VEB.RF in Partnership with Sber and Otkritie Bank to Provide Financing for Russia’s First Green Steel Mill

20 april 2021 года
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  • A syndicate of commercial banks and VEB.RF will provide financing for the Ecolant megaproject in the single-industry town of Vyksa, Nizhni Novgorod Region
  • Central Russia will have a large gas and iron ore consumer designed for high value-added production
  • The project will create over 700 permanent jobs and an additional 2,000 for the period of construction
  • Ecolant is compliant with current and potential international environmental standards and consistent with the agenda for reducing the carbon footprint

VEB.RF, Sber and Otkritie Bank are to provide financing for a project to build Europe’s first large integrated steel mill compliant with environmental standards. The financing agreements were signed by Igor Shuvalov, Chairman, VEB.RF; Alexander Vedyakhin, First Deputy Chairman of the Executive Board, Sberbank; Mikhail Zadornov, President & Chairman of the Management Board, Otkritie Bank; and Ecolant owner Anatoly Sedykh. The signing ceremony took place on 20 April 2021 in Vyksa, Nizhni Novgorod Region, where the project will be built. The project initiator is Ecolant LLC. The project includes the construction of an electrometallurgical facility and the necessary infrastructure with modern technology for the manufacture of steel, bars and high-quality slabs.

The total project value exceeds 140 billion roubles. VEB.RF, Sberbank and Otkritie Bank formed a syndicate to finance the project. The project will receive financing under the Project Financing Factory programme. VEB.RF’s share in the syndicated loan is 20 billion roubles, plus a reserve tranche of 20 billion roubles. Each of the other two syndicate members is to lend an additional 40 billion roubles. The project initiator will contribute more than 40 billion roubles.

“This is a project that is consistent with the green economic development agenda. The project will create production facilities that will meet the highest environmental requirements and contribute to reducing the carbon footprint in steel production. The syndicate of VEB.RF and commercial banks will invest through the Project Financing Factory. Together with the partners and the project initiator Ecolant, we’ll lay the foundations for the long-term competitiveness of the company, the single-industry town of Vyksa and the Nizhni Novgorod Region,” Igor Shuvalov said.

“Sber pays great attention to environmental issues and, in general, the ESG-based transformation of companies and industries. We are especially interested in the Ecolant project not only because of its significance for Russian steelmaking, but also because the project involves the use of best available technology such as DRI. Compared with blast furnace technology, it can substantially reduce energy consumption and greenhouse gas emissions,” Alexander Vedyakhin said.

“A sustainable approach to business financing and support for a green economy are now as relevant as ever. As a major steelmaker, the project initiator meets high standards of quality and environmental protection; and we are pleased to expand our cooperation. The lenders and Ecolant worked closely with each other to find an optimal investment solution and structure financing in such a way as to achieve the high credit quality of the ESG-compliant deal,” Mikhail Zadornov said.

“We have vast experience of carrying out large-scale, breakthrough projects. They wouldn’t have been possible without bank lending. Ecolant is our first large investment project solely with Russian funding. Russian banks have become competitive on a global scale. One of the largest investment projects in steelmaking will be an example of how to introduce technology that can give fresh impetus to the steel industry, improve the environment in industrial areas and ensure the further development of the Russian economy,” Anatoly Sedykh said.

Ecolant is a steel mill that does not use coke or blast furnace technology. Steel will be made using direct reduced iron (DRI) from iron ore and natural gas. The project is an integrated ore-to-steel facility including DRI, electric furnace and secondary refining equipment with an annual capacity of 1.8 million tonnes of steel, and two continuous-casting machines. Production is scheduled to start in 2025. Sheet steel will be intended chiefly for the manufacture of large-diameter main pipes and ships, as well as making seamless pipes for oil production and supplying feedstock for Europe’s largest rail wheel production at Vyksa Steel Works, part of United Metallurgical Company (OMK).

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VEB.RF Guarantees RUB100bn in Surety Bonds for 3% Loans

20 april 2021 года
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State Development Corporation VEB.RF has issued surety bonds to commercial banks for more than 100 billion roubles under a new programme to support businesses. VEB.RF’s total limit under the programme is 131 billion roubles.

What is the purpose?

The Russian Government launched a new low-interest lending programme to provide businesses with 3% loans, with VEB.RF issuing surety bonds to commercial banks.

“VEB.RF has already issued surety bonds for low-interest loans to as many as 17 banks, including regional credit institutions. Our surety bonds will secure the performance of the borrowers’ debt obligations and guarantee that up to 75% will be repaid in principal and interest,” said Daniil Algulyan, Deputy Chairman, VEB.RF.

VEB.RF has already been involved with similar programmes. Since the beginning of the pandemic, VEB.RF has issued surety bonds totalling 500 billion roubles to 40 banks under the first two rescue schemes for ailing businesses.

What are the results?

The start date for loan applications under the new programme was 9 March 2021. The banks now have over 9,000 loan agreements totalling 27.3 billion roubles. Loans are accessible to micro, small, and large businesses working in tourism, sport, entertainment, leisure and hospitality. The loan amount depends on the number of employees. The ceiling is 500 million roubles for 12 months.

How long will the programme last?

Applications can be submitted from 9 March to 1 July.

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VEB.RF’s Supervisory Board Considers Approaches for Group’s Strategy and Several High-Priority Projects

16 april 2021 года
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Dmitry Grigorenko, Deputy Prime Minister and Chief of Staff of the Government Executive Office of the Russian Federation, presided at a meeting of VEB.RF’s Supervisory Board.

As specified in the road map for reforming the development institutions, VEB.RF is to submit the Group’s updated strategy by 1 July. In this connection, the Supervisory Board considered and approved the main areas of VEB.RF’s activities to be included in the new strategy.

The Supervisory Board decided that VEB.RF’s priorities would include maximising the Group’s contribution to attaining national development goals. Therefore, VEB.RF should act as an integrator of priority projects and set up a customer-centric business support system offering standardised products and services and making it possible to ensure the scalability of integrated development programmes and remove the risks of economic cycles or complex project stages.

Dmitry Grigorenko, Deputy Prime Minister and Chief of Staff of the Government Executive Office of the Russian Federation, Chairman of VEB.RF’s Supervisory Board, said during the meeting:

“The Supervisory Board discussed the main areas of the VEB.RF Group’s new strategy. The development institutions’ priority is now the consolidation of public and private investment resources to achieve a breakthrough in the country’s development and to ensure adequate living conditions and improve quality of life for people. The Government’s frontline strategy includes considerable investments in the country’s economy, and VEB.RF is becoming a tool for obtaining these investments. The VEB.RF Group is a key partner of the Government and business, providing comprehensive support for the priority areas of economic development.

“In addition to its current activities, VEB.RF was given four new strategic areas. These are investments in major projects within the Government’s frontline strategies. Support for projects to improve competitiveness, export-oriented projects and projects aimed at creating super-industries for a technological breakthrough. Third, projects of regional significance, including public-private partnership projects. VEB.RF is becoming a driver of tomorrow’s infrastructural projects aimed at developing urban agglomerations.”

Igor Shuvalov, Chairman, VEB.RF, said:

“The Supervisory Board discussed what VEB.RF should be like after the development institutions have been reformed. VEB.RF is ready to take on more ambitious tasks and participate actively in the implementation of the Government’s frontline strategies.

“VEB.RF’s new business model will allow us, if we have adequate capital and liquidity, to implement investment projects for 10 trillion roubles by the end of 2025.”

Additionally, the Supervisory Board considered several issues related to obtaining additional liquidity to finance VEB.RF investment projects as well as corporate issues.

The Supervisory Board also discussed the possibility of carrying out a pilot project to modernise the Taganrog tram system. The concession project involves the replacement of 45 kilometres of tracks and 60 electric trams. The project will make it possible to provide high-quality and full public transport services and attract new tourists to Taganrog. In addition, the project can become Russia’s first concession covering the entire tram system of a city.

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WorldSkills Student Competition Winners Invited to SKOLKOVO

14 april 2021 года
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The winners of the WorldSkills student competition in the category “Urban Studies: Town Planning” were able to attend lectures under the training programme of VEB.RF and Moscow School of Management SKOLKOVO for management teams in the 100 largest Russian cities. Students at Kosygin Russian State University (RSU) were provided with this opportunity following the vocational skills competition that was hosted by the university in late March. Russia’s first category was organised by the Housing and Utilities Reform Fund with support from VEB.RF.

The WorldSkills competition took place at RSU in late March. It was not easy for students of the Environmental Design Department to win: they had only three days to prepare their projects. Their competition task was to develop a project for the integrated development of the forest park in the Mikrogorod housing estate, which is managed by New Urban Projects (part of the VEB.RF Group).

The competition winners were invited to attend lectures at SKOLKOVO about the development of creative industries together with management teams from the 100 largest Russian cities. The programme is intended for city managers and their key assistants. This is a unique programme as it focuses on practical matters and uses a comprehensive approach.

“It’s great we were able to hear how some problem or other will be resolved in the development of creative industries in the future. We’ve learnt a lot of interesting things, and it will definitely come in handy in our work,” RSU student Maria Bystritskaya said.

The speakers were Russian and foreign experts: Matthias Rauch, Cultural Innovation Officer and Head of the Cultural Urban Development Department, Mannheim, Germany; Denis Shchukin, Director, Creative Practices Foundation; Polina Kuzavlyova, Head of the Department of Special Projects, Studies and Consulting, Universal University; Dmitry Tyutkov, Co-founder and Creative Director, TUTKOVBUDKOV; Mark Zavadskiy, CEO, Riki Group. The students were shown Moscow School of Management SKOLKOVO and its campus.

“The students got a unique opportunity to immerse themselves in a professional environment and learn more about the development of creative industries. The lectures and the tour of our campus were very inspiring for them, and I’m sure this will give powerful impetus to their further development in the area of urban studies. Thank you for this opportunity,” said Tatiana Kulikova, Deputy Director, Institute of Design, Kosygin Russian State University.


For information: VEB.RF launched the training programme for the 100 largest Russian cities last summer. The programme consists of 14 modules in five categories. Built on the Master of Public Administration (MPA) standard, the programme was prepared by VEB.RF and Moscow School of Management SKOLKOVO in partnership with Strelka Institute for Media, Architecture, and Design; the Higher School of Economics; and the New Economic School.

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VEB.RF, Interros and Vasta Discovery Agree to Create New Mountain Resort in Sochi

8 april 2021 года
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  • Total investment in the project is estimated at 80 billion roubles
  • VEB.RF is considering syndicated lending for the project

VEB.RF, Interros and Vasta Discovery have agreed to cooperate in carrying out the project to create Dolina Vasta, an all-season mountain resort in Sochi.

The agreement was signed by Alexander Tarabrin, Head of Property Project Management and Asset Management and member of the Board, VEB.RF; Sergey Batekhin, CEO, Interros; and Sergey Bachin, CEO, Vasta Discovery.

The agreement is aimed at developing post-Olympic Sochi and regional tourism and building the necessary infrastructure to increase the domestic and inbound tourist flow. Ultimately, this work will contribute to the socio-economic development of the Krasnodar Territory and the city of Sochi as a mountain resort.

It is intended that the Dolina Vasta project in Sochi will build the necessary tourist infrastructure for health and ski recreation in the next four years (2021–2025). A comfortable environment will be created in Sochi National Park for year-round recreational activities, with balneotherapy and ski centres. The balneotherapy centre will include a sanatorium, guest houses and spa hotels, and a hydropathic facility with mineral water pump-rooms. The skiing facilities will consist of 80 kilometres of slopes and several ski lifts with a total length of 13 kilometres.

The project initiators estimate the total investment in Dolina Vasta at 80 billion roubles. The intend to use internal funds and borrowings, and the project’s utility and transport infrastructure will be built using public funding.

The new high-class resort, such as Dolina Vasta, in the mountain cluster of Sochi will create 2,500 jobs (or, including related services, as many as 5,000), stimulate small and medium-sized enterprises, and contribute to the socio-economic and cultural development of the region. The resort will pay billions of roubles in taxes at various levels in the future. The tourist flow is estimated at 1,500,000 guests per year.

VEB.RF is considering its participation in organising and conducting due diligence for the Dolina Vasta project, providing investment and financial advice during its implementation, and arranging a syndicated loan for the project (under the Project Financing Factory programme). Interros acts as an investor to arrange financing for the project. The project is implemented by Vasta Discovery, responsible for preparing design and estimate documents, obtaining ownership, operating the project’s facilities, as well as acting as a co-investor and raising funds.

Alexander Tarabrin, Head of Property Project Management and Asset Management and member of the Board, VEB.RF:

“Domestic tourism is an industry that can make a significant contribution to post-pandemic economic recovery. Projects in this area help to make qualitative changes to the urban environment and create incentives for small and medium-sized enterprises. That is why VEB.RF views the tourism and hospitality industries as one of the most promising areas of investment.”

Sergey Batekhin, CEO, Interros:

“The successful experience of Sochi mountain resorts clearly shows the growing demand among Russians for recreational activities within the country. This became especially true during the pandemic. The new year-round resort Dolina Vasta not only will make such recreation more accessible to Russians, but also will meet the growing demand. As the project’s investor, Interros intends to use its experience of creating the Rosa Khutor resort and will ensure that Dolina Vasta construction will meet highest engineering and environmental standards.”

Sergey Bachin, CEO, Vasta Discovery:

“The Dolina Vasta spa resort will become part of the post-Olympic development of Rosa Khutor and will perfectly complement the existing infrastructure of the Sochi mountain cluster. This will substantially expand the tourism opportunities of the Krasnodar Territory as a whole as the most attractive place for recreation in this country. I’d like to emphasise the construction of the new resort will be based on the corporate Green Code, formulated in accordance with Russian and international standards. Respect for the region’s unique natural environment has always been high on our list of priorities.”

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