Udmurtia Presents 60 Plus Investment Projects to VEB.RF and Development Institutions
The development institutions team headed by VEB.RF’s Chairman Igor Shuvalov visited Udmurtia on a business mission.
On the first day, REC, DOM.RF, RSMB Corporation and the Single-Industry Town Development Fund representatives held round-table discussions and training seminars for local entrepreneurs, and presented financial and non-financial support measures.
On 14 August, VEB.RF’s Chairman Igor Shuvalov and the Head of Udmurtia Republic visited a sports and landscape park, Seti Park, and discussed the development of urban infrastructure. The town of Izhevsk developed design of public spaces to improve 40.8 ha to create a comfortable urban environment. KB Strelka and other Russian architecture bureaus were commissioned by the DOM.RF Fund to develop the design.
During the visit, RSMB Corporation representatives held a meeting with local entrepreneurs to discuss the implementation of business financial support measures. The efficient cooperation between the regional government and RSMB Corporation resulted in an eight fold growth of local business preferential loans portfolio in the last three years. Small and medium businesses’ profit grew on average almost by 30%.
REC representatives visited Elekond plant, a Russian condensers production leader. The plant is targeting export development. REC Group is ready to offer its financial and non-financial support measures to the plant.
MONOGORODA.RF’s delegation had a meeting with local businesses. Investment projects in the amount of 3 billion roubles in single-industry towns Glazov, Sarapul and Votkinsk were presented. The meeting selected three the most mature projects. The Fund is expected to extend a loan for more than 200 million roubles. The projects will create around 400 jobs.
The development institutions delegation visited the LADA Izhevsk plant, one of the main Russian light motor vehicles manufacturers. VEB.RF is financing the plant’s upgrade in the amount of 60 billion roubles which enables manufacturing of new car models, including for export markets, and creating local jobs.
To conclude the business mission, VEB.RF’s Chairman Igor Shuvalov said: “We see concerted and professional effort of the Head of the Republic’s team. Today, we have discussed projects implemented not only in the republican capital but also in small towns. These are energy, public transport, engineering, and modern urban environment projects. All the projects are well prepared and pre-screened with potential investors, VEB Group, professional advisors. The business mission shall yield specific results. Udmurtia will get new jobs; its economy will become more competitive.”
Head of Udmurtia Aleksandr Brechalov said: “Together with VEB.RF and PricewaterhouseCoopers we carried out an investment opportunities audit. The results of the audit were presented in St. Petersburg. The audit resulted in a road map for external and internal potential investors. Today we added 61 projects in the amount of 95 billion roubles to the road map. Our partnership with VEB.RF and its development institutions is clearly evidenced by the numbers: jobs and budget revenue increase. The support only by the Single-Industry Town Development Fund created 110 new jobs in Udmurtia during the last two years; the Fund provided financing in the amount of 240 million roubles. Since 2015, the cooperation with RSMB Corporation helped republican businesses to obtain more than 2.4 billion roubles in loans. In this respect, our approach meets the approach of Mr. Shuvalov’s team. VEB.RF is our strategic partner. All we want to achieve are jobs with decent wages and salaries, improvement of quality of life and a stronger regional economy. The national projects initiated by the Russian President and the social funding require our services. The projects’ implementation is difficult without a strong export-oriented economy and improved workforce productivity. Therefore, I would like to congratulate VEB.RF’s team for the partnership and the support,” he said.
VEB.RF is a state development corporation. In partnership with commercial banks and investors, VEB.RF is involved in national projects designed to support high value-added manufacturing, non-resource exports, urban and infrastructure development. VEB.RF coordinates activities of the largest national development institutions: Russian Export Centre, DOM.RF, RSMB Corporation, the Far East and Baikal Region Development Fund, MONOGORODA.RF.
Dmitry Medvedev and Igor Shuvalov discussed VEB.RF’s involvement in investment projects related to urban planning and development.
From a transcript:
Medvedev: When somebody mentions VEB as a development corporation, all manner of major economic projects usually come to mind. This is natural because VEB contributes to them in some way or other, by either lending to them, or acting as a guarantor, or participating as a partner. However, VEB also does other important things.
I’ve been to Tula recently and met with architects and builders. We discussed urban spatial development. By the way, your representative was there too. I know this issue has also become an important area where VEB works as a development institution, and you invest both intellectual and financial resources. Tell me more about it, will you?
Shuvalov: Our supervisory board, which you chair, indeed regularly considers the largest transactions that contribute to economic development in Russia. We have prepared several such major transactions. The board are to meet in the next few days to discuss them under your supervision. These transactions promise to be an exciting experience. Speaking of urban development and the urban economy, this is now one of our main concerns.
We paid close attention to preparations for the Tula meeting and its outcome. It was a very interesting event, attended by young architects and urbanists. The new legislation on State Development Corporation VEB.RF—as related to functions and coordination— allows us, Dmitry Anatolyevich, to take a basically different approach to urban development. As you instructed, the scope of coordination extends to VEB.RF, Russian Export Center, DOM.RF and Russian Small and Medium Business Corporation.
We are looking to invest adequately in different segments of the urban economy. We have chosen 100 urban areas, the 100 largest cities in Russia, except for Moscow and Saint Petersburg. This doesn’t mean that we aren’t involved in projects there …
Medvedev: They can take care of themselves.
Shuvalov: They’re under the direct supervision, so to speak, of both the Government and the President. And they take full advantage of it.
Speaking of the 100 cities, we’ve agreed that a separate track is to provide training for city teams, those who manage the urban economy. And 109 projects for 45 of the 100 cities are currently under consideration separately. The projects are related to clean water, sewage treatment and work on upgrading urban public transit, building modern housing and transforming municipal services, and this is the right job for small and medium-sized enterprises. For this purpose, we use all the tools available to each development institution, including equipment leasing.
We send business missions, travel to the cities. Our joint business missions have already visited Vladivostok, Yuzhno-Sakhalinsk and Ivanovo. All our teams make preparations beforehand, studying the projects. When we then all get together to assess the projects, they not only give project presentations but also defend the projects. Our business units then start working on the projects. We make sure it’s understood that loan agreements need to be signed within a certain time to set any project in motion. We’ve already achieved something tangible. For example, we are preparing to approve the loan agreements in Ulyanovsk and Nizhni Novgorod. We’re also organising a high-profile trip to Udmurtia, where we were a year ago, to see how the projects are progressing. Overall, we do exciting, well-coordinated work. We work in close cooperation with the Ministry of Economic Development; they find urban planning and development very important too. As for the Ministry of Finance, we are currently collaborating with them to modernise urban public transit in partnership with major organizations such as Transmashholding and Sinara Group. We’ve set up a good project in Moscow jointly with Transmashholding, and we are trying to extend this experience to other cities. We’ll ask you to allow us to use the National Wealth Fund for these purposes. As for the Ministry of Finance, we routinely work with them on specific details of the projects.
Medvedev: You should also work with the Construction Ministry. Strictly speaking, urban planning policy is in their hands rather than under the control of the Finance Ministry or the Economic Development Ministry.
It’s a big issue for a huge number of city dwellers. We understand that people who live in urban areas—especially other than the capitals, even outside the regional capitals, in small towns—want their places to be as comfortable at least in some way as the modern urban environment in the largest cities of this country.
This is really what is very important. How can we do it? The point is that our urban planning policy was not ideal in Soviet times, but it wouldn’t work now anyway because the requirements and economic conditions have changed. To formulate a new policy on urban planning and give training to prepare modern teams, as you mentioned, are an extremely important topic.
When I was in Tula, I saw: if it weren’t for the new team, if it weren’t for the work of the people who came to pursue various initiatives, nothing would probably have been done there.
That is why it’s necessary to help our regions and particular cities to build competencies and recruit people who are ready to do this. Somebody, of course, can come from the capitals; but it’s better to rely on the local workforce and train them. In this context, VEB has all the required competencies. I hope you’ll make use of them.