was signed by Daniil Algulyan on behalf of VEB.RF, Senior Vice-President Nikita Gusakov on behalf of Russian Export Center and Moulay Youssef Alaoui on behalf of Morocco’s MYA Energy.
“The project will be financed on an inter-bank lending basis. VEB.RF is willing to provide funding for Morocco’s partner to buy equipment and services from Russian counterparties. The direct lender of the project’s company will be a bank of the Kingdom of Morocco,” Daniil Algulyan explained.
“Egypt, Algeria and Morocco are still the largest African countries in terms of total Russian exports. These top three countries account for more than 70% of all Russian exports to Africa, with their priorities remaining to be long-term cooperation with the partners willing to invest in technology while promoting industrial development in the African continent. And Russia maintains a competitive edge here. The African partners can be provided with both technology and expertise in the construction of pipelines and petroleum refineries,” Nikita Gusakov commented.
The refinery will make petrol, Euro 5 diesel fuel, jet fuel, Euro 4 engine fuel and bitumen. At present, Morocco imports about 90% of energy products totalling nearly 10 billion US dollars per year.
MYA Energy is a private company founded by the Government of Morocco for project implementation and support and is part of a multipurpose holding company, Marita Group, engaged in real property development, theme parks, renewable energy sources, cork production and electric vehicles.
VEB.RF to Provide Financial Support for KAMAZ Products Supplied to Turkmenistan
VEB.RF is to provide financial support for the supply of KAMAZ products to Turkmenistan. The plans include supplying 2,000 units of KAMAZ equipment, including 800 dump trucks, 300 high-sided trucks and special-purpose utility vehicles.
“VEB.RF took the decision to provide financial support for the supply of KAMAZ products in October 2019. Support for such a systemically important company as KAMAZ in increasing Russian exports is a priority for VEB.RF,” VEB.RF Chairman Igor Shuvalov said.
KAMAZ and Turkmenistan agreed on the supply of equipment in June 2019.
KAMAZ exports its products to the CIS, Asia, Eastern Europe, Africa and Latin America.
KAMAZ is a leading global manufacturer of heavy trucks and diesel engines. The company has 11 large truck factories and auxiliary facilities.
VEB.RF Supports Integration Projects Worth 64 Billion Roubles in EAEU Member Countries
VEB.RF carries out integration projects in the EAEU member countries with a commitment in the amount of roubles equivalent to 64 billion. The projects include the export of Russian products, including those using leasing mechanisms. For instance, rail transport supplied to Kazakhstan, industrial products supplied to Armenia, underground carriages, cranes, railway equipment, metal products and chemical products supplied to Belarus, and financing for the construction of the Belarusian nuclear power plant.
“VEB.RF traditionally maintains partnership relations with banks from EAEU member countries, and the Eurasian Development Bank. The EDB is also a partner bank of VEB.RF in the project financing factory. VEB.RF has now provided support for integration projects in EAEU member countries in the total amount of roubles equivalent to 64 billion, mostly in transport on a leasing basis. I am confident that new projects in partnership with the EDB will make a significant contribution to trade and economic relations among EAEU member countries,” VEB.RF’s Deputy Chairman Artyom Dovlatov commented.
Today, at the 4th International Forum of the Eurasian Partnership in Yerevan, VEB.RF’s Deputy Chairman Artyom Dovlatov met with the Eurasian Development Bank’s Board Chairman Andrey Belyaninov. They discussed cooperation on projects in EAEU member countries to expand trade and economic relations among EAEU member countries, including logistical transport.
As part of export support, VEB.RF implements major leasing projects in Kazakhstan to sell Russian-made products. Since 2014, Russia has supplied about 12 billion roubles’ worth of products to Kazakhstan.
The value of Kazakhstan potential leasing projects for 2020–2021 is about 2 billion roubles. They concern railway vehicles and the extraction and processing of minerals.
The business model of leasing operations in Belarus is focused on the implementation of major projects to support Russian exports, including under VEB.RF export support programmes. Since 2018, through VEB.RF’s leasing mechanism for Belarus, support for Russian-made products supplied to Belarus has exceeded 3.3 billion roubles.
VEB.RF provided about 4.4 billion roubles through Belarusbank to finance the supply of Russian industrial products, including underground carriages, cranes, railway equipment, metal products, chemical products etc.
With a limit of 500 million US dollars, the Belarusian nuclear power plant received financing of 400.84 million.
The potential leasing projects in Belarus for 2020–2021 total about 10.7 billion roubles, focusing on the supply of railway equipment (3.9 billion roubles), aviation equipment (3.2 billion roubles) and manufacturing improvements (3.6 billion roubles for BelAZ and Grodno Azot).
VEB.RF’s financing for Russian-made products supplied to Armenia through Ardshinbank is about 2.3 billion roubles.
First Tranche Provided by Lending Banks to Finance KuibyshevAzot’s High-Tech Project
The lending banks, VEB.RF and Gazprombank, have provided a syndicated loan to finance KuibyshevAzot’s project to build a production facility for K-grade sulphuric acid and refined oleum in Tolyatti.
Implemented under the Project Financing Factory programme, the project is aimed at supplying raw materials, increasing existing the capacity and maintaining the competitiveness of Russia’s only import-substituting process chain, from caprolactams and polyamides to threads and fabrics. When completed, the project will provide the company with feedstock necessary to increase the production of caprolactams and polyamides, which will also ultimately have a positive impact on the national project to promote non-energy exports.
“The Project Financing Factory mechanism is used to finance high-technology domestic industries that are consistent with VEB.RF’s priorities. VEB.RF invested 3.8 billion roubles in the Tolyatti project, VEB.RF’s share in the syndicate is 2.5 billion roubles. The Tolyatti project is one of the first ones approved under the Factory programme. We offered a comprehensive solution to finance the project: in addition to a loan, VEB.RF is a shareholder of the special purpose entity,” VEB.RF’s Deputy Chairman Yuriy Korsun said.
“To provide financing for investment projects in the chemical industry is one of the main areas of Gazprombank’s project financing, and KuibyshevAzot is one of the leading companies in this sector. Such a combination of financial and industrial expertise allowed us to prepare a high-quality deal, well structured, acceptable to the banks and the borrower. This result is also largely due to the tools offered by VEB.RF under the Project Financing Factory programme. As exemplified by this project, the Factory substantially boosts Russia’s potential for project financing and has a positive impact on economic development,” Gazprombank’s Deputy Chairman of the Management Board Alexey Belous said.
“The project is aimed both at increasing our export potential and at tackling the issue of import substitution. KuibyshevAzot products are supplied for the production of plastic films, automotive components, household appliances, special-purpose uniforms, sports equipment, tyres and consumer goods. Russian customers as well as foreign importers. The feedstock received from external suppliers is not enough. In addition, the construction of the new production facility using advanced technologies will increase the competitiveness of the entire process chain. Most importantly, we use resource-saving processes ensuring a high level of industrial and environmental safety,” KuibyshevAzot’s Director General Alexander Gerasimenko said.
KuibyshevAzot is a leader in the chemical industry, a major manufacturer of caprolactams and polyamides in Russia and one of the country’s ten largest nitrogen producers. Russia’s only producer of textile-grade polyamide 6. The company’s capex programme is 84 billion roubles.
First Tranche Provided to Finance Phase 3 of Tula Region Methanol Production
Under the Project Financing Factory programme, financing was provided for the construction of the third phase of methanol production with a capacity of 500,000 tonnes per year in the Tula Region. The project initiator is Shchekinoazot. The first tranche of the syndicated loan is intended for the purchase of Russian-made equipment. The syndicate agent is VEB.RF.
The total project value is 22 billion roubles; the planned term of financing is 12 years.
“VEB.RF’s total commitment in the syndicated loan is up to 4.5 billion roubles. For the rouble-denominated tranches, we have a government subsidy offsetting any increases in the key interest rate throughout the loan term. The project is in accordance with the May presidential decree in respect of promoting non-energy exports. The project implemented in the Tula Region will have a positive impact on the national chemical industry,” VEB.RF’s First Deputy Chairman – Member of the Management Board Nikolay Tsekhomsky said.
“Shchekinoazot has been our long-standing and reliable partner since 2010. We systematically and successfully develop our cooperation. The financing under the Project Financing Factory programme will allow Shchekinoazot to gain an additional competitive edge by reducing the risks that the interest rate may be raised and that the term of financing may be increased during the implementation of the project. The syndicated loan from the financial partners is aimed at paying for construction and installation and for the purchase of Russian-made equipment. VEB.RF provides tranche A, and Gazprombank provides tranche B. Gazprombank’s commitment in the syndicated loan is 10 billion rubles,” Gazprombank’s Deputy Chairman of the Management Board Alexey Belous said.
The project is the third phase of the comprehensive programme to increase methanol production on Shchekinoazot’s production site in the Tula Region, which will enable the company to become one of the largest producers and exporters of methanol in Russia.“On 7 September 2018, on the day when we launched the second phase of methanol production, namely Methanol-450/Ammonia-135, we formally started a new project of Shchekinoazot, Methanol-500,” Shchekinoazot’s Finance Director Andrey Tokarev said. “Work at the facility is now in an active construction phase. Production is scheduled to start in 2022. This will allow Shchekinoazot to produce a total of 1.5 million tonnes of methanol per year. Methanol is in demand in the global and domestic markets. Capacity utilisation in Russia is currently high. Shchekinoazot will have production meeting the world’s highest environmental and energy conservation requirements. The Project Financing Factory is an effective mechanism to support manufacturers, contributing to the timely implementation of our plans to develop the facility and the industrial sector. We are grateful to the financial partners for supporting the project and providing the first tranche of the syndicated loan.”
Twenty New-Generation Underground Carriages Sent from Moscow to Tashkent
VEB.RF has provided financing for the project to supply modern Russian underground carriages for the Tashkent Metro. An official ceremony took place today to mark the supply of carriages to Tashkent. The rolling stock was made by Moscow-based Metrovagonmash (part of Transmashholding, a leading manufacturer of railway vehicles in Russia and the CIS).
The loan agreement to finance the supply of carriages and provide ancillary equipment and services for the Tashkent Metro was signed by VEB.RF and the National Bank of the Republic of Uzbekistan for Foreign Economic Activity (NBU) in late May 2019 in the presence of the Russian and Uzbek heads of state, Dmitry Medvedev and Abdulla Aripov.
“With the support of the NBU, VEB.RF finances the implementation of a significant export project to supply modern carriages for the Tashkent Metro. Apart from the loan of 19.62 million euros given to the Uzbek partner, VEB.RF has issued guarantees of 25 million euros to secure Metrovagonmash’s obligations under a contract of 27.65 million euros. Support for the export of Russian high-technology products is high on VEB.RF’s set of priorities. The Russian and Uzbek financial institutions have already invested a total of over 200 million euros in projects implemented in the republic,” VEB.RF’s Deputy Chairman Daniil Algulyan said.
“The principal goal of Transmashholding is to be as close to the customer as possible, to be perfectly knowledgeable about its operational aspects and to be ready to make an offer technologically and economically efficient to the largest extent possible,” Transmashholding’s Deputy CEO for Urban Transport Development Andrey Vasilyev said.