Interest-Free Loans Backed by VEB.RF and RSMB Corporation: Monotowns Fund to Finance Investment Projects for One-Factory Towns
Investors will be able to get far greater financial backing from the Monotowns Development Fund. As resolved by the Supervisory Board of the Fund, loan maturities will be extended from 8 to 15 years, the Fund’s maximum share in financing for a project will increase from 40 to 80% of the project value, while the Fund’s minimum share in financing for an investment project will decrease from 100 to 10 million roubles. The time required to examine documents submitted by project initiators will be reduced from 65 to 35 business days.
Any investment project worth 250 million roubles or less financed by the Fund will be eligible for an interest-free loan, provided that collateral is only bank guarantees and/or surety bonds issued by RSMB Corporation/SME Bank and/or guarantees issued by VEB.RF.
The Supervisory Board of the Fund approved several other decisions. For instance, changes were made to the co-financing procedure for expenses incurred by Russian regions and municipalities to carry out construction and/or rehabilitation projects for infrastructural facilities in single-industry towns. Applications for such co-financing can now be submitted to the Fund electronically.
It is intended that the decisions will increase the number of investment projects with potential financing from the Fund, will expand regional coverage and will provide greater support for small and medium-sized businesses to promote municipal economy development projects for single-industry towns.
The meeting of the Supervisory Board approved the Fund’s co-financing for the investment project to rehabilitate the existing production of terephthalic acid at POLIEF in Blagoveshchensk, Bashkortostan. The Fund will lend 1 billion roubles at 5% p.a. for 8 years. POLIEF is a subsidiary of SIBUR. The project is intended to rehabilitate the existing production of terephthalic acid, primary feedstock used to make modern plastic packaging for fluid foods. The project is expected to increase output to 350,000 tonnes per year. POLIEF is Russia’s biggest producer of terephthalic acid and polyethylene terephthalate.
The Monotowns Development Fund is a not-for-profit organisation founded by VEB in 2014. The Fund is a national development institution whose activities are focused on creating the necessary conditions for new jobs and investment in one-factory municipalities, along with improvements to the urban environment. The Memorandum on Financial Policies of VEB.RF specifies that the development of one-factory towns, including building their infrastructure and industrial facilities, is a high priority.
Heads of Development Institutions Meet to Discuss Primorie Investment Projects
The heads of VEB.RF, Russian Export Center, Russian Small and Medium Business Corporation, the Far East Development Fund and DOM.RF visited Vladivostok to discuss the implementation of investment and infrastructure projects in the Primorie Territory.
The meeting participants paid attention to the region’s export potential and noted the necessity of promoting small and medium-sized businesses in the Primorie Territory to unlock its potential to the fullest extent. The meeting was also attended by representatives of the Primorie Territory administration and the local business community.
The meeting was started by VEB.RF Chairman Igor Shuvalov speaking about the coordinated work of development institutions on comprehensive solutions for regional pressing problems. “We, the four organisations, satisfy the needs of businesses from micro enterprises all the way through to major companies and ensure the interaction with regional banks, our major nationwide banks. We would like to understand: what is your sentiment, how do you think we can cooperate. We will reply with our definite proposals,” Igor Shuvalov said.
The VEB.RF Chairman underlined that, with a long-time presence in the region, DOM.RF was involved in several housing projects, which were to be discussed by the company’s CEO Alexander Plutnik during his visit to Vladivostok. According to Shuvalov, RSMB Corporation has also ambitious goals in the Primorie Territory, and its activities will include developing the local urban environment. Igor Shuvalov additionally noted Vladivostok’s key role in developing regional export and emphasised Russian Export Center’s great efforts on this agenda.
The importance of export development was also emphasised by Primorie Territory Vice-Governor Konstantin Bogdanenko. “It is reasonable to hold a forum for exporters in Vladivostok and make it an annual event oriented to Northeast Asian markets,” Bogdanenko said.