• The project was completed through the Project Financing Factory; VEB.RF’s financial partner was Gazprombank
• The expansion of production created 120 jobs
• The new production facility is to make Shchekinoazot one of Russia’s largest methanol producers and exporters

Shchekinoazot’s methanol production facility with a capacity of 500,000 tonnes per year was put into operation in the Tula Region. The project was a pilot under VEB.RF’s Project Financing Factory (PFF) programme. The project is to increase current methanol output by 50% to 1.5 million tonnes per year. Shchekinoazot’s share is forecasted to reach about one-third of the Russian methanol market by 2023.

An official ceremony took place on 8 October 2021 to mark the launch of production. The event was attended by VEB.RF Chairman Igor Shuvalov and Shchekinoazot President Boris Sokol.

The project is consistent with the presidential decree concerning the promotion of non-resource non-energy exports. The total project value is 22 billion roubles.

Igor Shuvalov, Chairman, VEB.RF:

“This is already the fourth project completed through the PFF. In partnership with Gazprombank and us, the project initiator was able to start production one and a half years ahead of schedule. The Project Financing Factory was an effective mechanism to support the project. In addition, the changes made to the PFF programme this year enable us to combine different kinds of government support within one investment project. For example, the Corporate Competitiveness Enhancement Programme (CCEP) is important to many of our export-oriented projects. It gives substantial subsidies on the interest rate, and the Shchekinoazot project used it in conjunction with the PFF mechanism. We have a large-scale programme to develop the Yefremov site ahead of us. We are happy to work in partnership with Shchekinoazot and we want to increase cooperation with them.”

Boris Sokol, President, Shchekinoazot:

“The M-500 is a high-tech facility. It uses resource- and energy-efficient technology. The project has strategic significance to the company and as well as this country. What we’ve done is the result of our painstaking work, accurate cost analysis, knowledge of the market, and ability to develop a strategic vision. None of this would have been possible without the help of our skilful, highly qualified staff; without cooperation with authorities, major financial institutions or international licensor. And the cornerstone is science and advanced technology, which ensure the industrial and environmental safety of our production. We build production facilities, but we do so without harm to unique nature in the Tula Region, to the Yasnaya Polyana conservation area.”

Alexey Belous, Deputy Chairman of the Management Board, Gazprombank:

“Gazprombank is a long-time partner of Shchekinoazot. The project enabled the company to get additional advantages of financing and start production ahead of schedule. The new facility consumes less natural gas and energy than its peers, operates an environmental monitoring system and helps this country to fulfil its export potential. I think the Project Financing Factory mechanism has proved effective. I’m sure Gazprombank’s experience and expertise in carrying out high-profile investment projects will allow us to continue to implement initiatives contributing to economic growth in Russia.”

The M-500 project used high-performance technology to minimise its environmental impact.

The syndicated loan agreement for the project to build the M-500 methanol production facility using project financing was signed by Shchekinoazot, VEB.RF and Gazprombank during the Russian Investment Forum in Sochi in 2019.

According to experts, VEB.RF’s comprehensive approach to unlocking the potential of gas-to-chemicals projects will allow methanol production to be increased by 50% by 2030 due to investment projects. If all projects that VEB.RF has in the pipeline are completed, methanol production will rise by more than 11 million tonnes per year.