VEB.RF to Develop Post-Olympic Sochi

4 june 2021 года
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During the St. Petersburg Economic Forum, VEB.RF entered into several agreements to develop Olympic facilities in Sochi as part of the Tourism and Hospitality national project. The signing ceremony took place in the presence of the Deputy Prime Minister of the Russian Federation Dmitry Chernyshenko, VEB.RF Chairman Igor Shuvalov and the shareholder of the Krasnaya Polyana Resort Aleksander Tkachev.

Among the agreements is the agreement with Kurort Plus and Yug-Businesspartner specifying key principles of interaction and the procedure for carrying out projects for the development of Krasnaya Polyana resort, for integrated development of Sochi-Park, and for the construction of a five-star hotel complex with apartments and Sochi-Park Hotel Aqua.

The agreement is aimed at contributing towards the sustainable development of domestic and inbound tourism, creation and development of tourist clusters that facilitate the development of domestic and inbound tourism, increase of the domestic tourist flow, and social and economic development of the Krasnodar Territory and the city of Sochi as a mountain resort. The projects will be implemented as part of the Tourism and Hospitality national project and Economic Development and Innovative Economy government programme.

Another agreement was entered into with Sindika-O, OlympPlus and Mostovik Development to build an apart-hotel and a healthcare centre on the territory of Radisson Collection Paradise Resort and Spa, a swimming pool at Bridge Resort, and Mys Adler Sports Park. The Sports Park project is designed to support the Talent and Success Foundation (Sirius Educational Centre).

“VEB.RF’s major mission is supporting the achievement of national goals aimed at improving the quality of life of our citizens. Developing post-Olympic Sochi contributes towards implementing these goals, attracting investment in the region, creating new jobs and developing domestic tourism, which can give a powerful impetus towards Russia’s economic development, especially in the post-pandemic period,” said Alexander Tarabrin, Head of VEB.RF Real Property Projects and Asset Management and Member of the Board.

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Syndicate of VEB.RF and Partner Banks to Finance Udokan Second Phase

3 june 2021 года
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VEB.RF, Gazprombank, Sberbank and Udokan Copper (part of the USM Group, the founder and principal shareholder - Alisher Usmanov) agreed to finance the second phase of the Udokan copper deposit development project.

The signing ceremony took place during the St. Petersburg International Economic Forum at VEB.RF’s site in the presence of the Governor of the Trans-Baikal Territory Aleksander Osipov and VEB.RF Chairman Igor Shuvalov.

The project investments are preliminary estimated at USD4bn. The final amount of investment will be determined during the project due diligence. The project will receive financing under the Project Financing Factory programme, with VEB.RF acting as the Factory’s operator.

The second phase of the Udokan copper deposit development stipulates processing about 24 million tonnes of ore per year in addition to 12 million tonnes to be processed in the first phase.

The 26 million tonnes copper deposit is the largest in Russia and ranks fourth in the world. The copper grade of the ore is 1.0% according to the JORC classification (the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves). The end product of the first phase is cathode copper and sulphide concentrate, the output is expected to be 125 thousand tonnes of copper per year.

After commissioning the first phase, the Udokan mining and smelting facility will create more than 2,000 new jobs aside from allied sectors, and generate over RUB750bn in additional tax revenues for budgets at all levels during the first 25 years of operation.

Nikolay Tsekhomsky, First Deputy Chairman and Member of the Board, VEB.RF:

“We are launching financing for the second phase of Udokan development. Together with the first phase of Udokan development, this project is one of the most capital-intensive projects co-financed by VEB.RF and the largest project implemented under the Project Financing Factory programme. The PFF mechanism allows us to attract large investments from commercial banks. The Factory also helps investors and creditors to minimise project risks. The Udokan second phase will have positive impact for developing the Trans-Baikal Territory. Specifically, project initiators are implementing the programme for integrated territorial development, which will improve quality of life not only of the Udokan Copper employees but also of the local residents.”

Valery Kazikaev, Chairman of the Board of Directors, Udokan Copper:

“Development of Udokan, a huge and unique deposit in terms of complex mineral composition of ore, could not be started over 70 years since its discovery. We offered a unique technological development scheme. Today, we are successfully building the Udokan facility in the zone of severe climate, perpetually frozen under-soil and complex mountainous relief. The project investment reached about USD1.8bn including USD1bn invested by shareholders. Our confidence in project success and the government’s support of investments in the Far East allowed us to launch the second phase of the Udokan project.”

Aleksey Belous, Deputy Chairman, Gazprombank:

“Gazprombank traditionally plays an important role in developing the production and processing of non-ferrous metals in Russia. We together with our partners are turning a new leaf in the history of such a large project, which is important for the Eastern Siberia and Far East. I am confident that the project development will strengthen our successful cooperation and bring added impetus to the development of the Trans-Baikal Territory. The Project Financing Factory mechanism created by VEB.RF has proven its efficiency, while the Udokan-1 project participants have demonstrated their high professionalism. This inspires us to launch the Udokan-2 project.”

Olga Kharlamova, Vice President and Director of Key Client Lending, Sberbank:

“The Udokan copper deposit development project is strategic for the development of the Russian mining industry. Sberbank considers the project initiator - USM Group - to be a reliable and responsible partner and is pleased to participate in financing such projects critical to the country’s economy. The Bank as a member of the syndicate has already co-financed the first phase of the project on the Project Financing Factory principles and is planning to co-finance the second phase. Such large-scale project will substantially strengthen the company’s positions in the Russian and global copper markets.”

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Ufa East Exit Becomes Russia’s First IRIIS Certified Project

3 june 2021 года
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The results of pilot testing the Impact and Responsible Investing for Infrastructure Sustainability (IRIIS) system were presented at the St. Petersburg International Economic Forum (SPIEF-2021). The Ufa East Exit concession project implemented by the government of the Republic of Bashkortostan and the Bashkir Concession Company (part of the VTB Infrastructure Holding) was successfully assessed for compliance with the IRIIS principles having been assigned the ‘Golden’ achievement level. Respective certificates were officially handed over to the Head of the Republic of Bashkortostan Radiy Khabirov, VTB President and Chairman of the Management Board Andrey Kostin and General Director of the Bashkir Concession Company Asabali Zakavov.

The IRIIS system was developed by VEB.RF jointly with the PPP National Development Center and AECOM with support from the Russian Ministry of Finance to improve the quality and sustainability of infrastructure projects. The assessment methodology comprises three major aspects: Economy and Governance, Quality of Life, and Environment and Climate, each having certain criteria. The East Exit is Russia’s first IRIIS certified project.

After verification, the project got 1,879 marks or 62.6% of the highest possible value (3000 marks).  The highest marks were given on the Economy and Governance (76.7%) and Quality of Life (68.2%) aspects of the IRIIS methodology. The best results were demonstrated by the following criteria: the quality of project structuring, the minimum impact of construction on people, mobility and access, effective human resource management and internal communications.

Specifically, the project is subject to risk management regulations specifying the major stages and responsibility of participants. 1,500 people will be working at the site, with half of them being local residents. The share of local companies is 48.6%. Local companies provided materials and services for 5 billion roubles. The project provides for regular medical examinations and assessment of working conditions. Special conditions apply to conveyance of vehicles and people at the construction site including barrier-free environment.

In addition, the concessioner demonstrates rational use of natural resources: specific water consumption was reduced by 28.2% against the forecast volume. Wastes were reduced by 20% through their processing and reuse. There are no any designated forest or water fund lands, or any specially protected natural areas within the facility boundaries. Additionally, the company repairs environmental damages and engages in land reclamation and reproduction of aquatic biological resources. The facility’s commissioning will also have a positive impact on the environment. It is expected that pollutant emissions from vehicles will reduce by 35%, and greenhouse gas emissions - by 27%.

Radiy Khabirov, Head of the Republic of Bashkortostan:  

The East Exit project has proved its economic, environmental and social significance, thus increasing its implementation efficiency and attractiveness for domestic and foreign investors. Besides, the IRIIS certification proves that the project is interesting for federal investors. This will minimise risks for all participants. Ultimately, this joint systemic work will allow us to create in Ufa a quality road construction infrastructure complying with international standards and make the life of local residents comfortable and safe.

Andrey Kostin, President and Chairman of the Management Board, VTB Bank: 

“The East Exit co-financed by the VTB Group is a good example of successful implementation of major infrastructure projects in the regions. We, jointly with Bashkir government, tried to set high quality standards at the stage of project preparation and planning, which were confirmed by the IRIIS certification. I think that the introduced certification system will improve the quality of projects launched in Russia and contribute to spreading global best practices.”

Svetlana Yachevskaya, Deputy Chairperson and Member of the Board, VEB.RF:  

“When selecting pilot projects, we decided to include ‘our’ project where VEB.RF is a creditor or a direct participant. So we selected the Ufa East Exit project in which we are involved through the Project Financing Factory. The first IRIIS testing results demonstrate that the system is fully operational and it can show the project’s strengths and weaknesses and identify growth opportunities, and the IRIIS certificate assures the project quality. I’m confident that joint and well-coordinated work of the infrastructure market participants will allow us to extend the IRIIS certification system nationwide.”

Asabali Zakavov, CEO, Bashkir Concession Company: 

“The selection criteria for pilot projects were rather strict. In Autumn, with the assistance of VEB.RF, the Bashkir Concession Company being a concessioner for the East Exit devoted considerable effort to be included in the list of pilot projects. To become Russia’s first certified project is both a great challenge and enormous development opportunity. And, of course, it’s a unique experience offering additional advantages for the project team.”

Pavel Seleznev, CEO, National PPP Development Center: 

“The assessment process for the first pilot project was rather long and labour-intensive and that brought about the necessity of digitalisation. To speed up the certification process and make its mechanism friendlier for all participants of the infrastructure market, we are planning to launch a special online module in Autumn 2021 using ROSINFRA resources. The launched service is intended to be used for applying for project certification, tracking the major verification stages and communication with participants and verifiers.”


The project for construction of a new exit road from Ufa to the M-5 Ural Highway (the East Exit) is implemented under a concession agreement entered into in 2017 between the Bashkir Concession Company (the concessioner) and the Republic of Bashkortostan (the concedent). A total of RUB40bn will be invested in the project. VEB.RF and VTB will invest RUB11.6bn in the project under the Project Financing Factory programme. It is intended that the exit road will be commissioned in late 2023.

The shareholders of the Bashkir Concession Company include the VTB Infrastructure Holding and Limak Group (Turkish construction and investment holding). The VTB Group and VEB.RF are partially financing the construction. The general contractor is Limakmarashavtodorogi.

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VEB.RF and VTB Group to Finance Development of One of the World’s Biggest Platinum-Copper-Nickel Deposit

3 june 2021 года
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VEB.RF, VTB Group and Russian Platinum signed a memorandum of intent to finance the Chernogorsk deposit of platinum-copper-nickel ore in the Krasnoyarsk Region. The signing ceremony took place during the St. Petersburg International Economic Forum in the presence of the Russian President Vladimir Putin (a live link-up).

The memorandum was signed by: VEB.RF Chairman Igor Shuvalov, VTB President and Chairman of the Management Board Andrey Kostin and Russian Platinum President Musa Bazhaev.

The project involves building a mining and processing plant for seven million tonnes of ore per year in the Chernogorsk deposit. According to the company’s estimates, the project’s phase one investments exceed RUB190bn including long-term project finance. The project will receive financing under the Project Financing Factory programme, with VEB.RF acting as the Factory’s operator.

Igor Shuvalov, Chairman, VEB.RF :

“Jointly with VTB, we are structuring the transaction to finance the project for the construction of a mining and processing plant in the Chernogorsk deposit under the Project Financing Factory programme to minimise the risks of the project initiator and creditor at the investment and operational stages of this expensive project. All rouble-denominated tranches, including tranches from a commercial bank, are government subsidised for the entire length of the loan in respect of fluctuations in the key interest rate of Russia’s Central Bank. VEB.RF will also pay an additional tranche to cover the project budget increase and pay interest at the project’s investment stage, thus allowing the borrower to raise the classic project finance.  Successful implementation of this large-scale project will make a significant contribution to the increase of exports. The project contributes towards national goals related to Russia’s export targets.

Andrey Kostin, President and Chairman of the Management Board, VTB Bank:

“The construction of a mining and processing plant in the Chernogorsk deposit is a large-scale project for the Russian Arctic zone, which will facilitate the region’s industrial and economic development. The comprehensive development of the deposit will make the Russian Platinum one of the world’s leaders in producing platinum group metals, thus strengthening Russia’s leading position in the industry and export potential. VTB Bank is making investment in the project in the form of bridge financing provided to Chernogorsk Mining Company.”

Musa Bazhaev, President, Russian Platinum:

“Development of the Chernogorsk deposit is the first stage of the project implemented by the Russian Platinum Group in the Norilsk industrial district. The next stage involves the development of the southern part of Norilsk-1 deposit. The project will create a state-of-the art industrial complex comparable in scale with existing facilities and distinguished by the use of modern technologies including resource-saving and environmental protection technologies. Russia will rank among the leaders in the global palladium and platinum market. Involvement of VEB.RF and VTB Group in the project will help to decrease the implementation period and improve ther project’s effectiveness.


Today, the Chernogorsk deposit contains 131 million tonnes of ore rich in 4E metals (palladium, platinum, rhodium, gold) - 3.19 grams per tonne, copper - 025%, and nickel - 0.20%. The project will be implemented drawing on the best standards applied in the mining and metallurgical industry as well as sustainable development principles.

The Project Financing Factory provides for financing of projects on the “80 to 20” syndication principle, with 20% being the project initiator’s own funds and 80% - borrowed funds syndicated through tranches to minimise risks of project participants.

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VEB.RF Group to Finance the World’s First Cross-Border Passenger Cableway Project in Amur Region

3 june 2021 года
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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.

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