Russian Prime Minister V.V.Putin Conducts a Meeting of Vnesheconombank’s Supervisory Board
The Premier said that although in 2009 VEB diverted considerable funds for implementing crisis management measures; it also carried on operating as the Bank for Development. V.V. Putin expressed confidence that in 2010 VEB’s financial resources would be used most effectively to technologically upgrade Russian industries and generate additional demand for innovations.
V.V. Putin’s opening address
Good afternoon esteemed colleagues. Let’s start Vnesheconombank’s Supervisory Board meeting.
First, we are to approve the report on the bank’s performance for 2009. And here I’d like to underline a very important point. The Bank spent considerable resources to implement crisis management measures and in this respect I’d like to say that these measures were quite successful.
At the same time, VEB carried on operating as the Bank for Development. Its investment loan portfolio increased by 77% to 230 billion rubles. Due to the Bank’s financial support 24 new projects were started in power engineering, agriculture and a number of other sectors. VEB launched a 250 billion ruble program to support mortgage lending. This also enabled commercial banks to reduce interest rates on mortgages. Sberbank President German Gref told me that Sberbank had abolished all bonuses and cut mortgage interest rates by 3% on average.
VEB provided considerable support worth 40 billion rubles to small and medium-sized enterprises. And in this respect I would like to say today that VEB’s overall performance can be assessed as positive.
In 2010, Vnesheconombank should also place main emphasis on preparing new investment projects, some of which we’ll discuss today.
For example, we have been offered to extend a long-term credit to build a modern timber deep processing integrated facility at the port of Vanino in the Khabarovsk Territory.
To my best knowledge, the project’s initiators have completed the first stage from the ground up in mid 2009.The second stage is to be completed in the second quarter of 2010.
Vnesheconombank is completing an eleven-billion ruble loan to finance the construction of the third stage, which is expected to increase production facilities and create 500 new jobs.
It should be noted that the investment in timber processing was not VEB’s first investment in the region, specifically, at the port of Vanino. In 2009, the construction of a new sea coal terminal with a designed export capacity of 12 million tons of coal started in Vanino.
Meanwhile, RAO RZhD is actively renovating the railway line from Vanino to Komsomolsk-on-Amur. Recently we held a meeting to discuss the project’s implementation. One of the most important elements of the project is to reconstruct and renovate the Kuznetsovsky Tunnel. It was built as early as in 1945. The new railway line would make it possible to use the Baikal-Amur Mainline to its full capacity.
It is obvious that it is this comprehensive approach to developing territories, infrastructure and natural resources that ensures sustainable development of the Far East in the most effective way.
Let me mention one more transport project. Vnesheconombank is to finance the purchase of two ice-class tankers. These are modern tankers, which our transport companies need badly. They are designed to transport oil produced offshore in the Barents Sea.
The first tanker, Mikhail Ulyanov, has been already delivered to the customer, Sovcomflot. The other tanker, Kirill Lavrov, has been launched and is due to be commissioned soon.
Vessels of this class haven’t been built in Russia before. They were built with the use of cutting-edge technology and breakthrough innovations. That is to say, VEB’s financial resources will be used to technologically upgrade Russian industries, in this particular case shipbuilding, and will generate additional demand for innovations.
It is these projects that we should focus in the future.
Let’s proceed to our discussion.
Origin: Internet Portal of the Government of the Russian Federation
On Decisions Taken by Vnesheconombank’s Supervisory Board
VEB’s profit for 2009 will be used to finance its activity – Dmitriev
NOVO-OGAREVO, May 26 - RIA Novosti. Vnesheconombank’s profit for 2009 will be fully allocated to the state corporation’s funds and used to finance its activity, Vnesheconombank Chairman Vladimir Dmitriev told journalists on Wednesday after the meeting of the state corporation’s supervisory board.
“The profit has been fully allocated to the Bank’s funds and will be used to finance Vnesheconombank’s activity”, said Dmitriev reminding that VEB’s profit for 2009 was 31 billion rubles.
The state corporation’s profit for the first quarter exceeded 20 billion rubles. Dmitriev said that if a decision to reduce interest rates on subordinated loans extended by VEB to Russian banks as part of crisis management measures was taken, the state corporation’s profit from such loans would be reduced by two thirds.
According to him, in terms of profit amount for 2009 the state corporation came out on top among other banks. In terms of profit amount for the first quarter of 2010, the Bank took second if not first place. Reportedly, Vnesheconombank’s net profit for January-March of 2010 was 23.1 billion rubles against 1.1 billion in the same period of 2008.
The Bank’s assets amounted to 1.8 trillion rubles and Vnesheconombank is among the third largest Russian banks.
Dmitriev reminded that incomes of 175 billion rubles from transactions with securities were reinvested and were committed for achieving core objectives.
VEB’s Supervisory Board approves the Bank’s participation in projects worth almost 500 Million Euros
NOVO-OGAREVO, May 26, /ITAR-TASS/. Today, VEB’s Supervisory Board approved the Bank’s participation in projects worth almost 500 million euros. Vnesheconombank Chairman Vladimir Dmitriev told journalists that the financing amount for the construction of tankers would be about 240 million euros and that another 250 million euros would be used to finance the construction of a timber processing factory.
VEB will participate in funding the project aimed at purchasing and operating Arctic shuttle tankers by Sovcomflot. The tankers are designed to ship oil, oil products and gas condensate. The main prospective transport route is the Prirazlomnoye oil field /the Pechera Sea/ - Western Europe. Before the start of the oil field’s exploitation, the tankers are expected to be used for shipping liquid hydrocarbons along the shipping line from ports of the Baltics to ports of Western Europe.
A timber processing integrated plant manufacturing chipboards and sawn timber is planned to be built in the Vanino district of the Khabarovsk Territory with a timber processing capacity of up to 1.1 million cubic meters per year. The project is aimed at enhancing natural resources utilization efficiency, promoting Russian industrial exports and boosting the region’s socio-economic development.
VEB to provide Sovcomflot with 240 million euros for purchasing Arctic tankers
Novo-Ogarevo. May 26. INTERFAX-AFI – Vnesheconombank (VEB) is to provide Sovcomflot with 240 million euros for purchasing and operating Arctic vessels designed to ship oil, oil products and gas condensate, VEB Chairman Vladimir Dmitriev told journalists.
V.Dmitriev said that that the Bank’s Supervisory Board approved the Bank’s participation in financing this project on Wednesday.
VEB’s Chairman said that this project was to be financed as part of Vnesheconombank’s leasing business. These vessels are planned to be bought out by VEB-Leasing and then let on time charter to Sovcomflot and Gazprom (PTC: GAZP).
These vessels are planned to be used for shipping oil and gas from the Prirazlomnoye Arctic oil field (the Pechora Sea). But even before the Prirazlomnoye oil field starts to operate, these vessels will be used in other projects. “Even now there is a contract for shipping oil from Murmansk to China”, said V.Dmitriev.
Two tankers Mikhail Ulyanov and Kirill Lavrov were built by the order of Sovcomflot at the shipyards in Saint-Petersburg. The first tanker, Mikhail Ulyanov, has been already delivered to the customer and the second tanker, Mikhail Lavrov, is due to be commissioned in the middle of this year. These vessels’ deadweight is 70 thousand tons.
Sovcomflot is one of the world’s largest maritime shipping companies specializing in natural resources shipping including by Aframax class tankers, petrochemical tankers and ice class tankers. It is a 100% state-owned corporation.
The Company’s earnings under the International Accounting Standards fell by 25% to $1.2 billion in 2009. Net profit almost halved to $217 million.
The Company’s fleet increased by 17 vessels in 2009, including 5 Suezmax-Class tankers and 4 Aframax-Class tankers, to 144 vessels with the total deadweight of 10 million tons.
V.Dmitriev believes that Tractornye Zavody’s debts can be restructured and then Vnesheconombank can finance its investment projects
NOVO-OGAREVO, May 26. /PRIME-TASS/. Vnesheconombank Chairman Vladimir Dmitriev believes that Tractornye Zavody’s debts can be restructured and then Vnesheconombank can finance its investment projects. He told journalists about it after the Bank’s Supervisory Board meeting where they discussed restructuring Tractornye Zavody’s debts.
“In our opinion and in accordance with the decisions taken by our Supervisory Board an issue of restructuring debts to commercial banks would be dealt with appropriately. Taking into account commercial banks’ positions, Vnesheconombank considers it possible to restructure the corporation’s debts and provide funds for implementing the corporation’s investment projects”, said V.Dmitriev
Russian President Dmitry Medvedev Holds a Working Meeting with Vnesheconombank Chairman Vladimir Dmitriev
VEB’s Chairman informed the President on the Bank’s activities in the field of innovations and modernization of the Russian economy as well as on the measures for supporting small and medium-sized enterprises (photo caption)
D.MEDVEDEV: Vladimir Alexandrovich, I’ve just met with American heads of venture capital funds involved in risky investment. They are ready to work on the Russian territory to implement our projects. This is of course a good thing, but it is also very important for our financial institutions, our banks, our development institutions to be ready to fund our economic modernization and invest in high technologies and innovations. What’s your Bank doing to this end?
V.DMITRIEV: We are fully keen to work in line with the objectives set for state financial and sectoral development institutions. In this respect, we intend to fundamentally review our approach to modernization and innovation projects in our new strategy for 2010-2014. This is a strategic line of activity for us. At present, about 15% of projects in Vnesheconombank loan portfolio are linked to economic modernization and innovations. Honestly speaking, they largely deal with modernization and import substitution rather than innovations.
D.MEDVEDEV: Rather than innovations in a narrow sense.
V.DMITRIEV: You are absolutely right. We hope, together with other innovation–oriented development institutions, to change the established practice after all. In this respect, I’d like to tell you that for a month or even more we have been cooperating with financial and sectoral development institutions under a new paradigm of relations. We signed an agreement on cooperation in April. There are nine parties to the agreement including such key development institutions as Vnesheconombank, RUSNANO, the Russian Venture Company, the Fund for Supporting Small Enterprises in Scientific and Technological Sphere, the Federal Agency for Youth Affairs, the Moscow Interbank Currency Exchange, and Opora Rossii , that is, all those institutions more or less involved in supporting small and medium-sized enterprises in the innovation sector.
We believe that this agreement is very important in terms of establishing a unified data base, providing financing at all stages of innovation cycle, involving financial institutions on the one hand and sectoral institutions and agencies on the other to make this process continuous or as we say to create an innovation lift. We have already started establishing this data base working in close contact and on a bilateral basis, for example, with RUSNANO; I’m a member of RUSNANO’s Supervisory Board. We have similar agreements with other companies that are parties to this agreement. In other words, we sit on their supervisory boards and we are cooperating with them systematically at a lower, working level.
D.MEDVEDEV: It’s a good thing that all our development institutions have taken a consolidated position. You were right in agreeing to cooperate in order to be able to make joint efforts. I’ve just talked with foreign investors and it became clear to me that we need to create mechanisms for supporting small and medium-sized enterprises. Large institutions are sure to find money in any case with the assistance of RUSNANO for example, in its capacity of a specialized state development institution or with the assistance of such universal development institution as VEB. It’s very important to involve small enterprises in this sphere. This is, of course, a lot more difficult to do and we should admit that these are risky operations with regard to which relevant provisions have to be made and certain decisions on Central Bank current regulations have to be taken. But if we fail to establish some kind of scheme, they will never be provided with a source of financing.
V.DMITRIEV: I’d like to inform you on the results we have achieved together with our subsidiary bank, the Russian Development Bank. It started to carry out a brand new program in the innovation sector. This program is called ‘Financing for Innovations and Modernization ‘. This means that the Russian Development Bank’s partner banks are to receive financial support of up to 150 million rubles from the Russian Development Bank to finance SME projects in the innovation sector. Credits are to be extended for a period of at least seven years. Most importantly, an interest rate will be two thirds of the Central Bank’s refinancing rate. In fact, the Russian Development Bank will operate on a break-even basis without generating any significant profit margin.
D.MEDVEDEV: As a result, we get an interest rate of six percent. Is this an effective interest rate at which loans will be extended?
V.DMITRIEV: This is an interest rate at which credits will be extended to regional banks but we’ll also keep track of interest rates for final borrowers to ensure that they do not exceed 10 percent.
D.MEDVEDEV: But this is the maximum because if an interest rate exceeds ten percent this sort of business could lose its appeal.
V.DMITRIEV: We are launching this project hoping that it will be in demand. The Russian Development Bank’s another initiative is to establish a Direct Investment Fund for the bank to directly participate in SME projects in the innovation sector thus minimizing risks and making these projects more attractive to regional banks.
D.MEVEDEV: You mean quite big projects?
V.DMITRIEBV: No, projects in the SME sector.
D.MEDVEDEV: Precisely in the SME sector.
V.DMITRIEV: Yes. Sometimes banks are reluctant to assume risks when project initiators do not invest themselves. In this case, the Russian Development Bank’s participation as a shareholder or as an investor in a project gives a certain degree of guarantees and protection to regional banks.
D.MEDVEDEV: Good. You should keep it going.
V.DMITRIEV: One more thing, Dmitry Anatoljevich, if I may. Being aware that high priority is being given now to socio-economic development of the North Caucasus we have again started examining projects, which were under discussion at our Bank before the crisis because a considerable emphasis is being placed now on developing the North Caucasus as a tourist and recreation cluster. We launched this initiative because we became quite experienced in funding Olympic projects and our current activities in Sochi as part of preparations for the Olympics are to a certain and maybe to a full extent in line with what is being planned to do in the North Caucasus but on a much larger scale and this includes transport and logistics infrastructure, Olympic sports facilities proper and the related infrastructure needed for implementing such a large scale project.
Moreover, in cooperation with Canadian company SNC-Lavalin, one of the largest engineering services providers, we established a joint venture, VEB-Engineering LLC. We are going to make use of our Canadian partners’ competence and expertise because they participated in building Olympic and sports facilities in Canada and other countries to provide a full project cycle from design to monitoring of proper use of funds, technological process control, expert examination in the North Caucasus at the facilities planned to be built in Karachayevo-Circassia, Adygea and Dagestan. We have again started to examine the Arkhyz project in Karachayevo –Circassia. This is a large scale project that requires the construction of complicated transport and energy infrastructure and we are ready to perform this work.
D.MEDVEDEV: It’s a good thing that you got down to examining these projects again because there’s no way of implementing them without the state’s support. In fact, there are ambitious plans to build a mountain-tourism cluster in the North Caucasus. I have been informed on these plans and I have approved them. You should go ahead with the plans, given the political decision.
The most important thing is that this will enable us to build resorts where, I hope, millions of our citizens can go to for their holidays. Now, they like this kind of holidays and they don’t have to spend their holidays abroad as we offer the same and sometime even better services. What is most important is to build infrastructure. Moreover, this will create about 150 thousand new jobs and this is crucially important for the North Caucasus.
Origin: official site of the Russian President