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