VEB.RF to Finance Rehabilitation of Yakutsk Airport’s International Terminal

4 september 2019 года
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During the Eastern Economic Forum in Vladivostok, VEB.RF, the Government of the Republic of Sakha (Yakutia), the Far East Development Fund (FEDF) and Yakutsk Airport signed the memorandum of cooperation to carry out the investment project to rehabilitate the international terminal of Yakutsk Airport. The project value is estimated at 1.4 billion roubles.

The document was signed by First Deputy Chairman – Member of the Management Board Nikolay Tsekhomsky on behalf of VEB.RF, Prime Minister Vladimir Solodov on behalf of the Government of the Republic of Sakha (Yakutia), CEO Alexei Chekunkov on behalf of the FEDF and CEO Sergey Ignatenko on behalf of Yakutsk Airport.

“Financing for infrastructural projects, including the construction and rehabilitation of terminals of large airports, is high on VEB.RF’s agenda. On completion of the project, the airport will reach a new level: an expanded geography of international flights and new airlines involved,” Nikolay Tsekhomsky commented.

When the international terminal is built, its passenger traffic will increase from 30,000 to 100,000. The final rehabilitation stage is scheduled for 2021.

“The existing terminal was built nearly a quarter of a century ago and has ceased to meet any modern requirements. The airport is, however, of strategic importance in the context of air travel in the Far East, Siberia, and Asia-Pacific. There’s a reason that Asian investors are already interested in the project. In addition, the rehabilitation of the international airport will contribute to the development of regional tourism-oriented business,” FEDF CEO Alexei Chekunkov said.

VEB.RF pays great attention to infrastructure development in Russian regions, especially the Far East. Built with financial support from VEB.RF and the Far East Development Fund, a new passenger terminal for domestic airlines will begin operation at Khabarovsk Airport. The development institutions invested 3.9 billion roubles in the project. VEB.RF provided financing for the construction of Vladivostok Airport and has plans to take part in the modernisation and construction of the airport infrastructure at Blagoveshchensk and Urengoy.

Yakutsk Airport is the largest international airport located in the permafrost area. It is used to test new aircraft at low temperatures and is an emergency airfield for the refuelling and maintenance of polar and Siberian international flights. The airport is also used for regular direct flights to Moscow, Saint Petersburg, Novosibirsk, Vladivostok, Blagoveshchensk, Krasnoyarsk, Irkutsk, Novosibirsk, Yekaterinburg, Khabarovsk, Ulan-Ude, Harbin, Beidaihe (China), Seoul (South Korea), Kamran (Vietnam) and Krabi (Thailand)

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VEB.RF Publishes IFRS Interim Condensed Consolidated Financial Statements as at 30 June 2019

29 august 2019 года
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VEB.RF published its interim condensed consolidated financial statements prepared in accordance with IFRS as at 30 June 2019.

The VEB.RF Group’s key financial results for 1H2019 are as follows:

  • The VEB.RF Group reported net profit of RUB12.8bn for 1H2019 as against a loss of RUB75.6bn in 1H2018.
  • The Group’s operating income in 1H2019 reached RUB41.6bn as compared to RUB16.6bn in the corresponding period in 2018.
  • The Group’s assets as at 30 June 2019 totalled RUB3,275.2bn, 2.6% (–RUB86.7bn) down from the beginning of the year. Assets decreased due to a reduction in lending, net lease investments, trading securities and amounts due from banks.
    • Lending accounted for 40.6% of the Group’s total assets. As compared to year-end 2018, lending (net of the provision for impairment) decreased by 14.8% (–RUB231.6bn) to RUB1,330.0bn. The decrease was largely due to reclassifying the loans provided by Sviaz-Bank as a disposal group. The lending portfolio was also affected by foreign currency revaluation.
    • The provision for expected credit losses was reversed in the amount of RUB17.0bn in 1H2019 (RUB6.0bn in 1H2018).
  • The Group’s liabilities as at 30 June 2019 totalled RUB2,937.6bn, 4.6% (–RUB140.2bn) down from the beginning of the year, mostly because of decreased amounts due to banks. Amounts due to customers decreased due to reclassifying the amounts due to Sviaz-Bank customers as a disposal group.
    • Amounts due to banks and outstanding debt securities accounted for 50.9% of total liabilities (52.5% at year-end 2018).
  • The Group’s equity in 1H2019 went up by RUB53.5bn (+18.8%) to RUB337.6bn as at 30 June 2019. Equity grew due to net profit and government subsidies received by VEB.RF.
    • In 1H2019 VEB.RF received a government subsidy as the Russian Federation’s asset contribution of RUB15.5bn to offset part of costs related to the fulfilment of obligations arising from foreign borrowings in the capital markets. The subsidy was recognised in authorised capital.
    • In the reporting period VEB.RF also received a government subsidy of RUB9.7bn as the Russian Federation’s asset contribution intended to make a contribution to the share capital of the Far East and Baikal Region Development Fund for the implementation of priority investment projects in the Far Eastern Federal District. The subsidy was recognised in additional paid-in capital.
    • VEB.RF’s capital adequacy ratio in accordance with RAS was 14.8% as at 1 July 2019 (11.8% as at 1 January 2019).
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VEB.RF and Chinese Business Discuss Joint Projects in Beijing

22 august 2019 года
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VEB.RF’s delegation headed by VEB.RF’s First Deputy Chairman – Member of the Management Board Nikolai Tsekhomsky discussed joint projects with China Development Bank (CDB) and Chinese businesspeople in Beijing. Specifically, VEB.RF presented large Russian construction projects such as a wood-processing facility, the Eastern Grain Gate port terminal, and the Meridian road.

The roadshow included negotiations between VEB.RF’s management and executives of Silk Road Fund and China Eximbank, who expressed interest in Russian forest chemistry and trunk infrastructure projects.

“I have a very positive impression of the roadshow. We held several meetings with our partners from CDB, Silk Road Fund and China Eximbank and discussed projects that could be attractive to Chinese business. Interbank cooperation is particularly important for promoting Russian-Chinese economic cooperation. VEB.RF and CDB share a special mission, creating a financial bridge to implement joint initiatives,” Nikolai Tsekhomsky said after the roadshow.

Nikolai Tsekhomsky added that VEB.RF had long-standing relationships with Chinese financial institutions (15 years). CDB is VEB.RF’s strategic partner to implement a financial mechanism for coordinating integration processes across the Eurasian Economic Union (EAEU) and China’s Belt and Road Initiative. VEB.RF’s and CDB’s integration initiatives include several large projects in the area of rail transport and the Northern Sea Route infrastructure.


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Igor Shuvalov Appreciates Udmurtia’s Urban Environment Development Projects

14 august 2019 года
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Heads of Udmurtia’s single-industry towns presented urban improvement projects to VEB.RF’s Chairman Igor Shuvalov. The event took place in the Seti Park, the first Russian sports and landscape park.

The session was moderated by Vyacheslav Pravdzinsky, Urban Environment Development Advisor to the Head of Udmurtia Republic. He highlighted that the opening part of VEB.RF’s official visit is dedicated to a presentation of regional urban development best practices.

Udmurtia’s Head Aleksandr Brechalov shared a successful urban environment improvement case: development of the first Russian sports and landscape park. “I will tell you in about this place a nut shell. It is a skate park. First we called it Seti Park by the name of the main partner Rosseti, Russian energy grids operator. The basketball court was built with the support of T-Plus, one of the biggest Russian power supply companies. Why we decided to organise the first urban development event here? We selected this park, as, in my opinion, it is an exemplary project. It is not a government imposed initiative, this park is the result of grass roots effort endorsed by the government,” Aleksandr Brechalov said.

He turned to Andrey Peredvigin, who earlier contacted him to convey the initiative on behalf of the skaters’ community. “We made a deal with Andrey: he was to bring the project and discuss it. I was to try to raise the funding. I believe that in cases like this one, we should offer a service: fund-raising. Today, this place not only attracts the citizens but also represents an element of Udmurtia’s sports and event tourism. On 7 September, Izhevsk will host for the first time a unique event: a Pump Track World Championship Qualifier. Aleksandr Brechalov added that this project created to improve the quality of urban life may be monetized.

Following his speech, MONOGORODA.RF’s CEO Irina Makiyeva presented an idea to create centres of attraction for tourists and the locals with a high presence of businesses. This idea turned into a project called ‘Centre of Attraction’. “Mr. Shuvalov, you proposed this idea. And you gave an instruction to the single-industry towns. We conducted a poll to ask citizens of single-industry towns about their preferred ways to spend their evenings and free time. The poll showed that 50% of citizens of single-industry towns would like to have a pedestrian street with trees, 30% would like to attend events, and the remaining 20% believe that such a project cannot go without businesses engagement. I would like to ask the heads of Sarapul, Votkinsk and Glazov to present the plans for development of centres of attraction in their towns.”

The heads of single-industry towns presented designs of pedestrian shopping streets to Igor Shuvalov. Glazov Mayor Sergei Konovalov shared the plan of Svoboda Square transformation. “The project enjoys proactive entrepreneurs’ support. The total investment volume amounts to 53.7 million roubles only at the first stage. 47 new jobs will be created. This is a scalable project. We would like to obtain two forms of support from VEB.RF: transport, logistics and architectural consulting and support of small and medium businesses’ comfortable urban environment projects,” Sergei Konovalov said.

Votkinsk Mayor Aleksei Zametayev highlighted the preservation of cultural and historic heritage in his single-industry town. “We took into account suggestions from businesses and the locals and developed a design to improve an unnamed lane which is connecting several central streets. This neighbourhood has iconic locations: Votkinsk Pond embankment and the Memorial Estate of P.I. Tchaikovsky. As per our estimations, the street’s rehabilitation will cost around 300 million roubles. If we make it, this neighbourhood will become an icon place for Votkinsk,” he said.

Sarapul Mayor Aleksandr Essen underscored that the project will give an impetus to entrepreneurship development. “Today, many tourists take river cruises. We succeeded in rehabilitating the embankment in our town. The embankment is interesting for businesses. We are reviewing 8 projects which will create 160 jobs and bring 0.5 billion roubles in investment. We need the assistance of the Single-Industry Town Development Fund in the form of loans and infrastructure support. I am convinced that our concerted efforts will transform our embankment,” Aleksandr Essen said.

To conclude the event, Igor Shuvalov noted the readiness of VEB.RF and the development institutions to take part in the presented projects subject to a more detailed evaluation. “I see that Udmurtia has a team. It is impossible to do anything without partners in any constituent entity of the Russian Federation. It is important to employ all leverage available to the authorities, to build a dialogue between friends, a system of cooperation between regional and municipal authorities. VEB.RF’s team will work where real effect and results are expected. We will work with you. What we saw here today is amazing,” he said.

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Udmurtia Presents 60 Plus Investment Projects to VEB.RF and Development Institutions

14 august 2019 года
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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.

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