During the First Eurasian Congress in Moscow, Baiterek Holding and State Development Corporation VEB.RF signed an investment cooperation agreement today. The document was signed by the institutions’ chief executives Aidar Arifkhanov and Igor Shuvalov.
According to Aidar Arifkhanov, Baiterek is a reliable partner for investors in Kazakhstan’s economy, who can succeed only if there is a favourable, transparent market environment. Therefore, Baiterek gives a strong focus to mutually beneficial relations with international financial institutions, banks, investment funds and international companies.
“We are currently successful in promoting syndicated lending in Kazakhstan. This is where lending to projects involves several lenders, with each of them having a specific commitment and separate obligations, and with decisions approved by a majority vote or by all lenders. VEB.RF is known to have extensive experience in this area. Our Russian partners share their experience in arranging syndicated loans, the particularities of the Project Financing Factory mechanism. The signed document defines comprehensive and efficient measures to fulfil the potential of financial and economic cooperation, covering almost all areas of our activities,” Aidar Arifkhanov emphasised.
Igor Shuvalov said that cooperation with Baiterek would bring added impetus to the interstate dialogue between Russia and Kazakhstan.
“We are ready to negotiate participation in investment projects, including support for industrial exports, PPP projects to build infrastructure facilities, exchange best practices and experience in venture capital financing, cooperate in trade and export financing, contribute to traineeships to transfer and gain each other’s best practices,” he said.
To date, Kazakhstan companies have received through VEB.RF’s special leasing platform over 5,200 units of railway equipment worth more than 11.3 billion roubles as well as other equipment worth 0.75 billion roubles. There are another three projects in the pipeline: rehabilitation of thermal power and cogeneration stations, supply of goods wagons. VEB.RF’s potential commitment is about 20 billion roubles.
In addition, during the First Eurasian Congress today, Baiterek’s subsidiary Development Bank of Kazakhstan (DBK) signed two strategically important documents: a loan agreement with the Eurasian Development Bank (EDB) for a credit line of 5.7 billion roubles for the DBK, and a memorandum of cooperation with VEB.RF, the EDB and the Development Bank of the Republic of Belarus (DBRB).
“I would like to note that the document signed with the EDB will make it possible to start cooperation in a new area, namely transactions in Russian roubles to finance projects in the high-priority lending areas of the Development Bank of Kazakhstan. As for our cooperation with the DBK and VEB.RF, it didn’t begin today, and we are actively and effectively working together within the SCO IBC and are open to new opportunities for cooperation with the Development Bank of the Republic of Belarus under the signed document, which will allow the parties to jointly consider financing investment projects implemented where the parties have a presence and contributing towards the integration among the EAEU countries,” said Abay Sarkulov, Chairman of the Management Board, Development Bank of Kazakhstan.
As a reminder, the First Eurasian Congress is held by the Eurasian Development Bank and hosted by World Trade Center Moscow. The congress aims to find and discuss practical solutions for Eurasian economic integration. The congress is to include several panel discussions about various aspects of Eurasian economic integration. “Cross-cutting” integration projects were the main topic of the joint section of the EDB and VEB.RF. The heads of major companies and national development banks took part in the discussion.
Luxembourg Stock Exchange CEO Robert Scharfe Speaking About VEB.RF’s Efforts to Promote Green Financing: ‘Everything You Do Is Done Right’
With support from the Moscow Exchange, VEB.RF organised a digital conference on the present and future of green financing in Russia. The event discussed VEB.RF’s efforts to promote green financing and included speeches by VEB.RF Deputy Chairmen Aleksey Miroshnichenko and Yuriy Korsun, Moscow Exchange CEO Yury Denisov, and Luxembourg Stock Exchange CEO Robert Scharfe.
“I’m really impressed with your work,” Robert Scharfe said. “Everything you do is done right and you discuss the right things. Transparency, standardisation, taxonomy, these are what is important to create such a system.” As a reminder, the Luxembourg Stock Exchange lists 50% of the world’s sustainable (including green) debt instruments and is well ahead of its counterparts. According to Robert Scharfe, this market totalled 1 trillion US dollars in 2019.
Jean-Claude Knebeler, Head of Sustainable Development at the International and Comparative Law Research Center, noted that the fight to save our planet was global in nature. He said that promoting green financing in Russia enables investors, both Russian and international, to achieve positive outcomes for the natural environment not only in Russia but also globally. He also said that while living in Russia, he noticed that the government and the corporate sector had begun to pay much more attention to sustainable development in recent years, adding that VEB.RF’s efforts to create a green finance system in Russia were very important to channel capital into green projects.
According to Aleksey Miroshnichenko, responsible for green financing at VEB.RF, the Russian green finance system based on VEB.RF’s methodology is to be fully functional in mid-2021. In November 2020, the Government mandated that VEB.RF should act as the methodological centre for green financing and develop a methodology and taxonomy for green projects. These documents will be issued before the end of January 2021. VEB.RF released the first version of the taxonomy and recommended guidelines as early as July 2020 and invited all interested parties to send their comments about them. A total of about 600 comments came from different market participants. The received comments will be taken into account in the future versions of the methodologies, which will be submitted for review by the inter-agency working group.
VEB.RF Deputy Chairman Yuriy Korsun spoke about green projects interesting to VEB.RF. These are primarily projects related to green transport (rail transport, electric and gas-fuelled vehicles), waste disposal (Moscow Region waste-to-energy projects currently financed by VEB.RF), water purification, solar panels, hydropower, energy-efficient buildings etc. In addition, based on VEB.RF’s methodology, a pilot issue of Russian Railways perpetual bonds totalling 100 billion roubles was verified by Expert RA in September and certified by VEB.RF as compliant with the VEB.RF Guidelines.
VEB.RF Vice-President Dmitry Aksakov, who moderated the conference, noted that according to VEB.RF’s most conservative estimates, Russian companies would be able to raise 300 billion roubles from green investors in the next two or three years to modernise existing and create new production facilities.
Moscow Exchange CEO Yury Denisov spoke about the Russian exchange’s achievements in promoting green financing in Russia. “The Moscow Exchange tries to set an example for the market and consistently introduce sustainable practices,” he said. “We are working to make sure sustainability is integrated into strategic planning as well as our corporate governance and risk management.” According to Yury Denisov, the Moscow Exchange became a partner of the UN-supported Sustainable Stock Exchanges initiative in 2019 and a member of the Sustainability Working Group of the World Federation of Exchanges. “The Moscow Exchange intends to work with the government, VEB.RF and other interested parties to expand ESG integration and efforts to promote responsible investing in Russia,” he said in conclusion.