Opening remarks by Dmitry Medvedev:

We are having the first meeting of the Supervisory Board today this year. There were significant changes in the corporation last year. We approved the VEB development strategy, devised a new business model, and even changed the name. We came to a decision about long-term support for the repayment of external debt, additional capitalisation through a new mechanism, which was first proposed by VEB, the mechanism of callable capital. Actually, we have created the conditions for a new portfolio of projects and investment in the areas where we basically have strategic interests. This is about the development of industry, transport infrastructure, fleet capacity, and a whole range of other areas.

Today we have projects on the agenda in relation to the development of high-technology industries, the creation of special competencies in this country, which are simply not available at the moment.

I would like to remind you that we have already approved the construction of two large oil tankers and a so-called “shuttle” at the Zvezda shipyard in the Far East. Such support for the shipbuilding industry also has a positive effect on the subcontractors. As a result, we create jobs and infrastructure, build residential areas, and improve the urban environment.

As a continuation of the large shipyard project, we will today consider the VEB Group’s participation in financing the supply of three more tankers. They are intended for the transportation of light oil products and gas condensate. Financial instruments should go through VEB-Leasing. The vessels will encounter difficult ice conditions. Specifically, in the Baltic Sea. The operator will be Sovcomflot. The transaction is estimated at 10 billion rubles.

Another project is related to the development of the domestic microelectronic industry. We also have a lot of very serious problems in this area.

One of the key companies in the industry is Zelenograd-based Angstrem-T. We have already invested in this project. It is necessary to find a solution to enable the company to develop, retain highly skilled jobs, and adopt new technology that is simply not available in this country.

At present, electronic components form the basis of high-technology products in most industries. These are intelligent control systems, telecommunications equipment, radio-electronic goods, bank cards, and the Internet of things.

Domestic microelectronics was a fairly strong industry in the Soviet period. Currently, the share of Russian electronic components in the civilian segment is not significant, even in the domestic market. This is not enough; we have to resolve this issue under the Digital Economy programme.

We have not only to develop domestic demand, but also to promote our products in foreign markets. This is an extremely difficult task, since the global market has now been saturated and shared by major players. Finding our niche will be very difficult. But we need to try to look for it. Moreover, this is not only a matter of competitiveness for us, but also a matter of security.

We will also consider some other issues today.

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Briefing of VEB.RF Chairman Igor Shuvalov after the meeting

From a transcript:

Shuvalov: The year started with two very important transactions. The first transaction is Angstrem-T. We implemented presidential instructions; VEB.RF became the owner of the company.

Today the Supervisory Board considered our corporate responsibility and ongoing business planning for 2019. We drew up the budget and action plan. In addition, we were given instructions from the Government to prepare a capex programme for Angstrem-T. This issue will be discussed with the Government. And when the project is sufficiently advanced, the Prime Minister will consider the investment project, which will be implemented shortly afterwards. Such a project should have public funding, VEB will act as an agent for the Government, helping the Government to carry out this very important investment project.

Another project is Novatek’s three new vessels at the Zvezda shipyard. As you know, VEB has already taken a decision; we placed an order for three large projects, three tankers. We approved a transaction to invest 35 million euros in Novatek’s three vessels. A significant transaction, supporting domestic shipbuilding and domestic companies; Novatek is a flagship company in our economy.

We discussed other current issues. Basically, we received approval for a meeting of the Supervisory Board in a few weeks’ time with different items on the agenda, including in respect of the Project Financing Factory.

Q: Mr Shuvalov, 10 billion (the three new tankers) is what will be financed by VEB?

Shuvalov: VEB will finance the whole transaction.

Q: You will soon come to the Sochi forum. What will be on your agenda there? Any agreements expected, for how much?

Shuvalov: We are not only expecting agreements, we are in the process of signing agreements in advance of the Sochi forum. VEB is preparing a huge agenda in relation to municipal economy development, together with other development institutions, Russian Export Center, DOM.RF, and Russian Small and Medium Business Corporation.

We are preparing a big session, preparing events for large and medium-sized businesses. The agenda will be exciting; we are making thorough preparations.

Q: What is the budget for Angstrem?

Shuvalov: This will be a separate investment project, which requires approval as part of governmental budget procedures. I state it once again, this will be a budget-funded project; if VEB is involved in the project, we will act as an agent for the Government.

The budget for the current year, where VEB is involved, is 3.4 billion roubles.

Q: When will Promsvyazbank acquire Svyaz-Bank’s assets and liabilities?

Shuvalov: As agreed by the Ministry of Finance and Promsvyazbank. It is not a one-day deal; but we don’t have substantial disagreements. We are following the road map that we approved officially.