- New petrochemical businesses will allow Russia to increase its global market share
- Projects create a new quality of life in cities
VEB.RF Chairman Igor Shuvalov took part in a meeting chaired by the Russian President to discuss the development of the petrochemical industry.
According to Vladimir Putin, the petrochemical industry is showing a good rate of growth. Russian producers are able not only to meet the domestic demand for high-quality products, but also to gain a stronger position in the global market. This is a very promising area: world demand is expected to grow by 4% every year.
“This requires that the industry should implement large-scale projects with investments totalling about 5 trillion roubles. The two largest of them — Amur Gas Processing Plant and the ethane-containing gas processing project near the seaport of Ust-Luga in the Leningrad Region—are already under way with the support of VEB.RF,” Vladimir Putin said.
Overall, Russia is to launch 14 projects in the coming years. The projects will create about 17,000 highly skilled and well-paid jobs. According to Vladimir Putin, an important element in project implementation is to raise loans.
Igor Shuvalov emphasised that it was important for VEB.RF not only to provide funding for new production, but also to work towards the goal set out in the presidential decree, namely qualitative changes to the lives of Russians. “The most important thing is that SIBUR has a very important competency: they can invest in a modern way. Where they come, there is a new quality of life in cities. Tobolsk is a shining example,” Igor Shuvalov said. Such approaches are also considered for the cities of Svobodny (where nearly 50,000 people can receive a new quality of life) and Kingisepp. “As for financial resources, we know how to work without competing against commercial banks. Instead, we give them a helping hand to make loans on acceptable terms,” he said.
VEB.RF-supported petrochemical projects (completed and ongoing) total 5.5 trillion roubles, with VEB.RF’s commitment of 1 trillion roubles.
As a strategic partner of SIBUR, VEB.RF provided financing for the creation of a Tobolsk-based advanced hydrocarbon processing facility, one of the largest in the world. The VEB.RF Group is involved in large-scale projects at Ust-Luga (Russia’s largest ethane-containing gas processing facility), in the Amur Region (Amur Gas Processing Plant), in the Tula Region (Shchekinoazot) and in the Primorie Territory (Nakhodka Fertilizer Plant).
VEB.RF is also considering partnering up with Russian commercial banks to provide financing for another project that is a landmark in SIBUR’s gas-to-chemicals operations, namely the Amur polymer production facility.
Prime Minister Mikhail Mishustin Praises VEB.RF’s Efforts to Promote National Currencies Used Across SCO
During a meeting of the Council of Heads of Government (Prime Ministers) of the Shanghai Cooperation Organisation, Russian Prime Minister Mikhail Mishustin noted the importance of “developing alternative payment methods, independent of the dollar”. “We believe it’s a good idea to expand the use of mutual payments in national currencies,” he said. “It is necessary to reach agreement on this issue and then start negotiating the creation of financial mechanisms for SCO projects.” As a reminder, VEB.RF’s year-long presidency of the Interbank Consortium of the Shanghai Cooperation Organisation (SCO IBC) resulted in the SCO IBC Council giving its approval to the Joint Approaches to the wider use of national currencies.
Speaking to the Council of Heads of Government (Prime Ministers), VEB.RF Chairman Igor Shuvalov said that the document approved by the SCO IBC “includes approaches such as providing mutual access to liquidity in national currencies, developing hedging instruments for currency risks, developing the capital markets of the SCO countries, facilitating the wider use of national currencies in foreign trade”. According to him, the document will help the SCO member states to set up a more resilient system of trade, economic and investment ties.
Another important outcome of VEB.RF’s presidency was the Road Map adopted to cope with the repercussions of the pandemic. “Its implementation will help to create new growth points, give impetus to trade and investment. We intend to share our experience of support for companies. Our plans include creating a base of potential joint projects, developing mechanisms for long-term lending to infrastructure, and promoting green financing,” he said.
Igor Shuvalov also spoke in favour of expanding the SCO integration processes and exchanging best practices between the Shanghai Cooperation Organisation and the Eurasian Economic Union. “In the context of rebooting the post-pandemic economy, businesses in our countries could be more actively involved with integration projects across Eurasia,” he said. “I think these formats have enormous potential for complementing each other. The development banks can become a bridge to transfer best practices of integration projects.” Igor Shuvalov said that he was confident that this would help the SCO member states to adopt “a more transparent, inclusive, green and sustainable model of development”.