Vnesheconombank’s supervisory board regular meeting held

22 april 2011 года

V.V. Putin’s opening address

Good afternoon esteemed colleagues.

Let’s remember once again about what we spoke in our report at the State Duma. As you know we spoke about large-scale development programs in the regions, various production sectors, the housing market, the industrial sector, infrastructure, modernization and launching of large-scale projects.

It’s quite evident that Vnesheconombank is supposed to play a key role in implementing all these plans acting as our leading development institution and consulting center and using its credit resources.

We also expect Russia’s Export Credit and Investment Insurance Agency to work effectively. I’d like to remind you that this Agency is being established in the form of a joint stock company with Vnesheconombank’s 100-percent participation. This new agency is designed to assist our exporters in tapping international markets and we should above all support exporters that operate in innovation sectors. The Government considered, prepared and submitted appropriate amendments to legislation to the State Duma.

At the same time, we have to address all organizational issues associated with the operation of the Russian Export Credit and Investment Insurance Agency and prepare a definitive strategy of its activity.

We have also to create additional instruments to raise capital for the Russian economy. It is for this purpose a Russian Fund of Direct Investments is being set up. We should discuss today an issue of establishing a special managing company for this Fund. The Fund will be responsible for raising foreign long-term investments for the Russian economy intended above all for such high-technology sectors (here I mean innovation projects) as power engineering, oil sector, space exploration, pharmaceutics and etc. The Fund’s managing company with a charter capital of 300 million rubles is to be founded by Vnesheconombank. And in its operation the Fund will be able to rely on Vnesheconombank’s financial and expert potential. In my opinion, this approach is bound to establish the Fund’s credibility with the international investment community and create favorable conditions for its start and further operation.

Besides these systems issues, we’ll also discuss a number of other purely production issues and among them I’d like to single out the one of a credit line worth 39 billion rubles intended for creating a joint venture between Ford and our Russian company Sollers that has been operating in the automotive industry for several years. This is a young company but it has been operating for several years and has shown itself to a good advantage. At our request, the company is expanding its production including as we know in the Far East.

I believe that the project in point is a very interesting, much needed initiative. The partnership between Russia’s company Sollers and Ford would make it possible to attract new technologies, significantly increase production facilities of the companies already operating successfully in various regions of the Russian Federation, for example in Tatarstan (the city of Elabuga) and in the Leningrad region. The credit resources we are to make available today will be used to increase production localization. This is fully in line with requirements the Russian Government formulates for our foreign partners. The money is to be used to set up the production of component base on the territory of our country. Suffice it to say that in the future the level of localization at Ford-Sollers joint venture is supposed to reach 60%.

The launch of such a large-scale project is especially important today against the backdrop of the Russian auto market growth. In the first quarter of this year the output of cars in our country increased by 2.2 times. And I’d also like to remind you that we made a decision to additionally fund the car utilization program. All these factors form a good basis for the launch of this new large-scale project.

Let’s get down to work.

Origin: Internet Portal of the Government of the Russian Federation


On Vnesheconombank’s Supervisory Board Decisions


VEB to start funding the construction of the Olympic Village

Novo-Ogarevo. April 22. INTERFAX – Vnesheconombank is to provide credit resources to fund the construction of the Olympic Village in Sochi, said Vnesheconombank Chairman Vladimir Dmitriev.

He reminded journalists on Friday that a credit line worth about 2 billion rubles to fund this project had already been opened. The funds are intended for performing pre-project work.

“Besides the money we have already provided under the last year’s decision the total amount is 15.5 billion rubles and at our today’s Supervisory Board meeting we made a decision to allocate 3 billion rubles so that we could start full-scale financing after agreeing upon security documents”, said V. Dmitriev after Vnesheconombank’s Supervisory Board meeting on Friday.

According to him the credit is to be extended at a refinancing rate of plus 0.4-1.4%.


Total budget of Ford-Sollers JV project to amount to 75 billion rubles. VEB to allocate 39 billion rubles

NOVO-OGAREVO, April 22 – RIA Novosti. Vnesheconombank is to extend a credit to establish a Ford-Sollers Joint Venture for an amount of 39 billion rubles for a period of 10 years at a refinancing rate of plus 2%, the project’s total budget is 75 billion rubles, Vnesheconombank Chairman Vladimir Dmitriev told journalists after Vnesheconombank’s Supervisory Board meeting.

“The funding provides for building several production facilities in three cities – Naberezhnye Chelny, Elabuga, Vsevolzhsk”, said Dmitriev.

He said that the parties’ participation share in the project to establish a Ford-Sollers Joint Venture is 50 to 50. And the property contribution of both parties is 18 billion rubles.

According to Dmitriev, the project’s implementation will result in building production facilities for manufacturing 350 thousand automobiles per year. Mr. Dmitriev also noted that a domestic competence would be created in engine-building.

VEB’s Chairman said that the project’s implementation would result in forming our own scientific-technical base in Tatarstan. He also stressed that in the course of the project’s implementation budgets of various levels would receive about 39 billion rubles and 3 thousand new jobs would be created.

According to him, in the near future Vnesheconombank intends to sign a memorandum with the project’s participants. The memorandum is to specify investment terms. He noted that the project’s details are being thoroughly studied. Dmitriev said that after completing the preparation of documents, “we would submit finalized financial terms of funding this project to Vnesheconombank’s Supervisory Board”.

Dmitriev also said that this credit should be extended at the most favorable interest rate. “Now we are discussing a refinancing rate of plus 2%”, said Vnesheconombank’s Chairman.

It became known in mid February that the Russian automaker and Italian Concern Fiat terminated their negotiations about establishing a joint venture which could have become the second largest player after AvtoVAZ on the Russian car market. The companies signed a memorandum on establishing a joint venture a year ago and at the beginning of July Sollers submitted an application to VEB for arranging a syndicated loan worth 2.1 billion euros to fund the project. Later on, the parties decided that they would implement their long-term strategies individually.

At the same time, Sollers was not left without a partner, on the same day the company announced the establishment of a joint venture in equal shares with Ford to manufacture and distribute Ford cars on the Russian market.


VEB’s Supervisory Board accepts founding documents from a managing company of a Direct Investments Fund

NOVO-OGAREVO, April 22 – RIA-Novosti. Vnesheconombank’s Supervisory Board accepted founding documents of a managing company of a Sovereign Direct Investments Fund, Vnesheconombank Vladimir Dmitriev told journalists after Vnesheconombank’s Supervisory Board meeting.

“Today we have discussed an issue of establishing a Direct Investments Fund and most importantly, a managing company of this Fund. This managing company is a legal entity - a limited liability company. On the whole, we accepted this institution’s founding documents but they will require some fine tuning”, Mr. Dmitriev told journalists adding that this would be done until this June.

Answering a question about who might be in charge of this institution, Mr. Dmitriev said that they had discussed worthy candidates known to the market.

“I think that in the most immediate future a surname of the managing company’s head will be made public”, said VEB’s Chairman.

A Fund of Direct Investments is scheduled to be established in the form of a closed mutual investment fund. This will be VEB’s 100-percent subsidiary company and its charter capital is to be formed through using federal budgetary funds. Its target amount is to be 10 billion dollars. Russian President Dmitry Medvedev announced an initiative to establish such a fund at the World Economic Forum in Davos.

The Fund will be responsible for raising long-term investments for the Russian economy, above all, for high-technology sectors and innovation projects in such industries as power engineering, the gas sector, pharmaceutics and space exploration.


Vnesheconombank Chairman V.A. Dmitriev’s Interview to the TV Channel Russia 24

21 april 2011 года

TV Channel Russia 24
21.04.2011, 23:21


HOST: You’ll watch an interview with Vnesheconombank Chairman Vladimir Dmitriev about a Fund of Direct Investments scheduled to be launched as early as this summer and its functions.

Evelina Zakamskaya: Good evening Vladimir Alexandrovich, thank you for finding time for us.

Vladimir DMITRIEV, Chairman of State Corporation ‘Bank for Development and Foreign Economic Affairs (Vnesheconombank)’. Good evening.

Evelina Zakamskaya: There emerged a steady trend in the dialogue between the state authorities and business: the state expects direct investments and increased business activity. What do you think the state and business could do in this respect? And how does Vnesheconombank participate in this sort of activity?

Vladimir DMITRIEV: In our activity we give top priority to boosting Russia’s investment appeal and raising investments. And in our opinion, establishing a Fund of Direct Investments is sure to increase Russia’s investment appeal. The Russian President’s initiative to create this Fund was launched last year and has been given a fresh impetus this year in Dmitry Medvedev’s address in Davos. Eventually, this initiative evolved into an instruction to Vnesheconombank, the Government and the Working Group on Establishing an International Financial Center in Russia and to the International Economic Forum in Saint Petersburg to take all necessary measures for establishing a Fund of Direct Investments. We believe that it’s quite realistic to raise significant funds of both foreign and Russian investor for the Russian economy provided that the state undertakes to share risks with private investors with a minimum proportion of 1:5. This means that for each ruble invested in a project by the Fund, foreign and Russian private business will invest 5 rubles in the economic sectors that are also of great interest for investors that is, the ones of overriding importance in terms of Russia’s modernization and innovative development.

Evelina ZAKAMSKAYA: How would respond to the criticism that the Fund is too small and very small sums are earmarked for it?

Vladimir DMITRIEV: I think that those who are skeptical about this new Fund might not know specifics of this Direct Investments Fund’s operation. The fact is that the state is ready to allocate 10 billion dollars for a period of five years to establish this Fund. And of course projects each of which is worth at least 100-150 million dollars should be prepared properly. And we won’t be able to form the so called pipeline in the near term. The pipeline that suits investors who will be ready to invest significant funds in it. Nevertheless, we hope that we’ll be able to form a Fund worth 2 billion dollars until the year-end. And we’ll start submitting appropriate proposals to consideration by an investment committee of a managing company until the year-end. When I say “we” I mean, above all, the Fund’s managerial staff, a managing company. This is because neither the state nor Vnesheconombank intend to administer this Fund. It should be structured in such a way that investors could be sure that they make decisions on their own. There will be other ways of managing this Fund too. I’ve mentioned an investment committee and we intend to offer an efficient supervisory board and an international expert council for the Fund’s activity to be transparent and understandable for private investors.

Evelina Zakamskaya: You can’t deny the fact that Vnesheconombank has a really unique status. On the one hand VEB acts as an investor and looks for projects in which it can invest money inside the country. On the other hand you raise investments from abroad. For this reason you can size up the situation thoroughly. What can you say?

Vladimir DMITRIEV: You’re right to a great extent. We are responsible for raising credits rather than being an investor. Although in certain cases we act also as an investor and participate in companies’ capital. Our status is really unique. But our unique status is associated with the fact that we are a state-run institution and by law our Supervisory Board is headed by the Prime Minister and it is comprised of vice premiers and ministers of line ministries and it is our Supervisory Board that formulates Vnesheconombank’s policy. And it is pursued in line with the country’s main lines of economic policy. As Vnesheconombank’s partners are foreign and Russian investors we are going to really help them in a very complicated investment environment to select top-priority projects that would suit investors and would be important for the Russian economy. We mean of course projects that would generate high incomes for investors, say, in the amount of 15-20 percent, these incomes are…

Evelina ZAKAMSKAYA: Pretty large

Vladimir DMITRIEV: Pretty large for those investing funds in the emerging markets.

Evelina ZAKAMSKAYA: Today, an issue of the state’s involvement in business is being given increased attention. I’d like to ask you about prospects and potential of public private partnership. Because it’s quite evident now that the state’ presence is a guarantee of stability for investors.

Vladimir DMITRIEV: Public private partnership is not new to us and it is one of our Bank’s main lines of activity. We have discussed this issue with you several times and you know a public private partnership center was established at VEB and in fact this center has become a quasi-federal institution responsible for assisting regional, municipal authorities in structuring, above all, infrastructure projects on the principles of public private partnership. Not long ago we expanded this line of our activity. We established a special fund to support projects implemented on the principles of public private partnership. Under VEB’s Supervisory Board decision VEB is to allocate 2 billion rubles to this end annually and these funds will be used to finance pre-project work, drawing up project and estimate documentation in order to substitute regional and municipal budgets that suffer certain budgetary constraints as well as in order to put together a project and then put it out to tender for potential investors compensating for Vnesheconombank’s expenses through further investments. We have already formed a package of the first projects in some regions. In addition to the abovementioned 2 billion rubles, 900 million rubles were allocated for Moscow for the year 2011. We are incorporated in the working group specially set up under the Moscow Government. On the whole the idea of public private partnership is slowly but rather confidently gaining momentum. We can see large-scale infrastructure projects being implemented on the principles of public private partnership. They include the Moscow-Saint Petersburg motorway project (Section 15-58 km), the Odintsovo bypass project, the Pulkovo airport project and a whole range of other projects. This is an absolutely worthwhile idea. There are numerous examples of projects that are being implemented on PPP principles abroad. 

Evelina ZAKAMSKAYA: Perhaps, venture, innovation projects are perfectly suited for this form of cooperation?

Vladimir DMITRIEV: There is no doubt about it. As far as this line of our activity is concerned, I’d like to mention an agreement on cooperation with state-run and private companies operating in venture and innovation sectors. Last year Vnesheconombank, Rosnano, the Russian Venture Company, the Fund for Supporting Small and Medium-Sized Enterprises in the Innovation Sphere and a whole range of companies signed an agreement on cooperation. Several weeks ago the Skolkovo Foundation became a party to this agreement. Here we went along the same way as we did in supporting infrastructure projects on the principles of public private partnership in the regional and municipal sphere. We are going to submit a proposal to VEB’s Supervisory Board for setting up a special fund that would be responsible for supporting venture projects at pre-project stages. This stage involves preparing necessary documentation and financing drawing up project and estimate documentation in order to secure commercialization of an innovation project at a later stage. These projects are exclusively associated with Skolkovo and we believe that this sort of zero-stage support for private entrepreneurs working in the innovation sector is sure to prove extremely important.

Evelina ZAKAMSKAYA: And now my last question, Vladimir Alexandrovich. Do you believe that it makes sense to establish an International Financial Center in Moscow? It seems that Moscow has no obvious advantages over London or the Hong Kong Stock Exchange. What companies might take interest in us?

Vladimir DMITRIEV: If I didn’t believe in this idea I wouldn’t be one of its enforcers both in our country and abroad. Some of our Bank’s employees are members of the working group on establishing an International Financial Center.  A lot is yet to be done. And here I mean not only transport and social aspects but also financial-economic aspects such as for example establishing a unified depository, unifying stock exchanges, creating a favorable financial-investment climate and etc. And I feel pretty comfortable in this respect because to a great extent things that we are supposed to do to establish an International Financial Center coincide with Vnesheconombank’s top-priority lines of activity.

Evelina ZAKAMSKAYA: Thank you.

Vladimir DMITRIEV: Thank you.


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