Supervisory Board Considers VEB.RF’s Involvement in Large-scale Projects to Strengthen Russia’s Export Potential
On the agenda: projects for the construction of a mining and smelting facility in the Trans-Baikal Territory and a gas-processing plant in the Amur Region; corporate governance issues.
Opening remarks by Dmitry Medvedev:
At today’s meeting of the Supervisory Board, we will discuss several large-scale projects aimed at developing the Far East, which are strategically significant for the Russian economy and for strengthening Russia’s export potential.
I would like to mention several projects that require substantial investment and are of considerable importance.
The first one is the construction of a mining and smelting facility to develop the Udokan copper deposit in the north of the Trans-Baikal Territory. The Udokan deposit is the largest in Russia. The comprehensive development of the deposit involves building an infrastructure to mine the ore, extract the concentrate and create a high-technology cathode copper production facility. Upon completion of the first project phase, the production capacity is expected to reach 12 million tonnes of ore per year.
The project will be carried out under the Project Financing Factory programme. This is just one of the projects selected for this financing mechanism. A total of about 3 billion US dollars will be invested in the project. Approximately one third of the funds were committed by the project initiator. The rest will come from a syndicate of banks, including VEB.RF.
The project is extremely important for the Trans-Baikal Territory. It will create about 2,000 new jobs. The region is in a very difficult situation, and such ambitious projects are definitely needed to bring in modern job opportunities, change the employment pattern and develop the local economy. It is intended that both infrastructure and service facilities will be constructed. There are plans to use public budget funds to renovate the local airport in addition to the construction of power lines and the implementation of other appropriate measures required for the project’s success.
The second project is the construction of the Amur gas-processing plant in the Svobodny advanced development zone, Amur Region. The new plant is expected to become the world’s largest helium refinery and the world’s second largest gas-processing facility. Its feedstock will be high-quality methane to be supplied from natural gas fields in Eastern Siberia via the Power of Siberia pipeline and converted into added-value gas products. The project will create up to 3,000 new jobs.
The project budget is large, about 19 billion euro. Gazprom’s commitment is one third of the required funds, the rest will be provided by a pool of Russian, Chinese and European lenders. VEB.RF’s commitment is expected to be 1.5 billion euro. Its contribution will help to complete this large-scale project, which is strategically important for the country’s development.
We will also discuss a whole range of corporate issues and several transactions, including a compensation-free transfer by VEB of Sviaz-Bank’s shares to the ownership of the Russian Federation, to the treasury of the Russian Federation.
Established with financial support from VEB, Xelent Data Center has become the first among Saint Petersburg’s commercial data centres to be officially Tier III certified.
The Uptime Institute Tier Standard: Topology is acknowledged worldwide as a benchmark of reliability for data centres and their users. Tier III is an extremely high reliability standard for equipment and infrastructure. Tier III-certified data centres are notable for their concurrently maintainable infrastructure (including the replacement of system components and faulty hardware).
Counting Xelent, only 28 data centres in Russia have Uptime Institute certification. Less than a dozen of them provide services on a commercial basis. Tier III or higher certification is the first thing needed by potential data centre users seeking reliable and uninterrupted operation.
“Developing the digital economy’s nationwide infrastructure is a business priority for us. With a more than 25 per cent market share, Xelent is now the leader in the Saint Petersburg data centre market. This project will help to increase traffic and resource concentration across the country,” VEB.RF’s First Deputy Chairman Nikolay Tsekhomskiy said.
Designed to accommodate more than 70,000 IT equipment units, the data centre ensures smooth IT infrastructure operation for hundreds of Russian companies in such industries as transport, logistics, finance, retail and wholesale, and public institutions. The data centre also houses the equipment of Europe’s largest social media platform. Every day, over 90 million active users send client requests to the company’s servers located at Xelent Data Center.
The project has won numerous awards from reputable expert communities for unique technological solutions, which is indicative of the creation of unique competencies in the country.
Uptime Institute is a world-renowned unbiased certification authority that develops its own reliability standards for data centres. The standards are built on international best practices in the creation and operation of data centres. Unlike other globally recognised certifications, Uptime Institute standards are primarily designed to serve enterprise organisations and protect investment in data centres. This approach makes it possible to set all reliability and security requirements for a future data centre at the design stage and create the optimum operation conditions, thus improving project economics.
VEB.RF issued short-term bonds in additional placements to companies and corporations on 20 and 21 March 2019.
The Bank raised 13.84 billion roubles, including 13.5 billion roubles from bonds with a maturity of 14 days and a coupon of 7.61% p.a. and 0.34 billion roubles from bonds with a maturity of 21 days and a coupon of 7.61% p.a.
The par value of one bond is 1,000 roubles. The bonds were sold at 100% of their par value. The coupon is payable at maturity.
The arrangers of the bond issue are Gazprombank and Svyaz-Bank.
The bonds are on the Moscow Exchange’s Quotation List Level 1. The depository is National Settlement Depository.
Russia’s Exporter of the Year Award to Go to Best Businesses Operating in Foreign Markets
The award is established as part of the International Cooperation and Export national project.
The winners will be selected in two stages, first in all federal districts and then at national level. The award ceremony will be held in late 2019 during the Made in Russia Forum with the participation of top public officials.
“Exporter of the Year is awarded to support and grow export-oriented domestic businesses, and to discover and encourage the best exporters and promote best practices in international trade,” Andrey Slepnev, Russian Export Center CEO, said.
The award categories include Industrial Exporter of the Year, Service Exporter of the Year, Agribusiness Exporter of the Year, High Technology Exporter of the Year, Breakthrough of the Year (special category for SMEs), and New Geography (special category for large businesses).
The award is notable for its national level of recognising exporters’ achievements and for its wide geography across Russian regions and federal districts.
The award application form can be completed online on the Russian Export Center website at https://www.exportcenter.ru/awards/. The applicants will be ranked based on the declared export profile. At the initial stage, the exporters will be requested to provide a minimum set of documents.
For further information, participants may call +7 495 967 12 58 (ext. 1170) or email email@example.com.
VEB.RF, Development Institutions and METRO Cash & Carry to Launch Integrated Development Programme for Small Urban Trade Businesses
During the METRO Expo trade fair, VEB.RF, RSMB Corporation, SME Bank, DOM.RF and METRO Cash & Carry signed a cooperation agreement. The parties agreed to encourage SME development and provide support for individual entrepreneurship, such as support for the expansion of a corner shop chain and mobile food businesses.
The parties to the agreement will lend comprehensive support, from the search for shopping premises to financial, guarantee and leasing support for small businesses, agricultural cooperatives and farmers to the expansion of marketing channels through the sale of their products, including as part of the Bean franchise programme.
The agreement was signed by VEB.RF’s Chairman Igor Shuvalov, RSMB Corporation’s General Director Alexander Braverman, DOM.RF’s CEO Alexander Plutnik, METRO Cash & Carry Russia’s General Director Jerry Calmis and SME Bank’s First Deputy Chairman of the Board Denis Ursulyak.
“The creation of a comfortable urban environment is not limited to the implementation of large-scale long-term projects. The agreement that we signed today is a good example of efficient cooperation between development institutions and businesses, where each is ready to offer support measures aimed at helping to grow the food retail chain. Our primary goal is to improve the quality of life,” VEB.RF’s Chairman Igor Shuvalov said.
DOM.RF will offer businesses comprehensive support in relation to commercial real estate and banking services, including providing information on real properties eligible for the programme, DOM.RF Bank’s services and DOM.RF’s direct assistance with project implementation.
“The development of small and medium-sized businesses is essential for creating a comfortable urban environment and infrastructure. The standard of integrated spatial development, which is being defined by DOM.RF, recommends allocating ground floors of residential buildings to small and medium-sized businesses so that people can use a variety of retail outlets and service centres in the neighbourhood,” DOM.RF’s CEO Alexander Plutnik commented.
“Providing businesses with new opportunities to fulfil their potential within the Russian SME segment is of great significance. It is critically important that the initiatives come from major market players with considerable potential and experience that can be shared with small businesses eager to promote cooperation. RSMB Corporation is willing to provide full-scale support for the participants of the METRO Cash & Carry project, including financial, information and other support; project participant selection; assistance to agricultural cooperatives and farmers in expanding their marketing channels,” RSMB Corporation’s General Director Alexander Braverman said.
SME Bank’s First Deputy Chairman of the Board Denis Ursulyak emphasized: “Small and medium-sized businesses help to form the urban environment and foster people’s well-being and comfort. It is extremely important to support this segment. Our agreement consolidates various financial and non-financial measures to support businesses and offers SMEs opportunities for growth. For us, as a bank supporting small and medium-sized enterprises, it is the primary objective and the principal goal.”
METRO Cash & Carry will give domestic entrepreneurs assistance in equipping their retail facilities and provide recommendations and expert assistance for private retailers, specifically under the Bean programme.