Information Message on the Results of Investing Funds of the Reserve Fund and the National Wealth Fund
Russia’s Finance Ministry hereby informs about the results of investing funds of the Reserve Fund and the National Wealth Fund from January 1 to May 31, 2015.
The Reserve Fund
As of June 1, 2015 the aggregate amount of the Reserve Fund was 4 039.27 billion rubles which is equivalent to 76.25 billion US dollars. The amounts of balances in separate accounts to record funds of the Reserve Fund were:
- 37.26 billion US dollars
- 28.27 billion euros;
- 5.25 billion pounds sterlings.
The aggregate calculated income from placing funds of the Reserve Fund in foreign currency accounts of the Bank of Russia recalculated in dollars for a period from January 15 to May 31, 2015 was 0.06 billion US dollars, which is equivalent to 2.97 billion rubles. The exchange rate difference from recalculating balances of funds in the said accounts for a period from January 1 to May 31, 2015 was a negative value of (-)406.22 billion rubles.
The National Wealth Fund
As of June 1, 2015, the aggregate amount of the National Wealth Fund was 4 018.51 billion rubles which is equivalent to 75.86 billion US dollars including:
1) In separate accounts to record funds of the National Wealth Fund with the Bank of Russia:
- 20.98 billion US dollars;
- 21.99 billion euros;
- 4.03 billion pounds sterlings;
2) 195.03 billion rubles and 6.25 billion US dollars were deposited with Vnesheconombank.
3) under an individual decision by the Russian Government 3.00 billion US dollars were placed in debt instruments of foreign states without placing demands on long-term credit ratings.
4) in bonds of Russian issuers related to implementing infrastructure projects, a list of which is approved by the Russian Government – 112.63billion rubles and 1.21 billion US dollars;
5) in preferred shares of credit institutions – 278.99 billion rubles;
6) on deposits of OJSC Bank VTB and Bank GPB (JSC) in order to fund infrastructure projects a list of which is approved by the Russian Government - 164.43 billion rubles.
The aggregate calculated income from placing funds of the National Wealth Fund in foreign currency accounts of the Bank of Russia recalculated in dollars for a period from January 15 to May 31, 2015, was 0.04 billion US dollars, which is equivalent to 1.99 billion rubles. The exchange rate difference from recalculating monetary resources of the Fundfrom January 1 to May 31, 2015 was a negative value of (-) 360.14 billion rubles including:
- balances in foreign exchange accounts with the Bank of Russia – (-)318.67 billion rubles;
- funds deposited with Vnesheconombank in US dollars –(-) 20.55 billion rubles;
- funds placed in debt instruments of foreign states without placing demands on long-term credit ratings –(-)9.86 billion rubles.
- foreign-currency denominated bonds of Russian issuers related to implementing infrastructure projects, a list of which is approved by the Russian Government – (-)11.06 billion rubles.
The aggregate income from placing financial resources of the Fund on Vnesheconombank’s and Bank VTB’s deposits from January to May of 2015 was 8.32 billion rubles which is equivalent to 0.14 billion US dollars.
Indicators of the aggregate amount of the Reserve Fund and the National Wealth Fund as well as of calculated incomes (losses) from placing funds of the Reserve Fund and the National Wealth Fund were calculated on the basis of official exchange rates of foreign currencies set by the Bank of Russia as of the date prior to the reporting date and of cross rates calculated on the basis of the said exchange rates.
Detailed statistics on transactions with funds of the Reserve Fund and the National Wealth Fund is posted on the Internet site of the Russian Finance Ministry in the following sections: “The Reserve Fund” and “The National Wealth Fund” in appropriate subsections in Russian and English, the statistics is updated on a regular basis.
Origin: Press Service of Russia’s Finance Ministry
VEB’s Supervisory Board approves basic parameters for corporate bonds in 2015
At its meeting on May 21, 2015, VEB’s Supervisory Board approved basic parameters for purchasing by the state managing company (SMC) in 2015 corporate bonds in line with reliability parameters through using pension savings funds (PSF) in the extended investment portfolio.
The following basic parametershave been established for transactions on purchasing bonds of OJSC RZHDin the amount of 37 billion rubles with a maximum maturity of 20 years, Federal State Unitary Enterprise (FSUE) the Post of Russia in the amount of 3 billion rubles with a maturity of 15 years, OJSC Rosseti in the amount of 6 billion rubles with a maturity of 30 years, OJSC KAMAZ in the amount of 10 billion rubles with a maturity of 15 years and five-year bonds of OJSC VEB-leasing for an amount of 4 billion rubles.
VEB’s Supervisory Board made a decision on purchasing up to 100% of the said companies’ long-term bonds taking into account that they are in full compliance with reliability parameters as well as insufficiency of funds for meeting their needs for raising long-term investments.
A decision was also made to use as a basis rate a key rate of the Bank of Russia multiplied by 1% per annum besides consumer prices growth index upon determining minimum level of floating coupon rate. In order to minimize a possible conflict of interests a minimum required level of yield for bonds of OJSC VEB-leasing as Vnesheconombank’s affiliated company was established at a level of OFZ issue with a similar period till maturity increased by 2.35%.
A total volume of bids for purchasing of up to 100% of the said companies’ bond issues through using PSF received by VEB amounted to 110 billion rubles. The rated amount of the extended PSF portfolio for investing in bonds of infrastructure and production companies in 2015 amounts to 60 billion rubles.
SMC long-term investments provide new opportunities for developing and upgrading infrastructure as one of the key elements for boosting long-term global competitiveness of the Russian economy. It is pension savings funds managed by SMC are practically the onlyreal source of long money in the economy.
Press Office of VEB
Phone: +7 (495) 608-46-93, Fax: +7 (499) 975-21-34
Vnesheconombank Chairman Vladimir Dmitriev participated in the third meeting of the Heads of the G20 financial development institutions – the D20 and a conference devoted to development of infrastructure as a main instrument for long-term development (the city of Istanbul, the Turkish Republic).
The Heads of the G20 financial development institutions discussed issues of cooperation between the G20 development banks and their interaction with international financing institutions and regional banks and a role of financing institutions in developing social infrastructure. A special emphasis was placed on development banks’ capabilities to raise long-term investments for infrastructure projects.
The heads of the G20 financial development institutions approved a final statement.
The fourthmeeting of the G20 financial development institutionsis scheduled to be held in China in 2016.
A meeting of the Long-Term Investors’ Club(LTIC) Coordinating Committee was also held in the course of which they discussed main lines of the Club’s and its management bodies’ activity. VEB is a member of LTIC.
As part of the D20 meetings, VEB’s management and executives of partner banks: theEuropean Investment Bank, Italian Bank CassaDepositi e Prestiti, the Development Bank of South Africa, the Industrial Development Bank of Turkeyheld meetings in a bilateral format.
Vnesheconombank initiated meetings of the G20 financial development institutions in the D20 format. The first meeting held in 2013 resulted in a joint D20 statement on the role of development institutions in improving the world’s financial and an economic system. At the second meeting of the heads of the D20 financial development institutions held in Rome in 2014, VEB put forward an initiative on including representatives of D20 format financial institutions in national delegations for them to participate in meetings of the D20 Investment and Infrastructure Working Group(IIWG).
Press Office of VEB
Phone: +7 (495) 608-46-93, Fax: +7 (499) 975-21-34
Vnesheconombank and the Commercial International Bank of Egypt agree to cooperate
In the course of the Business Mission “TradeandIndustrial Dialogue «RUSSIA-EGYPT” in Cairo Vnesheconombank and the Commercial International Bank of Egypt entered into a Memorandum on Cooperation in Export Financing.
On behalf of Vnesheconombank the Memorandum was signed by Director of the Export Financing Department Daniil Algulyan and on behalf of the Commercial International Bank of Egypt – by Director of the Financing Institutions Group Mr. HossamRageh.
The financing institutions identified main lines of their cooperation in funding supplies of Russian products and services to Egypt.
Taking into account the current high potential for enhancing trade relations between Russia and Egypt the two sides expressed their confidence that the signing of this agreement would become another step in building up long-term mutually beneficial cooperation.
VEB and the Commercial International Bank of Egypt are interested in their joint implementation of advanced projects on the territory of the Arab Republic of Egyptassociated with exports of Russian products and services.
Under the Memorandum on Vnesheconombank’s Financial Policy, providing support for exports of agricultural and industrial products and services among other things in order to diversify national exports ison of VEB’s main lines of activity.
The Commercial International Bank of Egypt operates on the basis of the Charterand the banking license issued by the Central Bank of Egypt. The Commercial International Bank of Egypt is the third bank among Egyptian banks by the size of assets and the first commercial bank of Egypt by this indicator.
Business mission “TradeandIndustrial DialogueRUSSIA-EGYPT” makes it possible to demonstrate Russia’s investment and export potential and is designed to strengthen business ties, expand and diversify economic cooperation between the Russian Federation and the Arab Republic of Egypt.
The Russian delegation in Cairo is headed by Minister of Industry and Trade DenisManturov and the Egyptian side is headed by Egyptian Minister of Industry and TradeMounirFakhry Abdel Nour.
Press Office of VEB
Phone: +7 (495) 608-46-93, Fax: +7 (499) 975-21-34
Dmitry Medvedev’s Opening Address:
Today we are having a regular meeting of our Supervisory Board. Our agenda is as usual overcrowded. We are supposed to take corporative decisions.
Now, VEB’s main task is to increase the amounts offunding the real economy with a view to the current economic problems,the slump in production.Figures vary, but some of them are alarming. Under the conditions when the Russian banking systemis under the pressure of a number of negative factors, VEB must retain its position as a key development financing institution responsible forindustrial sector, major projects and investments.
For the Bank to operate in these lines of activity most efficiency, the Bank was provided with additional funds and a decision was taken to place 300 billion rubles from the National Wealth Fund on VEB’s deposits. We hope that this will help the Bank to undertake its business activity.
I would also like to stress that we should exercise maximum control over the use of financial resources from the National Wealth Fund – they are our reserves. Conditions for receiving this money have been established in the strictest way. Specialists are to be responsible for a preliminary selection of projects and a final decision is to be made at a meeting of VEB’s Supervisory Board. Every three months, the Bank is to account for spending this money.
A detailed procedure for selecting such projects is to be prepared in the most immediate future and it is to be considered at an upcoming meeting of VEB’s Supervisory Board.
A number of projects we’ll consider today are also designed to boost the industrial sector. We’ll also discuss VEB’s guarantees worth 3 billion dollars under the Yamal LNG Project. This project provides for building liquefied natural gas production facilities and a whole infrastructure - a decision that was also approved by the Government- and here I mean the Port of Sabetta and some other important facilities. The project is important for expanding our export capabilities and developing Northern territories.
Another infrastructure project funded by Vnesheconombank is the construction of Moscow –Saint Petersburg high-speed multilane motorway. This is one of the first public private partnership projects and in this case the Bank is a party to a concession agreementtogether with other government institutions and private investors.
Moreover, we’ll discuss projects in aviation and mechanical engineering industries, agro-machinery industry and in radio electronics. We’ll also talk about the work with pension savings, which are under the Bank’s management. Pensionmoney is used to fund investment projects of the largest Russian companies. We should determine conditions for such transactions this year to not only invest the money reliably but also put them profitably in the projects we have discussed with you.
Let’s get down to work.
Origin: Internet-site of the Government of the Russian Government
Vladimir Dmitriev’s briefing after a meeting of Vnesheconombank’s Supervisory Board
V. Dmitriev: We’ve just finished a regular meeting of Vnesheconombank’s Supervisory Board. The agenda was pretty intensivebut it should be stressed that the Russian Prime Minister, the Chairman of Vnesheconombank’s Supervisory Board, said that it was necessary to exercise strict control over a targeted use of funds worth 300 billion rubles allocated from the National Wealth Fund (NWF) to finance individual investment projects of Vnesheconombank. Funds are to be allocated under a decision by VEB’s Supervisory Board in accordance with the Memorandum on the Bank’s Financial Policy and under the Law for the Bank for Development. In this respect, it should be stressed that the projects we have considered today might be financed with funds from the National Wealth Fund.
Today, we have discussed projects in infrastructure and aviation industry. We also discussed an opportunity for the State Managing Company to allocate funds to finance investmentprojects of some Russian companies.
Our Bank is to fund the Moscow- Saint Petersburg motorway (a segment at the crossing of the Leningrad region with adjacent regions, 100 km plus); our participation share is 6.5 billion rubles. We’ll receive funds by way of issuing bonds which are to be bought out by VTB pension fund. Here we are in close contact with VTB itself, which acts in the capacity of an investor.
Today, our Supervisory Board approved a bridge credit to be extended for the SukhoiSuperjet 100 project to implement the President’s decision to allocate 100 billion rubles worth of bonds to this company, with the bonds to be bought out in the future by commercial banks, that is, this company’s creditors including Vnesheconombank.Now we suggest above allconverting foreign currency credits into ruble ones and then repaying them through using funds to be allocated by the state. The current transaction is worth 32.5 billion rubles.
Pension savings. Out of 60 billion rubles on a free balance sheet in the extended investment portfolio, about 40 billion rubles will be spent on buying out RZHD bonds. 10 billion rubles are earmarked for buying out KamAZ bonds as part of the investment programannounced by this company and this is more than 80 billion rubles. But in the current case, a request by KamAZ for upgrading production facilities, creating a new generation of engines, creating a new driver’s cabinand new generation vehicles, that is import substitution, is worth about 35 billion rubles and now 10 billion is allocated to buy out bonds.
Question: By VEB alone?
V. Dmitriev: By way of using funds of the state managing company. Bonds of such issuers as the Post of Russia, VEB-Leasing and other several companies are also supposed to be bought out.
I’d also like to draw your attention to a project that we have been funding for several years and now it is entering its final stage, this is a project to manufacture microchips in size of 0.9-0.12 nanometers. This project is being implemented by AngstremCompany in Zelenograd. In the near future the project is to be put into a test operation mode. And we hope that by the end of the year this project will be launched and it will gradually achieve its rated capacity. There is a feeling that it will become a part of special economic zone of Zelenograd to enjoy benefits stipulated for this kind of projects. Pending the Petersburg Economic Forum we agreed upon nominees of the Development Award at a meeting of our Supervisory Board. This year there will four more nominees. These are projects in providing support for exports, the best projects with foreign participation and projects in environmental protection ( I am not going to name the winners in advance, we’ll get to know their names at the Petersburg Economic Forum).
We have also discussed some technical issues related to the operation of Vnesheconombank’s internal control service in various lines of the Bank’s activity.
As far as the Yamal LNG project is concerned Ibelieve that atimely and important decision was made that Vnesheconombank would extend guarantees worth 3 billion dollars. We held preliminary talks with Novatek about a credit worth 1 billion dollars to be extended by Vnesheconombank but now the amount of risks we assume in the project, factually in Novatek has increased threefold. We hope that there will be no need for ready cash. This decision was a matter of great urgency because we had to complete negotiations with Novatek’s foreign partners – these are both Chinese and French companies that are also assuming risks in the project.So, this is a key stage in coming close to signing a comprehensive agreement on the construction of a liquefied natural gas plant.
Question: Isn’t VEB exploring the possibility for entering into Yamal LNG’s capital?
V. Dmitriev: No, it isn’t.
Question: This means that there will be no hard cash?
V. Dmitriev: No, there will be guarantees.
Question: You said that you need 3 billion dollars to fund foreign debts and that the Government would not provide this money. Where will you take it from? On the market? Have you already found sources?
V. Dmitriev: Yes, on the market.
Question: What will be the amount of bridge-credit for the SukhoiSuperejet 100?
V. Dmitriev: 32.5 billion rubles.
Question: What about its tenure?
V. Dmitriev: A tenure of half a year but we hope that as soon as a scheme for extending 100 billion rubles worth of bonds and for buying them out in the future by commercial banks is implemented the credit will be repaid. Half a year is a maximum period but I think it might take three months.