VEB.RF and En+ Group Sign Strategic Partnership Memorandum on Baikalsk Development
VEB.RF and En+ Group have entered into a memorandum of strategic partnership to promote socio-economic development in the town of Baikalsk, including the former production site of Baikalsk Pulp and Paper Mill.
The document was signed on behalf of VEB.RF by its Senior Vice-President Anton Grigorov and on behalf of En+ Group by its Director for Sustainable Development Anton Butmanov.
Specifically, the memorandum outlines plans to implement a large-scale joint project to build the International Centre for Water Resources using the Baikalsk mill’s facilities. The project aims to create a multifunctional cluster of industrial, research, tourism and educational facilities.
The centre will promote socio-economic development in Baikalsk, with the project creating new job opportunities, introducing modern technology and consequently increasing budget revenues. VEB.RF and En+ Group agreed to join forces with regional and local authorities in this area.
The International Centre for Water Resources is to be built under the Baikalsk comprehensive development strategy that is currently formulated as a strategic master plan by VEB.RF’s subsidiary Baikal Region Development Center (BAIKAL.CENTER).
This will enable En+ Group to be effectively involved in preparing and carrying out the Baikalsk master plan, especially as related to the most important issues of local socio-economic development.
The memorandum also contains several important arrangements that lift the remaining restrictions and allow the infrastructure of the now-defunct mill to be used for the development of Baikalsk on a full scale. For instance, VEB.RF reaffirmed its intention to acquire the assets of Baikalsk Pulp and Paper Mill as a single lot.
Anton Grigorov, Senior Vice-President, VEB.RF:
“The memorandum is a typical example of how VEB.RF has always worked to provide a comprehensive development strategy for Baikalsk and the defunct Baikalsk mill, firmly committed to transparency, stakeholder engagement and respect for stakeholders. En+ Group is definitely the largest industry player in the region and has done a lot for Baikalsk. In this connection, combining forces with each other and working together as agreed in the memorandum, En+ Group and VEB.RF will be able to implement the most important projects to encourage socio-economic development in the Baikal region in the next several decades.”
Mikhail Khardikov, Head of Energy Business, En+ Group:
“En+ supports the government’s efforts to protect the environment and promote socio-economic development in the municipality of Baikalsk and the Baikal region. The company finds its involvement in such a large investment project to be very important to conserve and protect the natural environment. We hope its successful implementation will make the region attractive to tourists, researchers and active young people and will also encourage job creation and the development of the region as a whole.”
Igor Shuvalov Put in Charge of Skolkovo Foundation’s Board of Directors
The Board of Directors of the Skolkovo Foundation resolved on 29 December 2020 to elect VEB.RF Chairman Igor Shuvalov as its chairman.
Changes were made to the Skolkovo Foundation’s management due to the Skolkovo Foundation coming under the control of VEB.RF as part of the Russian Government’s reform of the system of development institutions.
A centralised investment unit is to be set up under the umbrella of VEB.RF to implement projects contributing towards the national development goals. The VEB.RF Group’s priorities now include consolidating public and private investment resources to achieve a breakthrough in the country’s development, improve quality of life and ensure adequate living conditions for people.
Deliver, a B2B online marketplace for shipping services, has received 500 million roubles from VEB Ventures, a subsidiary of VEB.RF. Financing is intended to scale up and geographically expand the use of the IT product and launch new services for customers and shippers.
Deliver enables large consignors to substantially reduce their shipping costs through access to a great number of privately owned vehicles without detriment to service quality, cargo safety, security, tax compliance or stable pricing. More than 59,000 companies are now connected to Deliver.
The company automated the process of Full Truck Load (FTL) shipping almost completely. For consignors, Deliver is a digital freight forwarder that is solely responsible for cargo delivery, customer service and stable transport costs.
Using its own AI technology, the Deliver marketplace is able to automatically give scores to drivers, monitor their taxation, increase the number of available vehicles at peak times, predict possible delays and deviations and ensure long-lasting fixed rates. Deliver serves major multiformat retailers, food producers and FMCG companies.
The Russian FTL market is fragmented: the ten largest shippers represent only 2% of the market. As estimated by VEB Ventures, the market was worth about 916 billion roubles in 2019 and is projected to grow by an annual average of 7% until 2023. The drivers of growth include the statutory codification and development of e-commerce, which generated 1.72 trillion roubles in Russia in 2019 and is expected to rise by 44% in 2020.
“VEB Ventures has joined the shareholders of Deliver, leading Russian and international investors, namely the Russian Direct Investment Fund (RDIF) and its Middle East partners, such as Mubadala, along with A&NN Investments, InVenture Partners and Amereus Group. Support from the existing co-owners, their experience and resources, as well as the VEB.RF Group’s capabilities, will allow Deliver to attain sustained and long-lasting industry leadership,” VEB Ventures CEO Oleg Teplov said.
“We are delighted to welcome VEB Ventures to Deliver. The confidence of such a strong player proves once again that the company is heading in the right direction. I’m sure together we can make Deliver not only the undisputed leader in digital technology development, but also the biggest company in the entire logistics industry,” Deliver founder and CEO Danil Rudakov emphasised.
VEB.RF-Supported Central Ring Road Project Phase 4 Begins Operation
An official ceremony took place to mark the opening of regular traffic via CRR-4 (Phase 4 of the Moscow Region’s Central Ring Road), a project completed with the VEB.RF Group’s involvement.
“The development of highway infrastructure is a key area of VEB.RF’s investment. We are pleased that CRR-4 traffic was opened 10 months ahead of schedule. The Central Ring Road and, specifically, the CRR-4 project will relieve the Moscow transport hub of transit freight traffic. In addition, the project will improve transport accessibility in neighbouring agglomerations in the Moscow Region (due to substantially reduced travel time), which is extremely important for people. As a development institution, VEB.RF helped the project to raise subordinated debt capital and became a member of the syndicate of senior lenders, while InfraVEB acquired a stake in the concessionaire and provided equity financing,” VEB.RF Vice-President Vera Aleksandrova said.
CRR-4 promotes cross-border transport through the Western Europe-Western China transport corridor. Connecting the M-7 Volga federal highway to M-4 Don, the 96.5-kilometre road runs in the south-east of the Moscow Region, 50 kilometres from the Moscow Ring Road.
The total project value exceeds 100 billion roubles. Private funding for the project consists of 4.1 billion roubles in subordinated debt for 20 years (junior tranches) and a syndicated loan provided by senior lenders, namely VEB.RF, Gazprombank, Sberbank and the Eurasian Development Bank (EDB), for a total of 35.8 billion roubles for 17 years.
VEB.RF, SberCIB and Ural Mining and Metallurgical Company (UMMC) have signed a syndicated loan agreement to finance the development project for the Korbalikhinskoye polymetallic deposit and rehabilitate the Rubtsovsk concentrator with the aim of increasing its annual capacity to 1.5 million tonnes of ore. The agreement is a continuation of the term sheet signed in early 2020.
The total value of the Korbalikhinskoye project is estimated at 38 billion roubles, including 15.8 billion roubles in syndicated lending through the Project Financing Factory and a further 1.8 billion roubles as a reserve tranche. The lenders provide financing to cover the project’s budget costs, including expenses associated with purchasing equipment and paying for design, construction and installation.
“[The company] is the largest polymetallic ore producer in the region. As the Project Financing Factory’s operator, VEB.RF not only selects investment projects for inclusion in the programme, but also acts as a syndicate member and the syndicate agent. We are definitely optimistic about the sales potential of the project’s product (zinc concentrate) in both the Russian and global markets. Moreover, the project will enable the company to substitute its own sources of feedstock for outside suppliers, including foreign counterparties. Social aspects are fundamentally important to us too, such as the creation of highly qualified jobs,” VEB.RF Deputy Chairman Yuriy Korsun said.
The Korbalikhinskoye project is intended to supply the UMMC Zinc Division with internally sourced feedstock for a long time. Work will also be done on rehabilitating the Rubtsovsk concentrator to step up ore processing.
“We are pleased to participate in financing the development of the country’s largest polymetallic deposit, which will help Russia to continue to be a leader in the non-ferrous metals market, as well as creating new jobs and promoting innovative technology in the mining industry. SberCIB agreed to lend 13.7 billion roubles to UMMC for eight years at a floating interest rate pegged to the Bank of Russia key rate. With the involvement of VEB.RF’s Project Financing Factory, this will allow the customer to have the most favourable terms of financing,” Olga Kharlamova, Vice President, Director of Key Client Lending, Sberbank said.
Located in the Zmeinogorsk District, Altai Territory, the Korbalikhinskoye polymetallic deposit is currently Russia’s largest zinc mine. Its reserves are about 24 million tonnes of ores rich in zinc, copper, lead, gold and silver.
“UMMC views the agreement as a pilot transaction through the Project Financing Factory to see if we can extend this experience to other investment projects, including on a larger scale. I would like to thank the banks for their participation in such a project, long but unique for UMMC. The project financing structure not only enables the syndicate members to use reasonable and borrower-friendly project supervision mechanisms, but also provides very interesting tools to reduce UMMC’s risks. In addition to involving a designated technical consultant, the project includes implementing a comprehensive risk insurance programme and using risk hedging instruments for a deterioration in financial markets,” Andrey Kozitsyn, CEO, UMMC said.
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.