VEB.RF and Gazprombank to Provide Financing for Research Reactor Construction

24 december 2019 года

VEB.RF, Gazprombank and the International Research Center based on the MBIR reactor (IRC MBIR) (part of ROSATOM) have agreed on the terms and conditions of financing for the project to construct a multipurpose research reactor (MBIR).

The project totalling almost 80 billion roubles is aimed at building a unique research facility with a fourth-generation fast-neutron reactor at Dimitrovgrad, Ulyanovsk Region. The MBIR reactor is designed to help Russia to preserve and develop its nuclear research capability. The research reactor will be used to create and test new materials and nuclear technologies. IRC MBIR will be contracted by Russian and international companies to carry out irradiation experiments and post-irradiation tests.

VEB.RF and Gazprombank will provide a total of over 20 billion roubles in project financing under the Project Financing Factory programme. In addition to debt financing, the MBIR project is to use equity financing. The transaction has already received approval from the Supervisory Board of VEB.RF.

“Nuclear power is an excellent example of high-technology industries where the Russian Federation can definitely be viewed as a world leader. The Project Financing Factory mechanism using long-term syndicated lending is ideally suited for such large-scale and capital-intensive initiatives,” VEB.RF’s Deputy Chairman Daniil Algulyan said.

“We will help to build a facility that is of not only scientific but also strategic importance for the country. I am confident that by financing the large-scale high-technology project, we help Russian science as a whole to increase its potential. Additionally, this transaction will allow us to raise to a new level our significant cooperation with VEB.RF and ROSATOM,” Gazprombank’s Executive Vice President Alexander Ushkov said.

“Signing the financing agreement for the project to construct the research facility with a multipurpose fast-neutron reactor is consistent with ROSATOM’s strategy to create the International Research Center based on the MBIR reactor. An important aspect is that ROSATOM’s largest scientific project is attractive to investors such as these leading Russian banks,” IRC MBIR’s CEO Sergey Pastukhov commented.

Launched under the federal targeted programme New Generation of Nuclear Power Technologies for 2010–2015 with Long-Term Plans Until 2020, the MBIR project is designed to renew ROSATOM’s research reactors and aimed at helping Russia to continue to be a leader in nuclear research.


First Tranche Paid by VEB.RF to Finance LNG Carrier Construction at Zvezda

17 december 2019 года

VEB.RF has paid the first tranche to the Zvezda shipyard to finance the construction of the pilot LNG carrier under the Arctic LNG 2 project.

The gas tanker (ice class Arc7) is designed to transport LNG on a year-round basis in the ice-bound conditions of the Kara Sea and the Gulf of Ob. The ship has the ice-breaking capability to navigate in ice with a thickness of more than 2 metres.

The LNG carrier is to be leased to Sovcomflot. NOVATEK has already signed a long-term contract with Sovcomflot to charter the ship under the Arctic LNG 2 project.

Overall, financing for 15 gas tankers received approval from the Supervisory Board of VEB.RF. They will be supplied when Arctic LNG 2 begins operation.

The shipyard’s larger business portfolio will provide the basis for implementing the presidential decree aiming to create a cluster of shipbuilders in the Russian Far East, increase the local content of Russian-made products, build medium- and large-sized vessels, and manufacture marine equipment in order to promote the Northern Sea Route and develop Arctic hydrocarbon deposits.

“The first tranche paid for the pilot LNG carrier is 66 million US dollars, or an amount equivalent to about 4.2 billion roubles. This year, VEB.RF has already disbursed an amount equivalent to over 9 billion roubles in total to finance the construction of four tankers at the Zvezda shipyard. Support for Russian shipbuilding is a strategic area of VEB.RF’s activities. Financing for the construction of tankers at Zvezda is a substantial contribution to promoting high-tech production and increasing the local content of Russian-made products in the Far East,” VEB.RF’s Deputy Chairman Artyom Dovlatov commented.


Financial Documents Signed for Central Ring Road Project Phase 4

13 december 2019 года

Financial documents for Phase 4 of the Moscow Region’s Central Ring Road (CRR) construction project were signed on 12 December 2019. The syndicate consisting of Gazprombank, Sberbank, the Eurasian Development Bank (EDB) and VEB.RF formalised its arrangement with South-Eastern Highway LLC to lend a total of 35.8 billion roubles for 17 years.

South-Eastern Highway LLC is a special purpose entity created by the Avtoban Group and the Russian Direct Investment Fund (RDIF) to carry out the CRR-4 project. Apart from the Avtoban Group and RDIF, the project also involves financial sponsors—the EDB, VEB.RF and InfraVEB—providing 4.1 billion roubles in subordinate financing for 20 years.

Nikolay Tsekhomsky, First Deputy Chairman – Member of the Management Board, VEB.RF: “Support for major infrastructural projects is high on our list of priorities. In the arrangement, VEB.RF will join the syndicate of senior lenders and provide a portion of subordinated debt as a financial sponsor for the project. Our participation made it possible to finalise the financing structure required by the concession agreement, which is essential to the smooth implementation of the project.”

Konstantin Pesotsky, Senior Managing Director of Structured Lending Products, Sberbank: “We are very honoured to participate in financing the country’s biggest transport infrastructure projects. When put into operation, the Central Ring Road can be a driver of economic growth in Russia, because this highway will considerably speed up the movement of people and goods in the Moscow Region.”

Pavel Brusser, Executive Vice President and Head of Infrastructure & PPP Projects, Gazprombank: “The syndicate of Russia’s largest banks, along with international financial institutions and the Russian Direct Investment Fund, will participate in the project by providing the financing necessary to keep to a tight construction deadline. The syndicate has experience of implementing a similar project, namely Phase 3, which will allow the project risks of the concession to be managed effectively.”

Timur Abdullakhanov, Managing Director and Head of Transport and Infrastructure, EDB: “This is a transport infrastructure project, belonging to a sector that we view as a priority. The project will promote cross-border transport through the Western Europe-Western China transport corridor. For instance, the Phase 4 road is immediately adjacent to the Western Europe-Western China highway and is connected to the M-7 Volga highway and farther to the border with Kazakhstan. The project not only contributes to interregional economic integration between Moscow and neighbouring areas and, in a wider context, across Russia’s transport system in general, but also helps the EDB member countries to increase their transit potential in Eurasia in the long term.”

The concession agreement was signed by Russian Highways, on behalf of the government, and South-Eastern Highway LLC on 2 June 2017. The CRR-4 project includes the financing, construction and operation of a 96.5-kilometre road section. The Phase 4 road is to run in the south-east of the Moscow Region, 50 kilometres from the Moscow Ring Road, through the Noginsk, Pavlovsky Posad, Voskresensk and Ramenskoye Districts and the municipalities of Elektrostal and Domodedovo.

The route is from the M-7 Volga federal highway (km 0 of the A-113 Central Ring Road) to M-4 Don. The predicted average daily traffic for 2030 is 40,300 vehicles. The design speed is 140 km/h. The first construction stage includes four lanes (two in each direction).

Phase 4 consists of 17 bridges and wildlife crossings, 40 flyovers and nine elevated structures. The project uses six grade-separated junctions for the following roads: M-7 Volga, Moscow Smaller Ring Road, Yegoryevskoe Highway, Moscow Smaller Ring Road–Chechevilovo–Moscow Greater Ring Road, M-5 Ural, Vostryakovo–Obraztsovo (access to Domodedovo Airport), M-4 Don.

The Central Ring Road (CRR) is of vital importance for the Moscow Region. The CCR project consists of five phases, each of them can be fully functional as an independent investment project. Phase 3 and Phase 4 are built under the concession agreements signed by Russian Highways with Motor Road Construction Corporation LLC (CRR-3) and South-Eastern Highway LLC (CRR-4).


VEB.RF Group at UN COP 25 in Madrid

12 december 2019 года

On 11 December, at the 25th UN Climate Change Conference (COP 25), the VEB Group held a session on a green approach to urban sustainability. The delegation was headed by VEB.RF’s Deputy Chairman Cesare Ragaglini.

The session was opened by Russian Deputy Minister of Economic Development Mikhail Rasstrigin, speaking about Russia’s main climate change initiatives.

Cesare Ragaglini told the audience about the new role of VEB.RF as a coordinator of development institutions and VEB.RF’s new priorities in urban development, noted the significance of VEB.RF’s involvement in Russian national projects and underlined that they were consistent with the UN Sustainable Development Goals 2030.

According to Ragaglini, VEB.RF shares international concern about climate change. “Russia is a party to the Paris Agreement, ratified in September 2019. In the issue of climate change, countries are so interdependent that any green initiatives in one country will be of benefit to the entire global community,” he said.

VEB.RF’s representatives also emphasised the importance of adopting a practical approach to achieving the UN Sustainable Development Goals 2030. In this connection, Cesare Ragaglini mentioned that a high proportion of projects approved by VEB.RF in 2016–2018 met the green project financing criteria of the International Development Finance Club (IDFC). Additionally, VEB.RF’s representatives described the programme to implement the Environmental Protection national project and presented VEB.RF’s participation in the project worth 155 billion roubles to build energy-from-waste plants in the Moscow Region.

The session also noted that the UN Sustainable Development Goals 2030 could not be attained without the adequate development of urban areas, which are home to most people in the world. In this context, DOM.RF presented the results of its efforts to develop and test-operate the Urban Environment Quality Index and the Integrated Territorial Development Standards based on international best practices.

The session took place at the pavilion of the International Development Finance Club. VEB.RF has been actively involved with IDFC since its inception in 2011. The IDFC members are 26 national and regional development banks from Europe, Asia, Africa and the Americas. IDFC traditionally focuses its efforts on the global issues of climate change and the UN Sustainable Development Goals 2030.

About COP 25

The United Nations Framework Convention on Climate Change (UNFCCC) was adopted in May 1992 and entered into force in March 1994. The parties to the UNFCCC are currently more than 180 countries, including Russia, taking joint action to mitigate climate change and greenhouse gas emissions. The signatory nations (Russia signed the UNFCCC in 1994) agreed to implement national climate change programmes, carry out studies and report on their findings.

The Paris Agreement is an agreement signed by 195 UNFCCC members in 2015 to regulate greenhouse gas emissions and curb the increase in global average temperature as part of efforts to reduce global warming.


VEB.RF and Gazprombank to Participate in Creating Russia’s Track & Trace System

9 december 2019 года

The financial institutions will give a syndicated loan totalling 24.2 billion roubles.

VEB.RF, Gazprombank and Operator-CRPT (a subsidiary of the Center for Research in Perspective Technologies (CRPT)) have signed a syndicated loan agreement for 24.2 billion roubles. The loan will be provided through the Project Financing Factory to finance the project to create the Chestny ZNAK track & trace system.

The project is structured as a public-private partnership between CRPT and the Russian Ministry of Industry and Trade. The agreement is the first PPP in information technology and the first federal-level PPP in Russia.

CRPT shareholders will invest more than 220 billion roubles in creating and developing the system over 15 years, with a payback period of seven or more years. This will enable the government to achieve its goals of combating the grey economy and counterfeit goods without budgetary financing.

The syndicated loan is limited to a total of 24.2 billion roubles, with VEB.RF’s commitment of 8.7 billion roubles and Gazprombank’s commitment of 15.5 billion roubles.

“This project is important for the transparent operation of the entire consumer goods sector. Its implementation will make it possible to formulate equal and fair rules for commerce. Consumers will receive reliable protection and will be assured that they buy things coming through distribution channels authorised by the original manufacturer or trademark owner,” VEB.RF’s First Deputy Chairman – Member of the Management Board Nikolay Tsekhomsky said.

“Signing the syndicated loan agreement with Gazprombank and VEB.RF made it possible to achieve financial closure in Russia’s first federal-level public-private partnership project. The project will result in building the Russian track & trace system in important sectors such as the production and sale of pharmaceuticals, milk and consumer goods, as well as substantially reducing the sale of counterfeits,” Gazprombank’s Deputy Chairman of the Management Board Alexey Belous commented.

“We have already created the track & trace system with more than 6 billion unique digital codes for cigarettes, pharmaceuticals, furs and footwear. The number of product categories increased on 1 December, and the system will continue to develop next year. Cooperation with VEB.RF and Gazprombank will improve the operator’s financial flexibility in the next 18 months and create the conditions for the accelerated introduction of new product groups, including dairy products intended for the ultimate consumer,” CRPT’s Chairman of the Board of Directors Mikhail Dubin said.

The project to build the Russian end-to-end track & trace system is scheduled for completion in 2014, covering a wide range of goods. The existing system is used for tobacco products, certain pharmaceutical products, fur coats, tyres, footwear and perfumes. Starting from January 2020, the system will include all pharmaceuticals. As from June 2020, inclusion on the track & trace system will be mandatory, including for dairy products.


Belarusian Government and VEB.RF Agree on Financial Support for Exports to Third Countries

6 december 2019 года

The Belarusian Government, represented by the Ministry of Finance, and VEB.RF have agreed on the terms and conditions of VEB.RF’s support for both Belarusian exports and Russian-Belarusian joint exports to third countries.

The agreement was signed by Minister of Finance Maksim Yermolovich on behalf of the Government of the Republic of Belarus and First Deputy Chairman – Member of the Management Board Nikolay Tsekhomsky on behalf of VEB.RF.

This is the first agreement under the government’s export support programme updated this year. The main changes in 2019 allow the export support mechanism to be used for exports not only to Russia but also to third countries (outside the United State of Russia and Belarus).

“Belarusian manufacturers can now take advantage of the Russian programme to have subsidised loan interest rates for the export of Russian-made components in their end products. Buyers from third countries will, in turn, be able to use the Belarusian programme subsidising interest rates for products imported from Belarus and containing Russian components,” Nikolay Tsekhomsky said.

The agreement between VEB.RF and the Belarusian Government provides for all kinds of soft-term financing involving non-resident banks under the updated programme: direct lending to buyers, interbank lending to the buyer’s bank and post-financing for documentary export credits. The agent bank under the agreement is Bank BelVEB, VEB.RF’s Belarusian-based subsidiary.

“Bank BelVEB initiated changes to the programme specified in Decree 466. Signing the first agreement with VEB.RF was the logical thing to do. This is another important contribution of the VEB.RF Group to the Belarusian economy and the promotion of closer integration with the Russian Federation by developing a financial infrastructure for export support. That is why Bank BelVEB encourages Belarusian exporters to join this unique programme,” Bank BelVEB’s Chairman of the Board Vasily Matyushevsky said.

To receive financing from VEB.RF, Belarusian exporters should use at least 30% of Russian-made components. Financing is offered for up to 5 years.

The agreement will enable Russian and Belarusian exporters to take advantage of a new mechanism helping them to enter the potentially lucrative markets in Latin America, Africa and South-East Asia.


VEB.RF to Provide RUB4.4bn in Lease Financing for Commuter Rail

2 december 2019 года

The VEB.RF Group will provide Central Exurban Passenger Company (CEPC) with lease financing for six EP2D electric multiple units designed to carry passengers, composed of 11 carriages each and made by Demikhovo Engineering Works (part of Transmashholding).

Th total amount of financing will be 4.4 billion roubles.

The electric multiple units will be used by CEPC for its commuter rail services. This will enable old trains to be retired and replaced by modern rolling stock.

The passenger carriages are equipped with comfortable seats for long-distance commuters. Air conditioners and purifiers provide thermal comfort and acceptable air quality, which is especially important in winter.

EP2Ds meet the needs of passengers with disabilities. The carriages are outfitted with ramps and durable safety belts for wheelchairs.

“It is our conscious decision to pay particular attention to cooperation with the regions under the programmes to modernise urban public transit and replace commuter rail systems. Passenger flows, of course, are different everywhere; but this should not affect such socially significant projects. We have already started to finance this deal,” VEB.RF’s Deputy Chairman Artyom Dovlatov commented.


Economic Integration in Greater Eurasia VEB.RF’s Priority for SCO IBA Presidency

1 november 2019 года

The RSK Bank of Kyrgyzstan handed over the presidency of the Interbank Association of the Shanghai Cooperation Organisation (SCO IBA) to VEB.RF.

By tradition, the presiding bank offers a substantive agenda to the partners and organises a business programme to share experience and best practices. Specifically, a seminar for the IBA members will take place on Day 0 of the Russian Investment Forum in Sochi in February 2020, and the BRICS and SCO Joint Financial Forum is scheduled for July 2020.

The agenda proposed by VEB.RF as the presiding bank features topics such as inclusive growth through financing for high-quality infrastructure, and strategic partnership to pursue together the UN Sustainable Development Goals. VEB.RF proposes that its partners should continue expanding the use of national currencies, update the database of joint projects, and find common risk assessment approaches. The agenda also includes discussions on the implementation of new financial instruments such as project financing guarantees.

VEB.RF’s presidency will pay particular attention to developing infrastructure and creating an advanced urban economy. Accelerating urban development is now a key driver of economic growth. VEB.RF is ready to share its expertise and discuss the partners’ experience in this area.

VEB.RF’s Chairman Igor Shuvalov said: “The presidency of the SCO IBA is an important mission for VEB.RF. We believe that our main task is to promote development in Greater Eurasia. It is also important to take into account all integration processes: the creation of the Eurasian Economic Community, the Belt and Road Initiative, and efforts of the Eurasian Development Bank, the New Development Bank and the Asian Infrastructure Investment Bank. Mutual trade and investment, along with joint projects, require closer financial cooperation. We will work together with our partners to contribute to creating a common economic space and developing top-tier infrastructure from the Pacific to the Atlantic.”

For information: The SCO’s Agreement on Interbank Cooperation (Association) was signed on 26 October 2005.

SCO IBA member banks: Development Bank of Kazakhstan, RSK Bank of Kyrgyzstan, China Development Bank, VEB.RF, Amonatbonk State Savings Bank of Tajikistan, National Bank of the Republic of Uzbekistan for Foreign Economic Activity, Habib Bank Limited (Pakistan), India Infrastructure Finance Company.

SCO IBA observers: Eurasian Development Bank, Belarusbank, Development Bank of Mongolia.


Short-Term Exchange-Traded Bonds Issued by VEB.RF

28 june 2019 года

VEB.RF issued short-term bonds in additional placements to companies and corporations on 26, 27 and 28 June 2019.

The Bank raised c. 21.54 billion roubles, including 10.50 billion roubles from bonds with a maturity of 14 days and a coupon of 7.30% p.a., 0.04 billion roubles from bonds with a maturity of 21 days and a coupon of 7.29% p.a., and 11.00 billion roubles from bonds with a maturity of 28 days and a coupon of 7.28% p.a.

The par value of one bond is 1,000 roubles. The bonds were sold at 100% of their par value. The coupon is payable at maturity.

The arrangers of the bond issue are Gazprombank and Svyaz-Bank.

The bonds are on the Moscow Exchange’s Quotation List Level 1. The depository is National Settlement Depository.


VEB.RF Supervisory Board Considers VEB’s Involvement in Three New Investment Projects Totalling About RUB50 Billion

21 december 2018 года

Russian Prime Minister Dmitry Medvedev chaired a meeting of the VEB.RF Supervisory Board at the company’s new office in Vozdvizhenka Street. In his opening remarks he said: “I have signed an ordinance to establish the amounts of the state corporation’s paid-in and callable capital. It is a new mechanism for increasing the capital of development institutions. We have never had it before. It has been devised by VEB and is now fully usable. This is the part of the share capital that can be provided when investment resources are required. We expect to allocate up to 300 billion roubles for this purpose in the medium term.”

The Supervisory Board also considered VEB.RF’s involvement in three new investment projects designed by the reorganised team. The total project value approximates to RUB50 billion. VEB.RF’s expected commitment is RUB26.7 billion.

One of the projects aims to build a new-generation shuttle tanker of 69,000 deadweight tonnes with improved ice performance and manoeuvring characteristics. The Arc6 ice-class tanker is designed to navigate without an icebreaker escort through 1.3-metre-thick ice. It will be used for oil transportation in the Russian Arctic. Vnesheconombank is to invest 18.5 billion roubles in the project.

Two projects in the chemicals sector will be implemented via the Project Financing Factory. VEB is the operator of the Factory. Gazprombank acts as VEB’s financial partner in these two deals.

One of the two projects aims to build a production facility with an annual capacity of 140,000 tonnes of K-grade sulphuric acid and 360,000 tonnes of refined oleum at the KuibyshevAzot production site in Tolyatti. The total investments are estimated at RUB6.3 billion. VEB.RF’s commitment is RUB3.8 billion.

The other project is the Phase 3 construction of a production facility with an annual capacity of 500,000 tonnes of methanol in the Tula Region. The total project value is 22 billion roubles. The project initiator is Schekinoazot. VEB.RF is prepared to invest RUB4.5 billion.

Furthermore, the Supervisory Board reviewed the company’s new business model 2024 to ensure effective risk management and smooth operation in the near five years. In compliance with the business model, VEB does not compete with commercial banks and uses various instruments to participate in projects (guarantees, loans, and equity financing).

The Supervisory Board also addressed the issues of enhancing corporate governance.


InfraVEB to Support Preparation of Kursk Region Projects

6 december 2018 года

InfraVEB (part of the VEB Group) will provide financial support for public-private partnership projects in the Kursk Region, InfraVEB CEO Dmitry Tvardovsky said to a meeting of the Council on Investment Climate Improvement and Investor Relations.

“Project investment without public budget funds is high on InfraVEB’s list of priorities; therefore, we are willing to support the preparation of PPP projects intended for the Kursk Region,” Tvardovsky said. Above all, this concerns municipal economy development projects under concession agreements.

The meeting focused on the Kursk Region’s investment potential, opportunities to carry out investment projects and investment climate improvement.

InfraVEB is part of the VEB Group. The company prepares and supports early-stage investment projects without public investment and provides support for investment- and operation-stage projects. As specified in the Memorandum on Financial Policies of VEB.RF, developing the country’s infrastructure and freeing economic growth from infrastructural constraints are a priority.


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