VEB.RF Group to Finance the World’s First Cross-Border Passenger Cableway Project in Amur Region
VEB.DV (part of the VEB.RF Group), Agency for Development of Project Initiatives (ADPI, part of the REGION Group) and the Government of the Amur Region agreed to cooperate in implementing a project for the construction of a cableway across the Amur river at the section of the Russian-Chinese border between Blagoveschensk and Heihe. The cooperation agreement was signed today at the St. Petersburg International Economic Forum by VEB.RF Deputy Chairman and Member of the Board Artyom Dovlatov, CEO of ADPI Valeria Repkova and the Governor of the Amur Region Vasily Orlov. The total project value is RUB9.7bn. The project is implemented under the governmental agreement between the Russian Federation and the People’s Republic of China of 3 September 2015.
The cableway will consist of two independent lines having two cabins with passenger capacity of up to 110 people. It will service 1,788 passengers per hour in one direction. The expected passenger traffic in both directions is about 1 million people per year. The cableway length is 976 metres. It is intended that the cableway will begin operation in 2023.
In addition, a four-level passenger terminal with an area of 26,000 square meters will be constructed on the Russian side.
“VEB.DV encourages investment in the Far East providing low-interest loans and long-term financing for various investment projects. The memorandum of cooperation on such an interesting and unique international project for cableway construction is an additional guarantee of stable financing, and that gives us the confidence that the facility will be commissioned in two years. The cableway construction is one of our priority projects. Apart from being a comfortable means of cross-border transportation, the cableway will provide a significant incentive for the development of tourism. Besides, the launch of such unique project will produce a multiplying effect for the capital of the Amur Region,” Governor of the Amur Region Vasily Orlov said.
“Construction of the world’s first cross-border passenger cableway between Blagoveschensk and Heihe will bring added impetus to the development of tourist infrastructure in the Far East, make the region attractive for foreign tourists and lay solid foundations for strengthening Russian-Chinese relations,” VEB.RF Deputy Chairman Artyom Dovlatov said.
“A high-technology international project implemented by ADPI (part of the REGION Group) provides for coordinated work of international teams from Russia, China, France and the Netherlands. The project is the first of a kind, and it definitely will encourage the growth of cross-border agglomeration, create new jobs, facilitate the development of tourism, strengthen economic and social ties, and boost trade turnover in the frontier region,” CEO of ADPI Valeria Repkova said.
VEB.RF Group to Participate in Multipurpose Deep-Water Seaport Construction Project in Sakhalin Region
VEB.DV (part of the VEB.RF Group) and the Sakhalin Region Development Corporation (SRDC) agreed to jointly implement a project for the construction of a multipurpose deep-water seaport in the Sakhalin Region. The agreement was signed today at the St. Petersburg International Economic Forum by VEB.RF Deputy Chairman and Member of the Board Artyom Dovlatov and CEO of the SRDC Andrey Medvedev.
The project is intended to rehabilitate and expand the existing Korsakov Seaport and create a multipurpose deep-water seaport and a hub on its territory.
The project will receive financing under a concession agreement.
“As it is today, the transport facility is obsolete and worn-out, and fails to meet the regional economic challenges. Korsakov, however, has a very advantageous location at the intersection of sea and land trade routes from the European part of Russia to the Asia-Pacific region. As instructed by the government of the Sakhalin Region, we are now involved in the project aimed at radical upgrading of the port. Our task is to ensure safe navigation, cargo handling and tourism in line with global standards. Equally important, the port in the south of Sakhalin will encourage business activity, create new jobs and bring about a considerable rise in tax revenues,” Andrey Medvedev said.
“Implementing the project for the construction of a seaport will help to fulfil strategic tasks of developing maritime transport and create an economically efficient, technically fit and competitive port infrastructure in the Sakhalin Region,” VEB.RF Deputy Chairman Artyom Dovlatov said.
VEB.RF and the Yaroslavl Region agreed to develop the Golden Ring Resort. The cooperation agreement was signed on the sidelines of the St. Petersburg International Economic Forum by CEO of the Resort Yaroslav Voskresensky and Governor of the Yaroslavl Region Dmitry Mironov. The signing ceremony took place in the presence of Igor Shuvalov, VEB.RF Chairman, and Aleksander Kliachin, the founder of Azimut Hotels network being the project operator.
Specifically, the parties agreed to be jointly involved in the construction of a fitness centre on the territory of the resort under the investment programme of the Yaroslavl Region. The total project value will be RUB250mn, with VEB.RF being the major investor. Today VEB.RF is preparing a plan of historic part of Pereslavl-Zalessky. The Head of the Region offered to scale up the process stressing the benefits for the historic city which is an integral and important part of the Russian Golden Ring.
“Signing this investment agreement further fosters strategic cooperation between the Yaroslavl Region and VEB.RF. I would like to express my gratitude to VEB.RF for going ahead with upgrading the tourism and recreation centre which is becoming a local landmark of Pereslavl-Zalessky. This will allow us to take tourist proposals to a qualitatively new level. VEB development institutions actively support the development of recreation zones and tourist attractions in the Yaroslavl Region,” said the Governor of the Yaroslavl Region Dmitry Mironov.
“One of strategic and important priority tasks of VEB.RF as a national development institution is developing the domestic tourism market. We understand that the Golden Ring is comparable to other tourist locations in the world both in terms of sightliness and historic value. However, the resort needs upgrading to enhance the comfort level and stimulate the tourist interest based on the highest performance criteria ensuring convenient modern services and a high security level,” Alexander Tarabrin said.
“Developing the Golden Ring Resort, creating new urban spaces and infrastructure are our absolute priorities. We are currently preparing a master plan to develop the hotel’s territory including new services, and recreation and entertainment zones for tourists and guests. The hotel’s territory and facilities allow us to hold various high-level events. The hotel’s development will create new jobs for the local residents and increase tax revenues to the regional budget,” CEO of the Golden Ring Resort Yaroslav Voskresensky said.
VEB.RF, Sber and Partner Banks to Provide Financing for Kingisepp Ammonia and Carbamide Facility Construction
- Overall, VEB.RF, Sber and partner banks will provide c. RUB100bn to EuroChem Northwest-2;
- At the peak of construction, about 8,000 people will be working at the site;
- The facility is under construction, production is scheduled to start in 2023.
EuroChem Northwest-2, VEB.RF, Sber and partner banks (VTB, Gazprombank and Otkritie Bank) signed a complete set of loan and collateral documents to build phase two of the Kingisepp Ammonia and Carbamide Facility.
The signing ceremony took place during the St. Petersburg International Economic Forum at VEB.RF’s site in the presence of Member of the Strategy Committee, Chairman of the Nomination, Remuneration and Corporate Governance Committee and Non-Executive Director of EuroChem Northwest-2 Andrey Melnichenko, VEB.RF Chairman Igor Shuvalov and a representative of EPC, a subcontractor of Maire Tecnimont.
A syndicated loan arranged by VEB.RF and Sber will amount to c. RUB100bn net of VEB.RF’s optional tranche to cover interest payments and to increase the project budget totalling RUB123bn, exclusive of VAT. The first tranche of the syndicated loan amounting to RUB27bn will be provided in the near future.
The production facility with an annual capacity of 1.1 million tonnes of ammonia and 1.4 million tonnes of carbamide will be launched in 2023. This is the second phase of the large-scale industrial project. The first phase involved putting into operation an ammonia production facility with a capacity of 1 million tonnes per year. The products are exported to more than 10 countries.
Nikolay Tsekhomsky, First Deputy Chairman and Member of the Management Board, VEB.RF:
“Export-oriented projects are one of VEB.RF’s strategic areas. The new VEB.RF’s strategy views exports as one of strategic priorities. We focus on the promotion of Russian goods and services in entering new markets. Financing gas-to-chemicals projects is an important task for us. This is about considerable capital investment. It is necessary to provide long term money for borrowers.”
Vladimir Rashevsky, CEO, MCC EuroChem:
“Financing of construction by EuroChem of phase two of the Ammonia Facility in Kingisepp, Leningrad Region, started by VEB.RF, Sber, VTB, Gazprombank and Otkritie Bank is the biggest project financing ever in the history of our company. It is noteworthy that this is the first such project implemented by EuroChem with Russian banks, and debt-to-capital ratio is 80% to 20% for the first time. Financing the construction of phase 2 of EuroChem Northwest-2 facility will bring added impetus to further development of our facility cluster in Kingisepp formed after the operational commissioning of EuroChem Northwest-1 two years ago.”
Andrey Shemetov, Senior Vice-Pressident and Head of SberCIB:
“We have been cooperating with EuroChem in various areas and recognise a thorough elaboration of all its initiatives. Sber as an arranger of this syndicated financial transaction highly significant for the Russian market is pleased to provide financial backing to such a large-scale project. Construction of a modern advanced production site of a world class will substantially strengthen Russia’s and EuroChem’s positions in the global ammonia and carbamide market.”
Dmitry Snesar, Head of Client Coverage and Senior Vice President, VTB Bank:
“VTB and EuroChem have a long-term and successful relationship. We are very pleased to support the construction of phase 2 of a modern ammonia and carbamide facility. Such advanced facilities produce added-value gas products and increase Russia’s export potential, create new jobs and increase budget revenues, thus having a significant role in the development of the region and contributing to the local residents’ well-being. In addition, for us as a creditor is very important that the company uses advanced technologies that ensure efficient processing of initial products and resource cycling.”
Aleksey Belous, Deputy Chairman, Gazprombank:
“For several years, Gazprombank has been involved in large-scale investment projects in cooperation with leading producers of mineral fertilisers. This sector is among the few global economy segments demonstrating sustainable increase in production and consumption volumes. Implementation of the EuroChem Northwest-2 project will not only enhance the company’s exports but also contribute to the development of this whole sector of Russia’s chemical industry. Tightly scheduled commissioning of a large-scale production facility requires consolidated efforts of many parties, and we are pleased to be one of the financial partners selected by EuroChem to implement such a high-technology project.”
Viktor Nikolaev, Deputy President & Chairman of the Management Board, Otkritie Bank:
“Otkritie Bank pays particular attention to financing projects with high export potential. Cooperation with EuroChem is fully in line with our development strategy, and we are pleased to witness its further strengthening. The EuroChem Northwest-2 project will create new ammonia and carbamide production facilities, thus facilitating the growth of non-resource exports and creating new jobs in Kingisepp. I’d like to note close, effective cooperation between VEB.RF and commercial creditors resulting in an optimal investment solution involving several measures of government support.
The project will ensure the annual growth of non-resource exports of USD0.4bn. At the peak of construction, about 8,000 people will be working at the site. The project will create 354 high-technology, competitively paid jobs.
Russia to Start Building Modern University Campuses Before the End of 2022
At least three projects to build world-class campuses will be started in Russia before 1 December 2022. The project launch was agreed by participants in the strategic session of the Ministry of Science and Higher Education focused on creating and developing modern university campuses in Russia.
Before 15 June 2021, the Ministry of Science and Higher Education is to establish the selection criteria for university campus projects, and before mid-August - to select at least five most mature projects. Construction will be based on the inter-university model, and the new campuses will meet strategic development goals of the respective universities and regions.
“We intend to achieve this goal together with regional authorities relying on the best global solutions and existing campus models. It is very important to develop an architectural concept for each campus to make sure it blends in with urban environment. In addition, it is necessary to consider territorial innovative capacity and specifics and ensure qualitative growth of Russia’s economy through a synergy between research centres and academic institutions,” Deputy Prime-Minister of the Russian Government Dmitry Chernyshenko said at the end of the strategic session.
The campus building projects will be based on Public-Private Partnership mechanisms. The government contribution will be no more than 60%. The remaining financing will be provided by private investors including raised funds.
The projects will be initiated by regions. Involving private investors is a compulsory condition, given that the projects will be based on their financial models. Campus management will also be conducted by private investors. Investors’ future income will comprise campus accommodation fee for students and university teachers as well as fees for commercial, social and housekeeping services.
VEB.RF is actively involved in pre-project work including joint discussions with customers and potential investors.
“We would like to provide project implementation tools and offer a helping hand. We have extensive expertise in Public-Private Partnership projects. But we cannot build a modern campus without a private investor,” said VEB.RF Chairman Igor Shuvalov.
Resolution of the President of the Russian Federation No. 419-pr of 17 March 2021:
“To create in 2022-2030 a network of modern university campuses in specific Russian regions designated as priority and geostrategic border territories of the Russian Federation*, and launch at least three campus building projects before 1 December 2022 involving major repairs and reconstruction of the existing academic institutions.”