At its meeting on 18 May 2017, the Supervisory Board of Vnesheconombank considered extending a loan to AO Transholdleasing to deliver a project on the acquisition and leasing of subway cars to the Moscow Metro under a life cycle contract (LCC-2) using resources from the National Wealth Fund (NWF). The project provides for the delivery of 768 subway cars manufactured at OAO Metrovagonmash to the Moscow Metro in 2017-2020. The contractor will also provide maintenance services to the subway cars throughout their life cycle. The total value of the project is RUB 63.5 billion, of which RUB 38.3 billion will be financed out of the funds raised from NWF. The funds shall be repaid by the end of 2035. The project is to be carried out as part of the Moscow Government programme designed to renovate the obsolete electric train fleet on the operational lines of the Moscow Metro and develop the metro infrastructure to ensure high standards and top-flight service for Moscow passengers.
Using the NWF funds deposited with Vnesheconombank, the Bank already extended financing for the first project on subway cars under a similar life cycle contract at the end of 2016.
The Supervisory Board also considered extending a RUB 14 billion loan to AO AHML. The bulk of the funds will be allocated to finance rental market development programmes.
Furthermore, the Supervisory Board considered setting up OOO VEB Innovations to promote the National Technological Initiative (NTI) and digital economy projects, attract co-investors, and facilitate the entry of Russian innovation companies into the global market. Transformation of the subsidiary into a limited liability company is primarily attributed to VEB’s focus on rapid development and innovative areas, including blockchain, marketplace, and quantum and convergent technologies. VEB Innovations have already selected three ambitious projects eligible for financing, all of which fall under the following NTI categories: AeroNet (distributed unmanned aerial vehicle systems), EnergyNet (distributed power generation from personal power to smart grid and smart city), and HealthNet (personalized medicine).
Furthermore, a decision was taken to establish an audit committee under the auspices of the Supervisory Board. The committee is designed to help the Bank’s supreme collective body to efficiently exercise control over VEB’s financial and business operations. The Russian Minister of Finance Anton Siluanov is to head the committee, which will comprise members of the VEB Supervisory Board, federal government officials, and expert community representatives.
The Supervisory Board adopted a number of corporate decisions, in particular, allowing an increase in the authorized capital of the Russian Export Center (REC, VEB Group) with a view of developing its regional and global network and boosting lending to exporters. It has been also decided to expand REC’s authority in terms of subsidizing the participation of Russian manufacturers in foreign exhibitions and delivering strategic projects to promote exports, specifically, the national export brand “Made in Russia”.
Still another item on the agenda was Vnesheconombank’s corporate-wide performance ratio system for the year 2017. Presented for approval by the Supervisory Board was a list of KPIs together with their weighting factors, and the method for determining and assessment to be used for end-of-year bonus payments to VEB employees. When developing its KPI system, the Bank was guided by basic approaches to the identification of KPI lists and weighting factors approved by the Supervisory Board in March 2017.
And, finally, the Supervisory Board addressed a number of personnel issues. A decision was taken to appoint Svetlana Yachevskaya as Deputy Chairman of Vnesheconombank – Member of the Management Board. Presently, Svetlana Yachevskaya holds the office of Director of Legal Department at the Russian Ministry of Finance. At Vnesheconombank, Svetlana will coordinate operations related to the functions of the agent for the Government of the Russian Federation, internal and sovereign debt, financial assets of the Russian Federation, and legal groundwork for financial asset management.
Vladimir Shaprinskiy was relieved from the office of Member of the Management Board but retained his position as Chief Accountant of Vnesheconombank.
In conjunction with the St.-Petersburg International Economic Forum 2017, Vnesheconombank will introduce its principal focus areas for promoting Russian innovations.
In compliance with its Strategy 2021, VEB intends in the coming years to increase its participation in rapid-development projects by encouraging investments in those innovative areas where Russia can become a global leader. These include blockchain, quantum and convergent technologies, etc.
At SPIEF’17, VEB holds a panel discussion ‘The Explosive Impact of Blockchain Technology’, which is to take place on June 2 from 9:45 to 11:00. Intended participants include First Deputy Prime Minister Igor Shuvalov, Chairman of Vnesheconombank Sergey Gorkov, Founder of Etherum Vitalik Buterin, Founder and CEO of BitFury Group Valery Vavilov, and Co-Director and President of The M&A Advisors David Fergusson.
The participants will discuss the prospects and risks of blockchain adoption in Russia, the practical potential of the technology in terms of business tasks and the public governance system.
“VEB has everything it takes to fill the niche of a bank for development of Russian innovations. We are ready to finance innovation and NTI projects at the start-up stage of production and service development, as well as support such projects at the stage of business scale-up. This is exactly the idea we intend to elaborate at the forthcoming forum. Blockchain will be the primary focus of our discussion, which is to comprise global leaders and industry experts. Blockchain can substantially improve the quality of governance both in business and public agencies”, Chairman of Vnesheconombank Sergey Gorkov said.
VEB’s stand will have the ‘Investment in Russia’s Future’ display, including innovative solutions and technologies of Russian companies. In particular, VEB’s partners will present Russian inventions in space technologies, medical science, robotics, thin-film materials, communications, etc.
The St.-Petersburg International Economic Forum (SPIEF) has been held since 1997. Since 2006, it has been held under the auspices of the President of the Russian Federation, who has also attended each event. Over the past period, the Forum has become a leading global platform for representatives of the business community to meet and discuss key economic issues facing Russia, emerging markets, and the world as a whole.
The 20th St.-Petersburg International Economic Forum will take place from 1 to 3 June 2017. It has a much more eventful programme as compared to previous years: even now, it includes 108 business events.
The programme is based on four pillars. The first block, Dynamics of the Global Economy, focuses on the global agenda and economy. The second one is devoted to the Russian economic agenda. The third block comprises sessions on new technologies, which are already changing the ordinary course of life. And the last block views human capital as the key vector of development.
Dear friends and colleagues!
The 17th of May is a very special day for our corporation. Established in 1924, Vnesheconombank (VEB) is one of the oldest financial institutions in Russia. However, exactly ten years ago the Federal Law On the Bank for Development was signed, marking a new milestone in the history of Vnesheconombank. The Bank was assigned the ambitious and challenging task of facilitating the modernization of the national economy and its transition to an innovative path of development.
Russia’s economy has received Vnesheconombank’s unwavering support. Major investment projects designed to remove infrastructural constraints and promote the integrated development of Russian regions and high-technology industries have been launched with the participation of Vnesheconombank. This entails dozens of projects in infrastructure, nuclear industry, engineering, iron and steel, defense, space and telecommunications, IT, medical equipment, and pharmaceuticals. Our portfolio comprises loans to support brands that are household names for Russian citizens.
Overall, the Bank participated in 200 projects over the past ten years, with funds extended by Vnesheconombank for the delivery of projects totaling RUB 1.6 trillion.
Today, the Bank is going through the process of large-scale revamping and improvement, perhaps, the most significant in the past ten years. The changes affect every employee and every facet of our corporate life. The challenges VEB is facing today are much greater than a decade ago. The country needs the support, ideas, expertise, leadership and energy of each and every one of us. The revamped Vnesheconombank – VEB 2.0 – is a federal centre of competence designed to accumulate and promote state-of-the-art knowledge and technologies crucial for Russia. VEB 2.0 is to become a strategic national centre for project management and higher labour productivity. It will provide the business and government with innovative solutions in accomplishing priority tasks, aggregate private and public resources and create new opportunities for the participants in the partnership.
First and foremost, Vnesheconombank’s new task will call on each of us to further develop our own inner potential. The Bank and the country need our initiative, responsibility, creativity and commitment to national interests.
When working on Vnesheconombank’s corporate values we identified patriotism as integral to our goals. I know of no other institution in the world where patriotism is a corporate value.
I do believe that this is for a reason, as personal involvement in upholding a strong belief in this country and its people will help us accomplish the objectives we have set. It will also go a long way in securing the well-being and prosperity of Russia for the future!
Chairman of Vnesheconombank
Vnesheconombank continues to select certified managers in Russia’s 23 pilot regions in the context of its new regional model. To date, most of the applications have been received from Moscow, Leningrad Region, Buryatia, Karelia and Novgorod Region.
VEB’s new regional model will enable the direct linking of business ideas in Russian regions with Vnesheconombank’s financial resources and provide the impetus for rapid economic development in Russia’s constituent entities.
“We are receiving applications from regional development institutions, regional branches of the Russian Chamber of Commerce and Industry, business professionals, manufacturers and entrepreneurs. These are people committed to enhancing the investment appeal of their regions and eager to learn and work to achieve this objective’, Deputy Chairman of Vnesheconombank, Member of the Management Board and the Project Curator Alexey Ivanchenko commented. “When selecting managers, we give preference to candidates with an extensive contact base and an insight into the economic environment of their regions. These should be people knowledgeable about project finance tools, in particular, for the projects enjoying support from both regional authorities and the federal government. In early June, we expect to meet with the selected managers and introduce them to governors and the business community in the regions. The first meeting is to take place in the Novgorod Region and then, in other pilot regions”.
In each region, VEB is to select up to three regional managers, who will then identify and screen investment projects in their respective regions. To ensure speedy application processing and decision making, managers will interact with VEB and project initiators online, based on the Development Project Factory platform.
The selection of candidates for VEB’s certified managers in the pilot regions will continue for another two weeks, until May 26. Applications for participation are to be filed via a specialized LEADER-ID platform.
State Corporation “Bank for Development and Foreign Economic Affairs (Vnesheconombank)” is a national development bank and one of the largest financial institutions in Russia. Established in 1924, Vnesheconombank has been operating in compliance with a special Federal Law on the Bank for Development since 2007. Vnesheconombank’s supreme governing body is the Supervisory Board headed by the Chairman of the Russian Government Dmitry Medvedev.
In compliance with the Strategy 2021, VEB will focus on the financing of projects in downstream industries, infrastructure development, promotion of non-resource exports and conversion of the defense industry to civilian products, support for innovations and the National Technological Initiative projects. Seeking to operate at a whole new level of efficiency, VEB will proactively look for projects meeting government priorities, perform in-depth analysis of business projects in cooperation with its customers, attract private co-investments, and monitor project progress based on cutting-edge technologies.
LEADER-ID is ASI’s information platform for the search, development and promotion of leaders. The platform is scheduled to begin operation in July 2013. The number of users exceeds 87 thousand.
VEB 2.0 is to hold a session entitled ‘The Explosive Impact of Blockchain Technology’ with the participation of government officials and Russian and foreign business professionals on the sidelines of the St. Petersburg International Economic Forum.
Currently, as part of the ‘Digital Economy’ government programme development, VEB 2.0 is formulating its proposals for the use of blockchain technology in the Russian public governance system and economy. The work has come as a part of measures to accomplish the tasks set in the Presidential Address to the Federal Assembly.
The Bank proposes to carry out pilot projects on the introduction of blockchain in the Federal Service for State Registration, Cadastre and Cartography (Rosreestr) and the National Pension Fund (NPF). Furthermore, the Bank is developing approaches for an in-house use of the technology: in trade finance transactions and investment project management.
“A few years ago, hardly anyone in Russia was talking about blockchain technology. Today, we are discussing its adoption at the federal level so that this innovation could alter the principles of business, the governance system, and services to the general public. How prepared are our institutions to introduce blockchain? What are the restrictions? Are our resources sufficient? These and other issues will be addressed at the session to be held by the Bank on the sidelines of the St. Petersburg International Economic Forum, Chairman of Vnesheconombank Sergey Gorkov said.
Blockchain is a distributed database that contains information on the transactions effected by the participants. A copy of the common ledger of all transactions is kept by all participants thus creating a distributed environment for trusted electronic collaboration.
Divided into blocks, all information represents a ‘chain of blocks’ so that is impossible to alter such information or penetrate the system without the knowledge of other participants.
Blockchain technology can help substantially reduce the time required for public services, streamline the operational function of government agencies, release employees from routine procedures to save time for more intellectual activities, and enable greater transparency in relations with the government.