Agenda: on opening a credit line to fund the development of the Elginsk deposit, on funding a project to manufacture ammonia, methanol and carbamide in Tatarstan, on the additional capitalization of the Export Credit Agency of Russia (EXIAR).
Transcript:
D. Medvedev: Good afternoon colleagues.
Today, we are holding a meeting of Vnesheconombank Supervisory Board. To tell you the truth our agenda is as always extensive because of VEB’s role in investment policy. As a bank for development it helps to implement various projects in the high-technology sector.
Today, we’ll also identify strategic guidelines of Vnesheconombank’s development and discuss the Bank’s participation in funding a number of infrastructure projects and talk about major construction projects including Olympic ones.
I’d like to highlight several points before we start working in a closed format. First, I’d like to stress that Vnesheconombank has opened a credit line worth 2.5 billion dollars to fund the development of the Elginsk deposit; it’s the world’s largest undeveloped coal deposit in south-west part of Yakutia.
A large-scale project to develop the coal deposit in Yakutia is getting underway. Our objective is to develop a huge potential of our far-eastern regions (and it’s a part of our program of the Far East Development) and of course create modern growth points and highly efficient jobs as well as integrate the Far East into the common economic space. In the long run we should create favorable conditions for improving Far Eastern people’s quality of life.
I’d also like to highlight one more project aimed at funding the production of ammonia, methanol and carbamide in Tatarstan. I’d like to remind you that two and a half years ago the Bank’s Supervisory Board approved the extension of a credit worth 1.6 billion dollars for the construction of this integrated production facility. Nevertheless we need to make some adjustments including increased credit limits. It’s a large-scale interesting project. I hope that advanced energy-saving technologies will be used and that the project itself will be structured appropriately in terms of ecological standards. Negative environment effect should be minimized and products to be manufactured should be competitive and have good prospects for their sale on world markets and of course on our domestic market.
Let’s get down to discussing our agenda.
Internet Portal of the Government of the Russian Federation
After Vnesheconombank’s Supervisory Board meeting VEB Chairman Vladimir Dmitriev answered journalists’ questions
Question: What sort of decision was made on the Elginsk deposit and as a whole on all issues discussed today?
V. Dmitriev: As far as the Elginsk deposit is concerned a positive decision was made on authorizing VEB to fund this project in the amount of 2.5 billion dollars. All basic parameters of this agreement were approved by the Bank’s Supervisory Board, so we are getting down to work.
Question: And on other issues discussed today specifically on EXIAR?
V. Dmitriev: We also made positive decisions on other issues. We made a decision to additionally capitalize EXIAR in the amount of more than 1 billion rubles thus enabling it to increase its capital and conduct insurance transactions through increasing its capital base. We considered several Olympic projects and also made concerted decisions on them related to increased budget upon meeting certain conditions that are in line with decisions made earlier by our Supervisory Board. As far as some facilities are concerned we made decisions to reduce financing budget with a view to economy or to get investors to increase their expenses.
We also discussed several projects related to charity activities. Specifically, we made a decision to extend a bridge-loan worth 250 million rubles to Public Television till next spring when they will be substituted by budgetary monetary funds.
We considered increasing the budget of a project on the construction of a large-scale integrated production facility in Tatarstan, in Mendeleevsk, namely, the Ammonii project aimed at manufacturing ammonia, carbamide and complex chemical fertilizers. This project is unique because it has no analogues in Russia and it was structured in close cooperation with Vnesheconombank’s foreign partners (these are banks from Japan and China). The most advanced equipment is supplied to implement this project making it possible to introduce energy saving technologies as well as technologies that minimize negative environment impact of this project.
We also discussed a number of other projects (we’ll make decisions on them after additional coordination) related to funding individual Russian companies by Vnesheconombank.
This is in general our today’s agenda. As usual decisions are made at a meeting of the working group representing interests of all members of the Bank’s Supervisory Board.
Question: Could you be more specific about the Olympics? There were disagreements between VEB and Sberbank on a ski-jump… Have you discussed this issue and made a decision on it today?
V. Dmitriev: Two ski-jumps will be fully ready and launched in due time. All the decisions were made in a concerted way, so, we don’t see any problems.
Question: How much will funding increase?
V. Dmitriev: Where?
Answer: I mean Olympic projects.
V. Dmitriev: According to our estimates, with regard to the projects we discussed an increase might be from 5 to 10 billion rubles.
Question: What projects are they?
V. Dmitriev: I’ll answer these questions when we have expert examination results from Olympstroi and Olympstroi’s confirmation of increasing budgets of these projects.
Question: Could you tell us in more detail about the Elginsk deposit? You are to provide 2.5 billion rubles.
V. Dmitriev: The Elginsk deposit project is so structured that it’s difficult to keep in mind terms and conditions of it even for a Noble prize laureate. There are several credit lines, different interest rates and different dates.
Question: At the end you said that you discussed funding of individual companies by VEB. What companies do you mean?
V. Dmitriev: I mentioned individual companies not by chance.
Question: Can’t you name them?
V. Dmitriev: No, I can’t.
Question: Did you discuss VEB’s entering Sukhoi company’s capital?
V. Dmitriev: Yes, we did.
Question: What decision did you make?
V. Dmitriev: We’ll enter Sukhoi Company’s capital.
Question: In what amount?
V. Dmitriev: In the amount and on the terms that will not be detrimental to Vnesheconombank’s financial stability.
Question: Excuse me, do you mean the Sukhoi Civil Aircraft (SCA) or some sort of holding?
V. Dmitriev: I mean SCA
Moderator: Thank you. Are there any more questions?
Question: It’s a question about Syria. Does VEB hold Bashar Assad’s money?
Dmitriev: Under the Law “On the Bank for Development” Vnesheconombank does not have the right to hold accounts of natural entities.
Question: US senators made a statement that a number of major Russian banks including VEB allegedly assist in supporting the Syrian authorities, specifically; VEB contributes to making payments on S-300. Is this true?
Dmitriev: Thank goodness, the senators don’t accuse Vnesheconombank of using chemical weapons against civilians. I think that American senators are now looking for all possible excuses to accuse or suspect institutions that are not accountable or subordinate to the American Administration of violating rules and procedures established by the U.S.”. Vnesheconombank c acts in compliance with the Law on the Bank for Development and other Russian laws. And I’d like to stress that as far as international sanctions are concerned Vnesheconombank is strictly observing them.
And another thing, in its capacity as a bank for development Vnesheconombank is the authorized agent for the Government in servicing Russia’s foreign debt. So, under this authority and agreements on repaying Syria’s debt to the Russian Federation under Soviet-era debts, Vnesheconombank is an authorized bank responsible for holding tenders.
Journalists: Thank you very much.
V.Dmitriev: Thank you.
Origin: Internet Portal of the Government of the Russian Federation
The Meeting Summed up VEB’s Performance Results for 2012 and Approved the Bank’s Annual Report
D. Medvedev’s Opening Address:
We are having Vnesheconombank’s regular Supervisory Board meeting today. We’ll review VEB’s performance report for 2012. We have also to deal with objectives associated with major investments in modern high technology projects. There is no doubt that we can’t implement these projects without using development institutions. VEB is our leading development institution – it extended credits in its capacity as a bank for development for an amount of 720 billion rubles as of January 1 of the current year. This is about 200 million more than planned in the Bank’s Development Strategy. Most of the funds worth 670 billion rubles were used to finance large-scale investment projects in above all infrastructure assets, agro-industrial complex, chemical and petrochemical industries. If we add credits VEB extended as a whole, the total amount of funds provided to the economy exceeded 1 trillion rubles.
The most significant projects launched by VEB last year are the following: building Express Am7 satellite, reconstructing the Izhevsk cogeneration plant, constructing crude oil and oil products tankers, developing the Talitsky area of the Verkhnekamsk potassium and magnesium salts deposit and a number of other projects.
These are large-scale projects but we also give high priority to small and medium-sized enterprises and once we geared Vnesheconombank to provide support for small and medium sized enterprises.
VEB provided credits to SMEs for an amount of almost 50 billion rubles and this is about 20 billion rubles more than in 2011. Moreover, the amount of credits VEB extended to Russian exporters increased by two times from 2011. We have created a mechanism that ensures competitive conditions for funding Russian exporters.
At the end of 2012, a subsidy worth 3 billion rubles was transferred to the Bank. For the first time in the modern Russian practice of supporting exports, a target subsidy was provided in line with WTO and OECD standards. These funds are to be used to compensate for interest rates on export credits.
Borrowings were made both on domestic and foreign financial markets. The Bank also raised syndicated loans with the help of a pool of banks. Vladimir Dmitriev (V. Dmitriev is Vnesheconombank’s Chairman) will report on this separately.
And one more theme to mention, VEB has become a full member of the Association of Development Financing Institutions in Asia and the Pacific. I hope that VEB’s membership in this Association will enhance its and Russia’s role in this region as a whole. It’s very important for us to be present there in various ways. V. Dmitriev will report on this in more detail.
I’d like to bring up one more issue, it is of social importance. The program of VEB’s investments in affordable housing construction is being completed. Almost 95% of this program has been carried out. The Bank extended about 88 thousand mortgage loans worth more than 140 billion rubles; more than 3.3 million square meters of living space were purchased. The program embraces almost all regions. Since it was launched in 2010, interest rates have fallen almost to 13% but unfortunately we have to admit that this a very high interest rate anyway, although we took measures to reduce it.
This is a task for the future and of course not only for VEB because credit rates are interrelated with each other and we can’t have a mortgage credit rate of 5% in one bank and 13% in the other. Nevertheless, this is a task for our entire banking system and we discussed the issue repeatedly during our previous meetings. There’s no doubt we need to stimulate demand for economic class housing which should be affordable for the largest categories of population. I believe that we could prolong this program until late 2014. Let’s discuss this at our Supervisory Board meeting.
And finally, we’ll approve the results of the Development Award Contest – these are modern projects, investment programs. 221 applications were submitted, there are laureates and their names are usually declared during the Petersburg Economic Forum. I think the VEB’s Chairman will tell about it separately. This is our today’s agenda and there are many other issues I haven’t mentioned. Let’s work tightly getting to the heart of all matters to be discussed.
Let’s start with approving the Bank’s annual performance report and making a decision on distributing profits generated by Vnesheconombank in 2012.
Origin: Internet Portal of the Government of the Russian Federation
VEB intends to increase its loan portfolio in 2013 at the rates on the level of 2012 and it sees risks in funding
Gorky (the Moscow region), May 28. INTERFAX AFI – Vnesheconombank (VEB) intends to increase its loan portfolio in 2013 at the rates comparable to those in 2012; funding of transactions will be a restraining factor, Vnesheconombank Chairman Vladimir Dmitriev told journalists after VEB’s Supervisory Board meeting.
“We have serious plans for increasing our loan portfolio, we are going to increase it at the rates comparable to those in 2012, the rates are somewhat restrained as we have to fund our transactions and meet capital adequacy ratio”, he said.
Moreover, saying about plans for borrowings in the current year V. Dmitriev said that the Bank intended to make both ruble and foreign currency borrowings. He said that he found it difficult specify dates for implementing these plans.
It was reported earlier that VEB’s loan portfolio before reserves under IFRS in 2012 increased by 21.5% to 1 trillion 691 billion rubles from 1 trillion 392 billion in 2011. The Bank’s loan portfolio after reserves increased by 21.8% to 1 trillion 497 billion rubles from 1 trillion 229 billion rubles. The proportion of credits to customers in assets increased for the year 2012 from 49% to 51%.
Guarantees extended by Vnesheconombank made it possible to support industrial exports in the amount of 17 billion rubles – Dmitriev
GORKY, May 28. /ITAR-TASS/. Guarantees extended by Vnesheconombank made it possible to support industrial exports in the amount of 17 billion rubles, Vnesheconombank Chairman Vladimir Dmitriev told journalists. “At the end of the last year Vnesheconombank entered into an agreement on extending guarantees to the Export Insurance Agency of Russia in the amount of 10 billion rubles. We have already extended guarantees worth 700 million rubles and this made it possible to support industrial exports in the amount of more than 17 billion rubles”, he said.
Russian Prime Minister Dmitry Medvedev said at VEB’s Supervisory Board meeting today that a mechanism for ensuring competitive conditions for funding exporters was created n Russia with the help of Vnesheconombank. At the end of 2012, 3 billion rubles were transferred to the Bank. For the first time in the modern Russian practice of supporting exports, a target subsidy was provided in line with WTO and OECD standards. These funds are to be used to compensate for interest rates on export credits.
VEB’s Supervisory Board approves nominees for the Development Award
GORKY, May 28 – RIA Novosti. Vnesheconombank’s Supervisory Board approved nominees for the Development Award, their names will be declared at the Petersburg Economic Forum, Vnesheconombank Chairman Vladimir Dmitriev told journalists.
“VEB’s Supervisory Board approved proposals offered by Vnesheconombank and based on the recommendations given by Vnesheconombank’s Expert Council for the nominees for the Development Award”, he said.
Dmitriev reminded that the Award is given in four nominations and will be presented at the Petersburg Economic Forum by the Head of the state.
“Today we have approved institutions that will receive this Award in the course of the Petersburg Economic Forum”, he said adding that he will not name the institutions because this must be a surprise for the public”.
VEB’s management performance efficiency to be evaluated not only by the amount of loan portfolio by also by its quality – Dmitriev
GORKY, May 28. /ITAR-TASS/. One of criteria to evaluate Vnesheconombank’s management performance efficiency will be the Bank’s loan portfolio quality, Vnesheconombank Chairman Vladimir Dmitriev told journalists.
According to him VEB’s Supervisory Board has approved today key performance efficiency indicators for 2012 and a plan for relevant indicators for 2013.
“We agreed that besides quantitative indicators in evaluating Vnesheconombank’s performance as well as in making bonus payments to managerial personnel and employees we will take into account the Bank’s loan portfolio quality”, said Dmitriev. According to him, this is especially important because of the loan portfolio increased amounts. “Given the said growth, quality is important too”, Vnesheconombank Chairman stressed.
VEB might purchase infrastructure bonds of Rostech and Rosnano
GORKY, May 28 – Prime. Vnesheconombank is exploring the possibility of purchasing infrastructure bonds of Rostech and Rosnano, VEB Chairman Vladimir Dmitriev told journalists.
“We are considering applications submitted by Rosnano and Rostech”, he said without specifying sums and dates for purchasing these bonds.
Dmitriev also confirmed Vnesheconombank’s plans for purchasing RZHD’s infrastructure bonds worth 100 billion rubles as well as infrastructure bonds of UES FGC.