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.
VEB.RF and Primorie Territory Authorities Agree to Cooperate to Improve Infrastructure Quality
Vladivostok hosted a meeting between Primorie Territory Governor Oleg Kozhemyako and VEB.RF Chairman Igor Shuvalov. They discussed potential investment projects for the region and entered into a cooperation agreement. Specifically, VEB.RF expressed its willingness to carry out projects to improve urban environment quality with the extensive involvement of development institutions: VEB-Leasing, the Far East and Baikal Region Development Fund, DOM.RF, Russian Export Center, Russian Small and Medium Business Corporation etc.
VEB-Leasing is willing to support the project to renew urban passenger transport, which will raise speed, safety and passenger traffic, including creating a convenient environment for physically handicapped people.
Financing for the construction of heat supply and water treatment facilities in the Primorie Territory is a priority for VEB-Leasing. The socio-economic effect of such projects is evident: a reduced number of accidents, an improved environmental situation, the locals provided with adequate utility services. This will all directly affect the improvement of quality of life.
“Primorie is known to you in connection with the Russky Island and Vladivostok projects. I hope that the plans related to large-scale urban development and investment projects will be completed as scheduled with your help. It is important for us to have such a reliable partner in the region, a partner that understands the situation and knows the particularities of mechanisms to provide support for small and medium-sized businesses and invest in the road sector. This is extremely important for our region,” Oleg Kozhemyako said.
According to Igor Shuvalov, the Primorie Territory has huge potential; work is under way on planning several regional projects involving major Russian companies. The VEB.RF Chairman emphasised that Russian President Vladimir Putin paid particular attention to Primorie investment projects.
“The Primorie Territory is home to us. Today, I am not alone in Vladivostok: I am a representative of VEB.RF and other development institutions, which are in close cooperation with DOM.RF, Russian Small and Medium Business Corporation and Russian Export Center. We have a big agenda; we visited today Bolshoy Kamen, discussed additional orders for merchant vessels, and will definitely look at the infrastructure built in Vladivostok for an APEC summit. Some facilities need additional investment; specifically, waste treatment facilities. We will consider building a highway. Residential construction is a priority; we know that there are problems, and DOM.RF CEO Alexander Plutnik will give special attention to this agenda,” Igor Shuvalov said.
“It is very important for us to have such a credible partner with experience and expertise. I am confident that our joint projects will benefit Primorie and Vladivostok, not only as the regional centre but also, I hope, the future capital of the Far East,” said Oleg Kozhemyako.
VEB.RF has invested 12 billion roubles in the development of the Primorie Territory. Additionally, the Far East Development Fund has been involved in investment totalling 41.7 billion roubles in regional investment projects, including 8.5 billion roubles of the Fund’s approved investments. As of November 2018, actual investment was 6.3 billion roubles.
VEB is considering Primorie projects in the chemical, petrochemical, shipbuilding, manufacturing, port logistics, transport and related industries. Particular attention is given to urban development projects.
During a visit to Vladivostok on 29 and 30 November, VEB.RF Chairman Igor Shuvalov, together with the heads of Russian Small and Medium Business Corporation, DOM.RF, Russian Export Center and the Far East Development Fund, will discuss the region’s priority projects, see Vladivostok’s urban infrastructure facilities and meet the local business community.
VEB Group’s Team Visits Zvezda Shipyard in Primorie to See Construction of Aframax Oil Tankers
During a visit to the Primorie Territory, VEB Group’s team was invited to see the Zvezda shipyard. The shipyard started the large-scale construction of Aframax oil tankers, which had not previously been built in Russia.
Tanker deadweight tonnage is 114,000; the ice class (1A/1B) will enable the ships to be used for year-round navigation in ice-bound conditions. The propulsion systems of the green tankers allow them to use both conventional fuel and environmentally friendly natural gas, which ensures compliance with the new pollution control rules for the Baltic Sea and the North Sea. The first tanker launching is scheduled for 2020. At present, the shipyard has orders for 12 Aframax oil tankers.
The Zvezda product range will include vessels with a displacement of up to 350,000 tonnes, components of offshore platforms, ice class vessels, merchant cargo vessels, special vessels and other marine equipment of any complexity, including equipment that had not previously been made in Russia due to the unavailability of launching and hydraulic facilities.
During the Eastern Economic Forum, VEB Group, Rosneft, Zvezda and Sovcomflot entered into several contracts to build two oil tankers for subsequent long-term chartering. In late October 2018, the Supervisory Board of VEB resolved to approve the transaction.
“Support for this sector has a positive impact on the development of related industries, which is a priority for VEB Group as a development institution. VEB.RF is currently considering eight projects aimed at developing the shipbuilding industry in the Primorie Territory; VEB Group’s potential investments are more than 200 billion roubles. The launched projects will create new jobs and improve quality of life,” VEB.RF Chairman Igor Shuvalov emphasised.
VEB Group’s team also visited the construction site of residential houses for future employees of the Zvezda shipyard in Bolshoy Kamen. Two 68-flat houses have already been accepted for operation and occupied. Construction is well under way for a whole urban block in the 6th residential estate. The contractor was selected for the construction of residential houses in two more neighbourhoods. Overall, there are plans to build about 5,000 flats by 2023, which will provide housing for all employees. The possible expanded involvement of the Far East Development Fund (part of VEB Group) in residential construction projects to provide houses for Zvezda employees is under consideration. In collaboration with DOM.RF, the Fund is carrying out the project as instructed by the Russian President.
A session of the Federation Council passed legislation to change the name of State Corporation Vnesheconombank to VEB.RF, introducing several new functions, such as its role as a development institution coordinator.
The amendments are to be made to the Federal Law On the Bank for Development and certain legislative acts of the Russian Federation.
The law changes the name of State Corporation “Bank for Development and Foreign Economic Affairs (Vnesheconombank)” to State Development Corporation VEB.RF.
The law also assigns new functions to VEB.RF to coordinate the development institutions’ activities as resolved by the Russian Government.
Another law amends the Budget Code. The Government will approve resolutions concerning the authorised capital of VEB.RF in the form of paid-in capital and the amount of its authorised capital that should subsequently additionally be contributed by the Russian Government (callable capital).
State Corporation "Bank for Development and Foreign Economic Affairs (Vnesheconombank)" redeemed its Eurobonds Series 9 issue on November 21, 2018.
The Eurobonds for a nominal amount of US$ 850 mn were issued on the Irish Stock Exchange in 2013 with a five-year maturity period and an annual coupon rate of 4.224%.
The redemption of the Eurobond issue and coupon payments were executed in full and in accordance with the terms of the prospectus.
Irish Stock Exchange cancelled listing of Eurobonds Series 9 with effect from 21st November 2018.