VEB.RF Provides First Tranche to Finance Supply of Russian High-Technology Equipment to Uzbekistan
The first RUB330mn tranche was transferred to Almalyk MMC to finance export contracts with Mining Engineering, NPGM and Elektromash.
VEB.RF began financing the supply of Russian mining machinery to Uzbekistan under the large-scale programme to modernise one of Uzbekistan’s largest mining and smelting companies.
VEB.RF and Almalyk MMC signed a RUB1.8bn facility agreement in November 2020.
Daniil Algulyan, Deputy Chairman of VEB.RF:
“This is the second transaction financed by VEB.RF as part of a comprehensive modernisation of Almalyk MMC. VEB.RF had previously fully financed the supply of BelAZ 220-tonne haul trucks, with Russian components exceeding 30 percent.”
VEB.RF and Eximbank of Russia Provide Financing for Supply of Municipal Vehicles to Tashkent
VEB.RF and Eximbank of Russia have provided the first tranche in the amount of around RUB677mn to finance the supply of Russian municipal vehicles.
The vehicles will be supplied to Uzavtodor (Uzbekistan Highways under the Committee for Motorways of the Republic of Uzbekistan), Tashkent’s Chief Land Improvement Department, and other municipally funded institutions of Uzbekistan.
Daniil Algulyan, Deputy Chairman and Member of the Management Board, VEB.RF:
“VEB.RF and Eximbank of Russia have provided financing in roubles for a pilot project in Uzbekistan. This is an important step to fulfil VEB.RF’s objective to use national currencies to fund export projects.”
Tatyana Sakharova, Deputy Chaiperson of the Board, Eximbank of Russia:
“We see good prospects for joint projects between VEB.RF and the National Bank of the Republic of Uzbekistan to finance the supply of high-technology equipment to Uzbekistan. We hope that our partnership will make it possible to expand Russian exports and to develop relations and trade between Russian and Uzbek companies.
In September 2020, VEB.RF’s management and the National Bank of the Republic of Uzbekistan for Foreign Economic Activity in principle agreed to finance the supply of Russian manufactured municipal vehicles and special equipment to Uzbekistan during the Russian business mission to Uzbekistan. In December 2020, VEB.RF and Eximbank of Russia entered into respective loan facilities with the National Bank of Uzbekistan.
The vehicles will be supplied by Russian manufacturers: KAMAZ, Merkator Kaluga, Kominvest-AKMT, and Kurgandormash. Most of the supplied vehicles are based on KAMAZ chassis and Russian manufactured auxiliary equipment.
VEB.RF is Ready to Become One-stop Solution for International Development Banks to Consider Infrastructural Projects in Russia
“Improved coordination and interaction among development institutions will facilitate development and boost potential of development banks not only in Russia, but also in Eastern Europe and Central Asia. The Russian Ministry of Finance is ready to coordinate this effort,” Pavel Snisorenko, Director of the Department for International Financial Relations, Ministry of Finance of the Russian Federation, said during the session “Multilateral Development Banks in the Post-COVID Era: Old Challenges and New Opportunities” at the St. Petersburg International Economic Forum in 2021.
“We have many instruments in our arsenal to facilitate the implementation of development projects. We are ready to employ them. Namely, we can provide bilateral and technical assistance to other countries etc.,” Pavel Snisorenko said.
The round table participants discussed the role of development banks in today’s world, their challenges and optimal ways to tackle them.
“Development requires unlimited resources, this why every dollar contributed to a development bank should be used as efficiently as possible for the sake of development,” Pavel Snisorenko said.
The pandemic helped the banks to embrace ESG agenda faster, to pay much more attention to the development of human capital, and balance coexistence of human beings and the environment.
Svetlana Yachevskaya, Deputy Chairperson and Member of the Management Board, VEB.RF:
“VEB.RF’s expertise and role on the Russian infrastructure market make it possible for us to become a one-stop solution for international development banks to consider investments into Russian projects. We have all the resources and competencies to evaluate project’s consistency with the mandates of MDBs and the highest international quality standards, and their eligibility for various support instruments. This joint effort made it possible to harmonise best approaches of Russian and multilateral development banks, to share the best practices with the Eurasian Economic Union, which will enable sustainable infrastructure development in this major and dynamic region.”
The panel discussion was attended by representatives of the World Bank, the New Development Bank, the Asian Infrastructure Investment Bank, the Eurasian Development Bank, the Black Sea Trade and Development Bank, the International Bank for Economic Co-operation, VEB.RF, VTB Infrastructure Holding, Expert RA, and KMPG.
The Russian Federation is a stakeholder in the following MDBs: institutions of the World Bank Group, the European Bank for Reconstruction and Development, the Asian Infrastructure Investment Bank, the New Development Bank, the Eurasian Development Bank, the Black Sea Trade and Development Bank, the International Bank for Economic Co-operation, and the Interstate Bank with the total stated capital over USD750bn.
VEB.RF and Government of the Chelyabinsk Region Launch SIB to Support Intellectually Disabled People
The Chelyabinsk Region has become one of the pioneers to launch a social impact bond (SIB) in the area of assisted living for people with mental health disabilities. The SIB’s concept is approved by State Development Corporation VEB.RF that has traditionally been the operator for such projects. The respective agreement was signed at the SPIEF-2021 by Irina Butorina, Minister for Social Relations of the Chelyabinsk Region, and Mikhail Alashkevich, Managing Director of VEB.RF’s Government Agent Office.
The project aims to help mentally impaired local residents to become equal members of society. In the next two years, experts will assist 24 local residents in vocational training, finding a job, and improving their quality of life. The main goal of participants to the SIB is to never return to living in neuropsychiatric establishments. Eight participants will receive vocational training at home supported by their families. The other 16 participants who are patients of care homes will live in groups in specially selected apartments. The SIB’s participants will attend educational workshops.
The project will be implemented by Family+, a charitable foundation for disadvantaged families and kids. In the last two years, the foundation launched an assistance living programme for mentally impaired people. Participants to the programme learn how to switch from living in a care home to an apartment. The project will teach independence to the young participants who will be guided by mentors.
Svetlana Yachevskaya, Deputy Chairperson and Member of the Management Board, VEB.RF:
“Our task is to drastically increase the quality of life for these people, to give them an opportunity to socialise, to learn a profession or a craft, to lead a socialised life, to become independent. The main task is not to let the participants to this SIB end up in neuropsychiatric establishments again.”
VEB.RF will operate the project and assist the stakeholders throughout its implementation. Preparation is under way. First 16 participants to the SIB will move into new apartments from 1 October 2021. At this stage, social workers will be also selected.
“This innovative social impact bond will become one the main tools for the region to replace hospitals with homecare. Which will significantly improve the quality of life for mentally disabled and will make it possible for them to become equal members of society,” Irina Butorina, Minister for Social Relations of the Chelyabinsk Region, said. The Chelyabinsk Region has nine neuropsychiatric establishments for adults and three for children. These establishments have around 3,500 in-patients in total. Of course, we understand that not all of them are eligible for assisted living, but certain patients have potential to lead a socialised life if supported by social services and non-governmental development institutions.”
The project received support from Russian Copper Company, which contributed RUB31mn. The funds will be channelled into accommodation and support to social workers which will assist people with mental health disabilities.
This the second Russian SIB in the area of assisted living, the first one was launched in Yakutia last April.
VEB.RF, Sber, Prosvescheniye Group Join Forces to Launch Large-scale Schools Construction Programme under Supervision of Russian Ministry of Education
- VEB.RF signed first agreements of intent with ten regions to build new schools.
- The signing ceremony took place during the SPIEF-2021 at the panel discussion “Big Change: Investing into the Future”.
During the panel discussion “Big Change: Investing into the Future”, VEB.RF announced a significant equity investment in ProSchool LLC (a subsidiary of the Prosvescheniye Group). A new ownership structure will be formed in Q3 2021 following the approval of the transaction by the governance bodies of all the stakeholders.
It is another step for an unprecedented large-scale schools construction PPP programme. All the new schools will have state-of-the-art equipment and will benefit from the best infrastructural solutions. This programme is one of the key components of the Education national project under the supervision of the Russian Ministry of Education.
ProSchool LLC was approved by the Russian Government as a concessionaire. Russian constituent and municipal entities have the right to enter into PPP agreements with ProSchool without competitive bidding to build new schools as part of the public education development programme. VEB.RF’s equity investment into ProSchool LLC is part of the joint VEB.RF and Sber PPP agenda to develop educational infrastructure. Sber intends to become ProSchool’s key financial partner to build schools using the PPP mechanism.
Sergey Kravtsov, Minister of Education of the Russian Federation:
“We selected pilot projects under the programme, and we saw constituent entities’ interest in PPP agreements. A new systemic federal player with a fast track project preparation and implementation procedure will make it possible for us to fulfil the task set be the President.”
Igor Shuvalov, Chairman, VEB.RF:
“VEB.RF’s new strategy is centred around partnerships. We are confident that this ambitious and socially important task, to build schools, may be fulfilled only by this model. VEB.RF’s Management Board resolved to approve VEB.RF’s equity investment into ProSchool to fulfil the President’s instruction. We believe that our key task is to provide the constituent entities of the Russian Federation with methodology and organisational support to benefit from public support measures to implement projects together with ProSchool. We intend to participate in structuring financing for the projects and financing ProSchool’s projects with our partner banks.”
Anatoly Popov, Deputy Chairman of the Executive Board, Sberbank:
“ProSchool’s projects stem from our PPP competencies, experience in concessions to build schools, demand from the Russian Ministry of Education and constituent entities to build state-of-the-art educational facilities using the PPP mechanism. We intend not only to be the main financial partner for such projects, but also to offer organisational and methodological support.”
Vladimir Uzun, President of the Prosvescheniye Group:
“ProSchool will be able to scale its projects in all constituent entities of the Russian Federation only by partnering up with strong financial organisations. We are glad to announce our partnership with Sberbank and VEB.RF to develop ProSchool. The Prosvescheniye Group believes that we should not only assist the concessioner in building educational facilities in line with modern educational and upbringing standards. But we also should assist the executive authorities in the development of future federal and municipal educational institutions by training administrative and academic staff, and transferring best extended education practices for future school children.”
The partners have plans to implement projects in more than 50 Russian regions. The Government resolved to tighten the schedule for implementation of the projects: new schools shall open their doors by 2024 to cope with the school children’s boom.
VEB.RF Chairman Igor Shuvalov and heads of ten regions signed cooperation agreements to work on projects to build educational institutions for the Russian regions under PPP agreements. Pilot projects will be launched in: Vladimir, Irkutsk, Omsk, Samara, and Novgorod Regions, Krasnoyarsk Territory, Republics of Buryatia and Yakutia, and Khanty-Mansiysk Autonomous District.
The participants to the session, including school children, teachers, principals discussed approaches to fulfil the instruction of the Russian President to the Russian Government and State Development Corporation VEB.RF: to create more than 1,300 new schools. More than 500 schools will be built under a new joint programme of the Russian Ministry of Education and VEB.RF to obtain private financing. The programme will require RUB235bn of federal budget funds and RUB295bn from private investors. VEB.RF is ready to co-finance the project and to attract financing from partner banks. VEB.RF’s commitment is limited at 30% of the total private financing under the programme (circa RUB90bn).
The rules for financing schools construction with VEB.RF’s support, including PPP projects are established by Ordinance of the Government of the Russian Federation “On Amendments to the Federal Government Programme ‘Education Development’”. The programme will make it possible for more than 647 thousand children to get school education. This is one of the crucial components to reach the key goal of the Education national project: to become one of the top ten countries in terms of the quality of general education by 2030.