State Duma Committees Agree to New Legislation on VEB.RF’s Coordination of Development Institutions
The Budget and Taxes Committee and the Financial Market Committee of the State Duma supported new legislation clarifying the functions of VEB.RF. The committees recommended that the Council of the State Duma should introduce it for its first reading in the lower house.
The Russian Government introduced two bills to the State Duma on 31 October 2018, amending the Budget Code, the Law “On Bank for Development” and other laws that regulate the activities of Russian Export Center and Russian Small and Medium Business Corporation.
It is proposed that the budget legislation should include a new mechanism, namely the approved amount of authorised capital. This is the portion of authorised capital that, as resolved by the government, will be allocated to a development institution for new projects.
VEB is assigned the role of a coordinator of development institutions (as resolved by the Russian Government). For this purpose, VEB will participate in managing development institutions and formulate procedures for joint work on projects in order to ensure that instruments of support will be used in an integrated manner.
The draft legislation also concerns the name of Vnesheconombank; the renamed institution will become State Development Corporation VEB.RF. The new name reflects the role of VEB and its tasks assigned by the Russian President and the Russian Government.
The Monotowns Development Fund (MDF) has lent 1 billion roubles to Hevel for an investment project in the single-industry town of Novocheboksarsk, Chuvash Republic. The funds were loaned for eight years at a rate of 5% p.a. In July 2018, the Supervisory Board approved MDF’s financial participation in the project designed to increase the production line annual capacity to 250 MW using Hevel’s Novocheboksarsk-based production facilities. The total project value is 2.8 billion roubles.
Along with MDF, the project is financed by the Industry Development Fund. The project is expected to increase the output of solar modules for the growing domestic market and for the export of finished products. The project will create 90 new jobs. The technology introduced by the Project (renewable energy sources) is on Russia’s critical technology list in compliance with Decree No. 899 of 7 July 2011 ‘On the Approval of Priorities in the Development of Science, Technology and Engineering in the Russian Federation and of the Critical Technology List of the Russian Federation.’
The Monotowns Development Fund is a not-for-profit organisation established by Vnesheconombank in October 2014. The Fund’s objective is to create an environment for new jobs other than with major local employers and to attract investment in single-industry towns through infrastructure and investment projects. The Fund co-finances expenses incurred by Russian constituent entities and municipalities when constructing and rehabilitating infrastructure facilities required for new investment projects, finances investment projects, performs the functions of a project office to develop single-industry towns and organises project management teams to improve the social, demographic and economic status of single-industry towns. The Fund operates in strict compliance with the regulations on the federal budget subsidies as approved by the Russian Government’s Resolution No. 1186 of 11 November 2014.