First Tranche Provided to Finance Phase 3 of Tula Region Methanol Production
Under the Project Financing Factory programme, financing was provided for the construction of the third phase of methanol production with a capacity of 500,000 tonnes per year in the Tula Region. The project initiator is Shchekinoazot. The first tranche of the syndicated loan is intended for the purchase of Russian-made equipment. The syndicate agent is VEB.RF.
The total project value is 22 billion roubles; the planned term of financing is 12 years.
“VEB.RF’s total commitment in the syndicated loan is up to 4.5 billion roubles. For the rouble-denominated tranches, we have a government subsidy offsetting any increases in the key interest rate throughout the loan term. The project is in accordance with the May presidential decree in respect of promoting non-energy exports. The project implemented in the Tula Region will have a positive impact on the national chemical industry,” VEB.RF’s First Deputy Chairman – Member of the Management Board Nikolay Tsekhomsky said.
“Shchekinoazot has been our long-standing and reliable partner since 2010. We systematically and successfully develop our cooperation. The financing under the Project Financing Factory programme will allow Shchekinoazot to gain an additional competitive edge by reducing the risks that the interest rate may be raised and that the term of financing may be increased during the implementation of the project. The syndicated loan from the financial partners is aimed at paying for construction and installation and for the purchase of Russian-made equipment. VEB.RF provides tranche A, and Gazprombank provides tranche B. Gazprombank’s commitment in the syndicated loan is 10 billion rubles,” Gazprombank’s Deputy Chairman of the Management Board Alexey Belous said.
The project is the third phase of the comprehensive programme to increase methanol production on Shchekinoazot’s production site in the Tula Region, which will enable the company to become one of the largest producers and exporters of methanol in Russia.“On 7 September 2018, on the day when we launched the second phase of methanol production, namely Methanol-450/Ammonia-135, we formally started a new project of Shchekinoazot, Methanol-500,” Shchekinoazot’s Finance Director Andrey Tokarev said. “Work at the facility is now in an active construction phase. Production is scheduled to start in 2022. This will allow Shchekinoazot to produce a total of 1.5 million tonnes of methanol per year. Methanol is in demand in the global and domestic markets. Capacity utilisation in Russia is currently high. Shchekinoazot will have production meeting the world’s highest environmental and energy conservation requirements. The Project Financing Factory is an effective mechanism to support manufacturers, contributing to the timely implementation of our plans to develop the facility and the industrial sector. We are grateful to the financial partners for supporting the project and providing the first tranche of the syndicated loan.”
Twenty New-Generation Underground Carriages Sent from Moscow to Tashkent
VEB.RF has provided financing for the project to supply modern Russian underground carriages for the Tashkent Metro. An official ceremony took place today to mark the supply of carriages to Tashkent. The rolling stock was made by Moscow-based Metrovagonmash (part of Transmashholding, a leading manufacturer of railway vehicles in Russia and the CIS).
The loan agreement to finance the supply of carriages and provide ancillary equipment and services for the Tashkent Metro was signed by VEB.RF and the National Bank of the Republic of Uzbekistan for Foreign Economic Activity (NBU) in late May 2019 in the presence of the Russian and Uzbek heads of state, Dmitry Medvedev and Abdulla Aripov.
“With the support of the NBU, VEB.RF finances the implementation of a significant export project to supply modern carriages for the Tashkent Metro. Apart from the loan of 19.62 million euros given to the Uzbek partner, VEB.RF has issued guarantees of 25 million euros to secure Metrovagonmash’s obligations under a contract of 27.65 million euros. Support for the export of Russian high-technology products is high on VEB.RF’s set of priorities. The Russian and Uzbek financial institutions have already invested a total of over 200 million euros in projects implemented in the republic,” VEB.RF’s Deputy Chairman Daniil Algulyan said.
“The principal goal of Transmashholding is to be as close to the customer as possible, to be perfectly knowledgeable about its operational aspects and to be ready to make an offer technologically and economically efficient to the largest extent possible,” Transmashholding’s Deputy CEO for Urban Transport Development Andrey Vasilyev said.
Natural Gas Processing Plant to Be Built in Nakhodka with Support from VEB.RF and CDB
VEB.RF and China Development Bank (CDB) agreed to enter into a strategic partnership to finance a Nakhodka-based natural gas processing plant.
During the 24th regular meeting of the Russian and Chinese heads of state in Saint Petersburg, VEB.RF and CDB signed a strategic partnership agreement to finance the Nakhodka Fertilizer Plant construction project.
The document was signed by VEB.RF Chairman Igor Shuvalov and CDB President Zheng Zhijie. The agreement is part of the large-scale joint agenda of VEB.RF and CDB in respect of financial support for integration processes within the Eurasian Economic Union (EAEU) and China’s Belt and Road Initiative.
“Today, together with CDB, we have taken another major step forward in investment cooperation between our countries. The construction of the Nakhodka plant is a large and interesting project; it is very important for the Far East and Russia’s economic diversification. During the Eastern Economic Forum, we recently signed the loan documents for Nakhodka Fertilizer Plant with one of Russia’s largest commercial banks, VTB. Now CDB, our long-standing and reliable partner, is a participant of the project. Once more this shows the quality of our joint projects and the high level of trust between the development banks of Russia and China,” VEB.RF Chairman Igor Shuvalov said.
Under the agreement, CDB will provide long-term financing for the VEB.RF and VTB syndicate. VEB.RF is the coordinator of foreign borrowings. The financing for Nakhodka Fertilizer Plant is structured on the principles of the Project Financing Factory. The total design capacity of the project’s first phase is 1.8 million tonnes of methanol per year. Natural gas for production will be supplied from Sakhalin fields. The construction of the plant will start in 2019, and Nakhodka Fertilizer Plant will work at full capacity in mid-2023.When completed, the project will create over 1,500 highly professional jobs in the Primorye Territory. The plant will bring about a massive increase in tax revenue, improve the efficiency of using natural resources and strengthen Russia’s position in the Asia-Pacific markets.
The agreement was signed on the sidelines of the Eastern Economic Forum by VEB.RF’s Deputy Chairman Artyom Dovlatov and the FEDF’s CEO Alexei Chekunkov. The document confirms the parties’ intention to explore the possibilities of jointly preparing and implementing projects for the purchase and subsequent leasing of Sakhalin railbuses.
“Sakhalin residents have recently been the first in Russia to use modern suburban railbuses. This is a good example of a synergy between development organisations, VEB.RF’s leasing mechanism with the FEDF’s financial participation. This work can be continued; the region also needs at least four railbuses,” VEB.RF’s Deputy Chairman Artyom Dovlatov commented.
“The development of the transport and logistics infrastructure of the island is high on our list of priorities. I am confident that the new project not only will benefit Sakhalin residents, but also will be another example of effective interaction within the VEB.RF Group,” the FEDF’s CEO Alexei Chekunkov said.
Natural Gas Processing Plant to Be Built in Nakhodka with Support from VEB.RF
During the Eastern Economic Forum, VEB.RF, VTB and Nakhodka Fertilizer Plant signed loan agreements to finance the construction investment project of Nakhodka Fertilizer Plant in Nakhodka, Primorye Territory.
The total design capacity of the project’s first phase is 1.8 million tonnes of methanol per year. Natural gas for production will be supplied from Sakhalin fields. The design and construction of the plant with financial support from VEB.RF and VTB will start in 2019, and Nakhodka Fertilizer Plant will work at full capacity in mid-2023.
The financing for the project is structured on the principles of the Project Financing Factory. In addition, a preferential loan of 7 billion roubles was given to the project initiator by the Far East Development Fund (part of the VEB.RF Group). The loan agreement is was signed on the sidelines of the Eastern Economic Forum. The loan will be used to finance the preparatory phase of the EPC contract.
When completed, the project will create over 1,500 highly professional jobs in the Primorye Territory. The plant will bring about a massive increase in tax revenue, improve the efficiency of using natural resources and strengthen Russia’s position in the Asia-Pacific markets.