VEB.RF to Provide Financing for BelAZ Trucks Supplied to Uzbekistan

7 december 2020 года
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  • Financing totalling 59 million US dollars
  • First integration deal for the benefit of companies in three countries

VEB.RF is to provide Almalyk MMC with financing to pay for BelAZ haul trucks to be used for the modernisation of the company’s mining and smelting facilities in Uzbekistan.

Financing is estimated at 59 million US dollars for a term of five years. Russia’s content of the cost of supplied products should be over 30%. This is a prerequisite for VEB.RF’s involvement in project financing.

“This is the first transaction in a new format of cooperation between Russia and Belarus. The haul trucks will go to one of the largest producers of copper, gold and silver in Central Asia. VEB.RF provides the buyer with a long-term loan, and its interest rate will be subsidised by the Belarusian Government. The project was made possible by effective cooperation between the governments of the two countries and financial institutions. Our mutually beneficial partnership not only contributes to closer trade ties between the countries, but also provides support for our businesses by increasing their utilisation rates,” VEB.RF Deputy Chairman Daniil Algulyan said.

Bank BelVEB (part of the VEB.RF Group) acts as the agent for the Belarusian Government to subsidise VEB.RF’s interest rate. The Belarusian Government and VEB.RF operate under an agreement for financial support for products resulting from industrial cooperation between Belarusian and Russian manufacturers and exported to third countries.

VEB.RF and Bank BelVEB have provided financing for several years to pay for Russian high-technology equipment, feedstock and materials supplied to BelAZ for the manufacture of haul trucks.

“This project lets us show the successful start of cooperation to support the export of Russo-Belarusian products to third countries in a new format. The project is a logical continuation of long-lasting cooperation between the banks in financing and proves that the governments have a wide range of mechanisms to support the promotion of jointly made products,” Bank BelVEB’s Chairman of the Board Vasily Matyushevsky said. “We can see the growing demand for our export support services intend in the near time to carry out similar projects for other Belarusian companies.”

“We are glad our cooperation with VEB.RF and Bank BelVEB allowed us to complete such a large project, which will help to scale up mining and smelting operations in Uzbekistan and will promote cooperation among our countries,” said Anatoly Trambitsky, Acting Deputy General Director for Marketing and Export Policy and Marketing Centre Director, BelAZ. “The first shipments of 200-tonne haul trucks took place in October and November 2020.”

VEB.RF approved a five-year credit line for 1.8 billion roubles in November 2020, allowing Almalyk MMC to pay for Russian high-technology equipment to be used for the company’s modernisation.

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Maxim Reshetnikov Presides at Inaugural Meeting of Investment Committee of VEB.RF’s Supervisory Board

7 december 2020 года
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The Investment Committee of VEB.RF’s Supervisory Board held the first meeting chaired by Maxim Reshetnikov, Russian Minister of Economic Development.

The Investment Committee approved VEB.RF bylaws speeding up decision-making related to VEB.RF property transactions, reviewed strategies to deal with VEB.RF assets and considered new limits on financing for existing investment projects.

The committee recommended that these issues should be further submitted to VEB.RF’s Supervisory Board.

Additionally, the Investment Committee took note of information concerning VEB.RF’s ongoing and potential gas-to-chemicals and chemical projects and information about the impact of these projects on attaining the national goals of Russia’s development until 2030. It was also reported on the current status of examining VEB.RF’s involvement in financing the investment project to build and operate a Kingisepp-based ammonia and carbamide production facility (EuroChem Northwest-2, a special purpose entity of the Project Financing Factory).

The Investment Committee of VEB.RF’s Supervisory Board was formed in 2020 following amendments to Federal Law No. 82-FZ on State Development Corporation VEB.RF. The enacted law was the first step towards the reform of the development institutions.

“The Investment Committee considers issues on VEB.RF’s broad agenda: investment, foreign trade, export support and projects of national importance. Each project under review has great significance to the country’s economy and higher standards of living,” VEB.RF Chairman Igor Shuvalov said.

“Due to the reform of the development institutions, the VEB.RF Investment Committee will take decisions on key investment projects. Our task is to align them with the national development goals outlined by the President. It’s necessary to focus on increasing the share of private capital in projects,” Russian Economic Development Minister Maxim Reshetnikov said.

As instructed by the Government, the Ministry of Economic Development is working with the Ministry of Finance, VEB.RF and other agencies and departments on road maps for reforming the development institutions.

Following the reform, the development institutions will use KPIs that will make it possible to monitor their performance in real time. The Ministry of Economic Development is forming a working group chaired by Deputy Minister Ilya Torosov to release the KPIs.

As a reminder, Mikhail Mishustin announced the reform of the development institutions on 23 November. The activities of the reorganised institutions are to be consistent with the national development goals set by the President and with national projects.

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Coalition Formed by VEB.RF, EDB and EAEU Development Banks

4 december 2020 года
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Igor Shuvalov, Chairman, VEB.RF; Nikolay Podguzov, Chairman of the Management Board, Eurasian Development Bank (EDB); Andrey Zhishkevich, Chairman of the Management Board, Development Bank of the Republic of Belarus (DBRB); and Abay Sarkulov, Chairman of the Management Board, Development Bank of Kazakhstan (DBK) signed a memorandum of cooperation among the development banks of the Eurasian Economic Union (EAEU). The document is intended to stimulate the development banks’ investment, thus strengthening integration processes within the EAEU.

Commenting on the signed document, Igor Shuvalov said: “The new alliance will let us take a fresh look at cooperation between development institutions and commercial banks. We intend to seek funding for major projects that will bring not only profits to project initiators and investors, but also a new quality of life to both businesses and people in our countries.”

“The signed memorandum is not only a continuation of successful cooperation with each party, but also a new stage of relationships between the key financial institutions of our countries, aiming to contribute to the development and integration of the EAEU countries,” said Nikolay Podguzov, Chairman of the Management Board, Eurasian Development Bank.

The document was signed during the session on achieving a new quality of life through the cross-cutting integration projects, which was the main discussion during the First Eurasian Congress. The session was moderated by Igor Shuvalov. It started with the opening remarks by Russian Prime Minister Mikhail Mishustin, who stressed the importance of the digital transformation in the Eurasian space. “We need to quickly switch our economies to a new technological level, enabling all sectors to go digital,” he said. “The four freedoms of the Eurasian Economic Union (the flow of goods, services, capital and labour) should be supplemented with a fifth freedom, the flow of information.”

Igor Shuvalov thanked the prime minister for the remarks and told the participants that the Customs Union, which became the basis of the EAEU, had reached the age of ten years in 2020. “All surviving exemptions from the EAEU single market should be removed by 2025,” he said. “The markets will be fully open even in sensitive areas such as finance, oil, gas and energy.”

VEB.RF carries out integration projects in the EAEU member countries with a commitment in the amount of roubles equivalent to almost 70 billion. The projects include the export of Russian industrial products, such as rail transport supplied to Kazakhstan, underground carriages, cranes, railway equipment, metal products and chemical products supplied to Belarus, and financing for the construction of the Belarusian nuclear power plant.

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VEB.RF и Baiterek Agree on Investment Cooperation

4 december 2020 года
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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.

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Luxembourg Stock Exchange CEO Robert Scharfe Speaking About VEB.RF’s Efforts to Promote Green Financing: ‘Everything You Do Is Done Right’

2 december 2020 года
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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.

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