On 2 March 2017, Vnesheconombank's Supervisory Board held a meeting to review the Bank's performance in 2016 and the budget for 2017. During 2016, the Bank's major focus was on crisis management. The Bank directed its efforts towards preventing default of the Group and create a development strategy. The Supervisory Board concluded that the Bank achieved the goals set for 2016. By the year-end, the Bank managed to produce a substantial liquidity surplus of as much as RUB 200 bn. Investors' confidence has recovered. The Bank made a debut issue of foreign currency bonds for USD 600 mn with settlements in Russian rubles. Agreements with Chinese banks were entered into for an amount equivalent to USD 2.5 bn. Return on pension savings as at year-end doubled inflation. In 2017, the Bank is to move from crisis management to restructuring and transformation.
During the meeting, a new organisational and functional structure has been presented to the Supervisory Board which is required for the implementation of Vnesheconombank's Development Strategy until 2021 approved in December 2016. The main changes will affect the investment unit which is to reflect the priority investment arias determined by the new strategy: high value-added manufacturing, infrastructure, export aid, use of defense facilities for civilian production, support for innovation and STI projects.
The Bank also plans to develop new competencies, including integrated industry-specific business solutions such as sectorial analysis, and will focus on proactive search and selection of priority promising projects in regions.
The Supervisory Board discussed Vnesheconombank's proposals for improving the system of corporate key performance indicators which provides for target KPIs for all managers.
The Board also considered creating a strategy committee responsible for the conformity of the Bank's portfolio with the established priorities. The committee will be headed by Presidential Aide Andrey Belousov. It will be formed of both members of Vnesheconombank's Supervisory Board and heads of federal executive bodies.
Another issue discussed during the meeting was the establishment of Vnesheconombank's institute for research and expertise. The aim is to improve the effectiveness of expert and analytical support of the VEB Group and expert research for the Government of the Russian Federation.
During the meeting, the Supervisory Board also made a number of executive changes.
Dmitry Kurdyukov was appointed as Vnesheconombank's First Deputy Chairman – Board Member. Before that he was Chairman of North-Western Bank, Sberbank. Dmitry will lead the reorganised business unit including the investment unit and the industry-specific business solutions unit.
Deputy Chairman Alexey Ivanchenko joined Vnesheconombank's Management Board. He will be responsible for relations with state and regional authorities, corporate governance, public relations and mass media. He will supervise the Bank's new model of working with regions.
Petr Zolotarev and Artem Dovlatov were appointed as Vnesheconombank's Deputy Chairmen. Petr will coordinate the industry-specific solutions unit. Artem will be working on the management of Vnesheconombank's subsidiary and related companies.
Yulia Karpova was released from her duties as a member of the Management Board and has left the Bank from 1 March 2017.
During the Russian Investment Forum in Sochi Vnesheconombank and Rosseti, Public Joint Stock Company signed a cooperation agreement.
On behalf of Vnesheconombank the document was signed by its Chairman, Sergey Gorkov, and on behalf of PJSC Rosseti by the General Director, Oleg Budargin.
The Parties determined the following priorities for their bilateral cooperation:
- support of investment projects in Russia and abroad including those carried out together by the companies from the Asia Pacific Region;
- support of innovative technology development in the power industry;
- implementation of import substitution projects;
- implementation of projects promoting energy efficiency;
- provision of associated banking and investment services.
The bank, in its turn, is ready to develop for the company and its entities customized financial solutions and technologies and to negotiate the service terms and conditions given the specific implementation procedure of certain projects.
Chairman of Vnesheconombank Sergey Gorkov: “VEB is ready to invest in the projects that adopt best practices in the energy efficiency sphere. These are, first of all, smart grids. We are also interested in the projects of the National Technological Initiative, the breakthrough technologies in which Russia has a competitive edge.”
“The agreement with Vnesheconombank that we signed today means the development of our cooperation. We agreed on the key areas on which our further coordinated actions will be focused. I am sure that the implementation of projects in the context of the agreement will contribute to the achievement of the global development tasks of the power industry,” Oleg Budargin emphasized.
The parties expressed confidence that the realization of joint projects under this agreement will promote the growth of the Russian economy and the expansion of Russia's global presence in the world energy market.
State Corporation "Bank for Development and Foreign Economic Affairs (Vnesheconombank)" is a national bank for development, one of the biggest Russian financial institutions. It was founded in 1924, and since 2007 it functions under a special federal law "On the Bank for Development”. Its supreme managing body is the Supervisory Board, governed by Dmitry Medvedev, Chairman of the Government of the Russian Federation. According to the 2021 Development Strategy, VEB is going to focus on financing the projects of high-scale redistribution in industry, developing infrastructure, supporting non-resource exports, assisting the transfer of military technologies to civilian ones, supporting innovations and projects by the National Technological Initiative.
Rosseti, Public Joint Stock Company, an operator of energy grids in Russia, is one of the largest electric companies in the world. The company maintains 2.30 million km of power transmission lines, 490,000 substations with a transformer capacity of over 761 GW. In 2015, its net power supply to consumers amounted to 720.5 billion kWh. The number of employees of the Rosseti Group of Companies is 216,000 people. The asset portfolio of PJSC ROSSETI includes 37 subsidiaries and affiliates, including 14 interregional and a main network company. The controlling shareholder of the company is the state represented by the Federal Agency for State Property Management of the Russian Federation, which owns 87.9% of the share capital.
PJSC ROSSETI is a leading company in the Russian market in introducing innovative technologies to the main and distribution grid complex. The company pays a great deal of attention to such issues as energy conservation, energy efficiency, international cooperation, environmental protection and occupational safety.
A New Stadium for the Professional Football Club CSKA to be named VEB Arena
During the Russian Investment Forum in Sochi Vnesheconombank and PFC CSKA signed an agreement for the development of cooperation as partners.
On behalf of Vnesheconombank the document was signed by Chairman, Sergey Gorkov, and on behalf of the football club by its President Evgeni Giner.
The parties outlined the key terms for the adoption and promotion of a new name for the football stadium, VEB Arena.
“Vnesheconombank is tool for financial leverage for multiple infrastructural projects in our country, and we believe that such promotion of our brand, giving to CSKA Arena the name VEB Arena will create for all visitors of this sporting venue the correct association with the main mission of the Bank for Development”, said Sergey Gorkov.
Evgeni Giner noted that “VEB carefully and respectfully maintained traditions having arranged for construction of the stadium on the historical site. This is a long term project aimed at several generations of players and supporters. Our bank for development showed in practice how it invests in the development of infrastructure and future generations. We are glad that a bank this big will always be next to us on our home stadium.”
The decision that VEB would participate in the financing of the new arena construction was made by the Bank’s Supervisory Board in 2012. The total project value was USD 350 million with VEB's participation share amounting to USD 241 million. VEB regards this project as successful - the venue was erected on time and cost less than budgeted. Moreover, due to a considerable reduction in the construction costs the savings achieved are 40 million US dollars (originally, the bank was to lend USD 280 million).
The stadium meets all requirements by UEFA and FIFA. The first competitive game that PFK CSKA had on the new home arena was on 10 September 2016. The stands are marked with four letters present in the name of the club: C, S, K and A. Apart from standard and luxury seats, the arena has over one hundred of VIP boxes intended for 12-18 persons.
The modern complex built on the site where the old arena used to be, in the 3rd Peschanaya street comprises, besides the sporting part, a 38-storey office tower, a hotel and two administrative buildings. The stadium will accommodate the club's first ever museum. It will feature both modern trophies and different exhibits dating back to the Soviet period.
Vnesheconombank Fulfills Its Obligations Under Domestic Series BO-05 Bonds Put Offer
State Corporation “Bank for Development and Foreign Economic Affairs (Vnesheconombank)” on February 28, 2017 fulfilled its obligations to purchase bonds from investors in the course of the put offer under its RUB 5 billion Series БО-05 exchange bonds issue.
Under the current put offer Vnesheconombank bought 3 974 049 bonds with the total par value of RUB 3 974 049 000,00.
The coupon rate of the bonds was set at 9.20 % with a maturity of 3.5 years.
VEB to finance the construction of polyester plant in Ivanovo Region
For the purposes of the investment project “Construction of the textile grade polyethylene terephthalate production facility in the Ivanovo Region”, Vnesheconombank and JSC Ivanovo Polyester Complex signed a liaison agreement during the Russian Investment Forum in Sochi.
The document was signed by Vnesheconombank Chairman Sergey Gorkov and General Director of JSC Ivanovo Polyester Complex Sergey Nikolaev, in the presence of Governor of the Ivanovo Region Pavel Konkov.
Sergey Gorkov stressed that “the launch of the project was made possible, in particular, due to the active involvement of the Governor of the Ivanovo Region. The construction of the plant will facilitate the creation of a new sub-branch in Russia, as outlined in the VEB strategy. This sophisticated project is of particular importance for the Bank”.
The head of the region, in his turn, expressed appreciation to Chairman of Vnesheconombank Sergey Gorkov for his efforts in supporting the project. “VEB takes over coordinator duties, seeking consistent solutions with many of those involved in the project financing. The State Corporation is highly responsible for the result. The synthetic fiber plant is the largest project of the Ivanovo Region and purposefully strategic for the Russian textile industry. Moreover, this project can be considered one of the most successful in the framework of public and private partnership”.
The parties agreed to undertake joint actions focused on the implementation of the project. The project over 25 billion rubles worth, including costs of attracted financing, is being implemented in the monotown of Vichuga, the Ivanovo Region, and involves the creation of a polyester fiber production plant (capacity 175 thousand tons per year), and textile grade PET chip production plant (capacity 30 thousand tons per year).
The project has successfully undergone the necessary expert appraisals, such as the State Environmental Review and an independent environmental impact assessment according to the state standards of the Russian Federation and IFC and OECD international standards. The purpose of the project lies in the localization of high-quality polymeric fiber production and the use of import-substituting raw materials for the textile and light industries in the Russian Federation, as well as the creation of a manufacturing chain of technical textile for the growing domestic market.
Vnesheconombank’s involvement in the financing and construction of the plant was approved at the meeting of the Bank’s Supervisory Board in December 2016.
Based on the agreement and with a view to financing the project, Vnesheconombank intends to attract the related funding under the coverage of European export credit agencies to the amount of approx.. EUR 280 million. In its turn, the initiator of the project, JSC Ivanovo Polyester Complex intends to provide equity investment to the amount of more than 5 billion rubles, and to elaborate on the additional measures of state support for the project. For the purposes of the project, the loan agreements are to be signed by the parties in April this year.
During the Russian Investment Forum in Sochi, the State Corporation “Bank for Development and Foreign Economic Affairs (Vnesheconombank)” and JSC Garnizon signed a cooperation agreement.
On behalf of Vnesheconombank the document was signed by Chairman, Sergey Gorkov, and on behalf of JSC Garnizon by the acting General Director, Sergey Ten.
The parties have agreed to develop and realize a number of measures for providing to JSC Garnizon financial and non-financial support in the course of execution of government defence orders, national programes for the defence industry complex, as well as investment projects and the projects implying the upgrade of the assets of JSC Garnizon and other Garnizon Holding members.
Implementation of the agreement will boost the performance of the defence industry, the competitiveness of the defence and dual-purpose products produced by Russian manufacturers and aims, among other things, to support projects for the conversion of the defence industry factories to the production of civilian goods.
JSC Garnizon is the largest, in terms of authorized capital, company within the group controlled by the Russian Ministry of Defence. Garnizon Holding currently combines more than 160 companies combined into 6 sub-holdings.
Vnesheconombank and the Agency for Strategic Initiatives Will Establish an Institute of Certified Project Selection Managers in Regions
An institute of VEB Certified Project Selection Managers will be created in Russian regions. The graduates are to search for and sift out promising investment projects. This decision was reflected in the agreement between Vnesheconombank and the Agency for Strategic Initiatives (ASI) executed during the Russian Investment Forum in Sochi.
The document was signed by Vnesheconombank's Chairman Sergey Gorkov and by ASI's General Director Svetlana Chupsheva.
As part of development of their cooperation, the parties are planning to introduce a new approach to the way the Bank and ASI work with Russian constituent entities in attracting investment to promising projects. It will rely on unified project selection standards and a scoring model for preliminary assessments based on an online platform, which is to result in a system for preparing VEB's certified managers in Russian regions, a broader filter for selecting projects, reduced time period for project consideration, focus on customer and improved economy of the projects through regional state support measures. All of the above is to make the process as clear and transparent as possible.
The programme will roll out across top 20 Russian constituent entities ranked by the state support level.
Vnesheconombank's Chairman Sergey Gorkov: “We are moving to a stage of proactive work with regions in terms of searching and selecting new projects for VEB. Together with the Agency for Strategic Initiatives, we have developed a new approach to the process, given the strong competencies of the both organisations. Our focus is on infrastructure and high technology projects, STI projects and non-commodity export support.”
ASI's General Director Svetlana Chupsheva: “ASI has a wide regional network and an extensive experience in working with business representatives. I believe, Vnesheconombank's expertise and resources will allow us to create an efficient instrument for selecting and financing most promising projects while the unique 'open selection' methodology will attract first class professionals.”
The programme for introducing the new approach to VEB will be coordinated by the Bank's Deputy Chairman Alexey Ivanchenko.
VEB and Roscongress Foundation agree to jointly promote Russian exports
Vnesheconombank and the Roscongress Foundation have agreed on joint information support for the promotion of Russian exports as part of the ‘Made in Russia’ National Brand project.
The corresponding cooperation agreement was signed by Vnesheconombank Chairman Sergey Gorkov and Roscongress Foundation CEO Alexander Stuglev at the Russian Investment Forum in Sochi.
The document envisages the establishment of partnership relations as part of the development of the ‘Made in Russia’ National Brand concept as well as advertising, marketing, branding and communications support for the export of Russian goods and services.
To this end, the parties agreed above all to build an effective communications system, conduct joint specialized events (meetings, sessions, roundtables, conferences, etc.) and to also provide mutual expert and consulting support in order to promote the interests of Russian exporters.
‘Made in Russia’ is the first communications project for the promotion of exports, business and culture, which includes the international media, the ‘Made in Russia’ logo and sectoral catalogues.
VEB and Renova State Company agree to cooperate in the field of high tech and infrastructure projects
During the Russian Investment Forum in Sochi Vnesheconombank and Renova Group of Companies JSC signed a cooperation agreement.
The signatory on the part of Vnesheconombank was Sergey Gorkov, Chairman of the Board, and the signatory on the part of Renova Group of Companies – Viktor Vekselberg, Chairman of the Board of Directors.
The parties have agreed to work on the possibility of financing projects in the sphere of high tech, innovations and investments in disruptive technologies, including projects aimed at developing Digital Economy, Industry 4.0, Blockchain and Neurotechnologies.
VEB and Renova Group of Companies are going to pay special attention to supporting export of industrial products and services, including information technologies and innovative products.
Transport and energy infrastructure projects as well as high tech public health infrastructure and industrial sites infrastructure projects and projects for the Year of Ecology are regarded as a priority.
According to the document, the projects are to be implemented with the use of co-financing and state support instruments.
For the purpose of cooperation with Renova Group of Companies, Vnesheconombank is ready to develop individual financial solutions, technologies and service conditions taking into account specific nature of the Group’s activity by appointing personal managers to supervise all cooperation issues.
The parties will build task groups to choose and adjust optimal conditions for financing investment projects.
State Corporation "Bank for Development and Foreign Economic Affairs (Vnesheconombank)" is a national bank for development, one of the biggest Russian financial institutions. It was founded in 1924, and since 2007 it functions under a special federal law "On the Bank for Development”. The supreme managing body is the Supervisory Board, governed by Dmitry Medvedev, Chairman of the Government of the Russian Federation. According to the 2021 Development Strategy, VEB is going to focus on financing the projects of high-scale redistribution in industry, developing infrastructure, supporting non-resource exports, assisting the transfer of military technologies to civilian ones, supporting innovations and projects by the National Technological Initiative.
Renova Group of Companies is a leading Russian private business-group that owns and manages assets in iron and steel, mining, chemical and construction industries, transport, energy, telecommunications, high-tech machine building, housing and utility and financial sectors in Russia and abroad (in CIS countries, Switzerland, Italy, South Africa and the USA). Shares in UC RUSAL, T+, Kortros, Airports of Regions, as well as in Swiss high tech machine building groups such as OC Oerlikon, Sulzer and Schmolz+Bickenbach iron and steel company belong to the major assets of Renova Group of Companies.
Winners of the Development Award - 2017, the Investment Project Competition, Announced
Vnesheconombank revealed the results of its investment project competition, Development Award - 2017, and granted awards as winners in six categories. It was the first time that the gala ceremony was held as a part of a plenary session of the Russian Investment Forum in Sochi. Earlier the ceremony was hosted by the Saint-Petersburg International Economic Forum.
The awards were handed out by Chairman of the Government of the Russian Federation, Chairman of Vnesheconombank Supervisory Board, Dmitry Medvedev and Chairman of Vnesheconombank, Sergey Gorkov. This was the fifth time that the Development Award competition has been held by Vnesheconombank.
Chairman of Vnesheconombank Sergey Gorkov: “This year the renovated Development Bank has received a new strategy. The Development Award categories can now be related to the strategy priorities. All projects presented by the competitors were unique and we are pleased to give awards to the winners. The goal of the upgraded VEB, VEB 2.0, is to find innovative projects, cultivate them, adjust their scale, promote their progress and bring them to a whole new level.”
The award in the Best Infrastructure Project category went to АО MaximaTelecom for the project “Building a Free Wi-Fi Network in the Rolling Stock of the Moscow Metro”. Each user now can access a free network for doing business, learning or entertaining themselves while in the metro.
The award for the Best Project in the Manufacturing Sector was given to “The Launch of Commercial Production of the Locally Produced High Performance Energy Efficient Processor Baikal-T1”, by AO Baikal Electronics. It concerns large-scale production (in batches of up to a million units) of a state-of-the-art microprocessor developed in Russia for sales in Russia and abroad.
The project “The Quantorium Chain of Children's Technology Parks”, implemented by the Republican State Centre for Multicomponent Information Computer Media, became the Best Project for Integrated Area Development. Its aim is, by 2020 to provide more than 70% of children aged from 5 to 18 with high-quality additional education programs in all regions of the Russian Federation.
The winner in the category The Best Project in the Innovation and High-Technology Area was the project “Organization of Advanced Production of Biological Substances and Medicines for Treatment of Complex Cancer and Autoimmune Diseases” delivered by ZAO BIOKAD in Saint Petersburg. It will bring the production of high-technology Russian drugs that will replace foreign equivalents and reduce the government expenditure on pharmaceutical treatments.
The Best Environmental and Green Technology Project was the project “Siberian Fuel Pellets” – processing of wood sawing waste and use of the waste for the production of biofuel from the renewable energy sources in the Irkutsk Region. The project is being undertaken by OOO Siberian Fuel Pellets.
The Best Export Project was “Export of Russian Technologies (JURECA Supercomputer System) to the Supercomputer Center in Julich (Germany)” that was delivered by ОАО Т-Platforms and became the first project of its kind in the history of the Russian radioelectronic industry.
The list of competitors for the Development Award includes the companies that have developed breakthrough technologies, overcome red tape and other barriers and whose contribution should be highly praised. The projects presented by the Development Award winners give an example of concerted efforts of academics and practitioners, those who see the future for 5-10 years from now and understand the science development trends.
The Development Award is a professional award for achievements in the realization of large projects having national significance. The competition for the award for the contribution to the sustainable social and economic development of Russia, the Development Award, was established by Vnesheconombank in 2012.
Russian President Vladimir Putin meets Chairman of Vnesheconombank Sergey Gorkov
VP: Sergey Nikolaevich, what are recent developments at the Bank, how are your plans progressing, both at the Bank and on projects?
SG: Despite certain challenges which, as you remember, we faced early last year, the Bank ended the year well. Overall, the liquidity issue was dealt with and our year-end performance was even better than we had expected. Furthermore, we financed some RUB 100 billion worth of projects: a fairly good result for the past year.
At the end of December, the Bank’s new strategy was approved. Its primary focus is on support for such sectors as exports, infrastructure, innovations, NTI, new technologies and new technological production. This year, we expect to step up investments to RUB140 billion annually, which is a 40% increase on the previous year. I believe that the Bank has completed its anti-crisis development stage and is now moving to the stage of a bank for development proper. We look to the future with confidence.
VP: Which projects would you prioritize?
SG: In December we approved several projects including a polymer plant to produce technical textiles in Ivanovo. It’s the first such plant in Russia and a large investment - USD 500 million. Furthermore, it is a fairly large-scale new production line, and for such region as Ivanovo it is perhaps the largest one.
A plant in Torzhok is a large-scale high value-added wood processing enterprise with investments of about RUB 40 billion. It is not just primary processing and production of timber but sophisticated processing.
We are also financing transactions to promote the exports of the Sukhoi Superjet to Europe. A new market, Ireland, would help increase the Sukhoi Superjet exports to Europe. Overall, we have a pipeline of some 100 new deals.
VP: Very good.