Economic Partnership Strategy 2025 Prepared with VEB.RF’s Participation to Receive Approval at BRICS Summit in Saint Petersburg in July
A meeting of the BRICS Contact Group on Economic and Trade Issues in Moscow on 26 February supported VEB.RF’s proposals for the Strategy for BRICS Economic Partnership. It is intended that the proposals will be submitted to the BRICS leaders at the Saint Petersburg summit in July 2020.
Zarina Tsekoeva, Vice-President of Strategy, reported to the meeting on these activities and VEB.RF’s contribution to the implementation of national projects in Russia.
In her report on the principal areas of economic cooperation among the BRICS member countries, Tsekoeva drew attention to the issues related to the Sustainable Development Goals, the principles of responsible investment, the agenda for the presidency of the BRICS Inter-Bank Cooperation Mechanism, and the necessity for the BRICS member countries to take part in formulating the common principles of responsible investment.
The report of the Russian Ministry of Economic Development put particular emphasis on digital transformation and sustainable development, including in respect of remote and rural areas. In addition, representatives of Global Rus Trade reported on the establishment of the BRICS Business Women Alliance; research experts and members of the BRICS Expert Council presented a review of BRICS trade relations, noted the importance of supporting infrastructural projects of the New Development Bank, and emphasised the need to work towards the UN Sustainable Development Goals 2030.
VEB.RF holds the presidency of the BRICS Inter-Bank Cooperation Mechanism in 2020.
VEB.RF and Sberbank Agree on Basic Terms and Conditions of Financing for Korbalikhinskoye Deposit Development
VEB.RF, Sberbank and Ural Mining and Metallurgical Company (UMMC) have signed a term sheet to finance the development project for the Korbalikhinskoye polymetallic deposit in the Altai Territory and rehabilitate the Rubtsovsk concentrator with the aim of increasing its annual capacity to 1.5 million tonnes of ore. It is intended that the project will use the Project Financing Factory mechanism.
The total project value is estimated at 38 billion roubles, including about 24 billion roubles in syndicated lending. The financial institutions may provide funding to cover the project’s budget costs, including expenses associated with purchasing property and equipment and paying for construction and installation.
Sergey Evdokimov, Senior Vice-President, VEB.RF: “We believe the Factory serves as a catalyst for progress in the Russian syndicated lending and project financing markets. Potential investors and lenders are increasingly interested in this mechanism. As the Factory’s operator, VEB.RF not only selects investment projects for inclusion in the programme and is a syndicate member, but also acts as the syndicate agent at all times. If necessary, VEB.RF can provide syndicate tranches intended to pay interest to other syndicate members at the project’s investment stage and establish reserve tranches in case the project’s budget is overrun.”
Olga Kharlamova, Vice President, Director of Key Client Lending, Sberbank: “Sberbank views participation in financing the country’s major mineral production projects as the basis for new export opportunities and Russia’s strengthened role in global economic ties. The Korbalikhinskoye deposit has the potential of large ore deposits that can significantly affect the export of zinc, copper, lead, gold and silver. I’m sure that the project involving Russia’s two largest development institutions will enable UMMC to use cutting-edge technology, thus making the Korbalikhinskoye deposit project not only one of the largest but also one of the most technologically advanced initiatives in the mining industry.”
Andrey Kozitsyn, CEO, UMMC: “Signing this document is a landmark in the history of our company. The Korbalikhinskoye deposit contains one of Russia’s richest zinc mines. Its commercial reserves are estimated at 2.3 million tonnes of zinc. Such a large project will allow UMMC to retain and strengthen its leading position in the non-ferrous industry. We appreciate the fact that VEB.RF, Russia’s major development institution, is interested in our investment project alongside one of our biggest lenders.”
Located in the Zmeinogorsk District, Altai Territory, the Korbalikhinskoye deposit will make it possible to operate Russia’s largest underground polymetallic mine. The reserves of the deposit are 24 million tonnes of ores rich in zinc, copper, lead, gold and silver.
VEB.RF is Russia’s major national development institution. The primary objective of VEB.RF is to contribute to accomplishing the national priority tasks set by Vladimir Putin in the May presidential decrees of. In partnership with commercial banks, VEB.RF provides financing for large-scale projects to develop the country’s infrastructure, industrial production and social sphere, strengthen its technological potential and improve the quality of life. VEB.RF also coordinates the activities of sector-oriented development institutions: Russian Export Center, Russian Small and Medium Business Corporation, Far East Development Fund, MONOTOWNS.RF, DOM.RF.
Sberbank is Russia’s largest bank and a leading global financial institution. Sberbank holds almost one third of aggregate Russian banking sector assets, it is the key lender to the national economy and the biggest deposit taker in Russia. The Central Bank of the Russian Federation is the founder and principal shareholder of Sberbank, owning 50% of the Bank’s authorised capital plus one voting share, with the remaining 50% held by domestic and international investors. Sberbank has customers in 18 countries. The Bank has the largest distribution network in Russia with about 14,000 branches. Its international operations include the United Kingdom, the United States, the CIS, Central and Eastern Europe, India, China and other countries.
Ural Mining and Metallurgical Company (UMMC) is Russia’s largest producer of copper, zinc, coal, gold and silver, consisting of more than 40 industrial companies based in Russia and other countries.