VEB.RF Intends to Create National Certification System for Infrastructural Projects
State Development Corporation VEB.RF, the National PPP Development Center and AECOM have agreed to develop a national due diligence and certification system for infrastructural projects on the principles of sustainability and quality infrastructure investment. The agreement was signed today at the Russian Ministry of Finance in the presence of Deputy Minister of Finance Sergei Storchak. The document was signed by VEB.RF’s Deputy Chairperson and Member of the Board Svetlana Yachevskaya, the National PPP Development Center’s General Director Pavel Seleznev and AECOM’s Managing Director Roberto Cialone.
According to the originators, the Russian project assessment system created in partnership with reputable international companies will increase the confidence of foreign investors in local projects. Project initiators will be able to have their projects assessed for compliance with the world’s best standards and practices and attract additional investment.
Sergei Storchak, Deputy Minister of Finance of the Russian Federation: “With tight deadlines and limited resources, it is important to adopt a comprehensive approach to the implementation of infrastructure development plans. At the moment, Russia doesn’t take a unified approach to due diligence for infrastructural projects. A systematic approach to assessing projects is consistent with international best practices and the principles of quality infrastructure investment (QII) reflected in the G20 Osaka Leaders’ Declaration of 29 June 2019.”
Svetlana Yachevskaya, Deputy Chairperson and Member of the Board, VEB.RF: “VEB.RF intends to collaborate with our partners on creating a national due diligence and certification system for infrastructural projects on the principles of sustainability and quality infrastructure investment. The introduction of such due diligence will help to identify the project’s weaknesses the at the initial stage, which will make the project more attractive to investors and maximise the positive economic, environmental, social and other effects from its implementation. And, as a consequence, this will have a positive impact on the infrastructure market in the Russian Federation.”
Pavel Seleznev, General Director, National PPP Development Center: “This is not the first year that we have noticed a sufficient quite a large number of poorly designed project initiatives in the Russian market, both on the part of public partners and on the part of private investors. In infrastructure, quantity and quality should complement each other. That is why it’s important to formulate common rules and build a uniform project assessment system that all market participants could use to prepare projects on the principles of quality infrastructure investment at the very initial stage.”
Roberto Cialone, Managing Director, Russia & East Europe, AECOM: Understanding the needs of the infrastructure investment market in contemporary Russia, we strive to improve the quality, reliability and efficiency of projects and are willing to invest our experts’ knowledge and time in joint systematic work. We look ahead from the perspective of responsible investment, help our clients to give due consideration to the interests of future generations, and set ourselves strategic goals of promoting and applying the principles of sustainability and quality infrastructure investment in Russia.
Within a month after signing the agreement, the parties are to submit a road map for developing the national certification system. It is intended that the process of creating methodological approaches to mechanisms for selecting and assessing infrastructural will include public discussions and actively involve market participants and the expert community.
The principles of sustainability and quality infrastructure investment are aimed at incorporating environmental, social and managerial factors into investment decisions. This makes it possible to improve risk management and produce sustained and long-lasting effects throughout the project’s life. Such an integrated approach is now extensively promoted in numerous countries, including by establishing international sustainability assessment and rating schemes, such as CEEQUAL, United Kingdom; Envision, United States; Greenroads, United States; Infrastructure Sustainability, Australia; and Pearl, UAE.
Daniil Algulyan: Aggregate Export Support Portfolio Exceeds RUB500bn
Export support is high on VEB.RF’s list of priorities. VEB.RF is active in cooperating with Russian Export Center in this area and is deeply involved with the International Cooperation and Export national project. VEB.RF provides support for Russian non-energy exports throughout value and supply chains, from financing investment projects to manufacture export products to helping to perform supply contracts for foreign buyers.
VEB.RF can offer exporters a complete range of finance products: project financing, pre-export and export financing, performance bonds.
The year 2019 marked an important milestone in support for Russian non-energy exports. Loans and guarantees issued in this area totalled about 115 billion roubles, while the aggregate export support portfolio exceeded 500 billion roubles. The key sectors that received support in 2019 were power engineering, railway equipment and urban transport. Uzbekistan became one of VEB.RF’s largest partners in export projects in 2019.
VEB.RF contributed to the successful completion of transactions to supply underground carriages and power equipment. Belarus, Kazakhstan and other EAEU member countries remain no less important markets.
New export support projects are well under way in the Middle East, Africa and Latin America. Much of the groundwork was also done in 2019 for new projects in the years ahead. A large number of transactions are planned for Eastern Europe and South-East Asia. An important area of VEB.RF’s activities is now projects in roubles and national currencies. Last year, rouble-denominated transactions took the lead in cooperation with EAEU member countries. We expect the geography of such transactions to expand considerably in 2020.
Major transactions and agreements in 2019
- Agreement with Belarus to provide support for exports to third countries
In December 2019, the Belarusian Government and VEB.RF agreed on the terms and conditions of VEB.RF’s support for both Belarusian exports and Russian-Belarusian joint exports to third countries. The main changes in 2019 allow the export support mechanism to be used for exports not only to Russia but also to third countries (outside the United State of Russia and Belarus).
“Belarusian manufacturers can now take advantage of the Russian programme to have subsidised loan interest rates for the export of Russian-made components in their end products. Buyers from third countries will, in turn, be able to use the Belarusian programme subsidising interest rates for products imported from Belarus and containing Russian components,” VEB.RF’s First Deputy Chairman Nikolay Tsekhomsky said after the signing ceremony.
- Trade mechanism agreement between Russia and Africa
At the Russia-Africa summit, VEB.RF, Sberbank, Russian Export Center and Gemcorp Capital LLP signed a framework agreement to create a trade finance mechanism for Russia and Africa. The agreement value is 5 billion US dollars, reflecting the needs of Russia and Africa for joint financial solutions.
The agreement is aimed at developing cooperation with African countries through the organisation of lending mechanisms for joint foreign trade projects and opens up opportunities for increasing Russian exports through financial support for the supply of Russian goods to the African continent, including to Angola, Ethiopia, Mozambique, Zimbabwe and other African countries.
- Financing for the project to supply new underground carriages to Uzbekistan
An official ceremony took place in September to mark the VEB.RF-financed supply of modern Russian underground carriages to Tashkent. The rolling stock was made by Moscow-based Metrovagonmash (part of Transmashholding).
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.