Financing Investment Projects

Annual Report 2013
Site map Русский

# Financing Investment Projects

Investment project financing is one of Vnesheconombank’s key functions as a bank for development. Pivotal for Vnesheconombank when making a decision on co-financing an investment project are the project compliance with sectoral and regional priorities set forth by Vnesheconombank’s Memorandum on Financial Policies and its significance for the national economy.

The Bank primarily focuses on infrastructure projects that could remove the existing constraints impeding both the development of specific industries and the economy at large, as well as on projects aimed at integrated territorial development, construction of new industrial facilities and modernization of non-resource sector enterprises. A particular focus is placed on projects with high innovation-oriented component.

Primarily, Vnesheconombank engages in financing investment projects via long-term credits. Alongside that, the Bank makes investments in securities and equity investments in project operators/initiators, as well as guarantees their obligations thus raising the possibility of attracting funds of other creditors and investors for the project.

At the beginning of 2013, Vnesheconombank participated in 139 investment projects. By year-end, the number of projects increased to reach 158.

In 2013, Vnesheconombank completed 10 investment projects. The Bank’s credit resources earmarked for investments were fully recouped.

These include a major infrastructure project on the construction of a bulk cargo complex in Ust-Luga commercial seaport. The Ust-Luga port is one of a few Russian ports in the region that could ensure deep water access for large vessels. The terminal constructed is used for handling of exported oil products. The total volume of oil products handled in 2013 reached 16,750 thousand tons.

In 2013, within the Bank’s investment project agenda, dozens of facilities were constructed and put into operation: from new industrial buildings and manufacturing lines of operating enterprises to new plants, energy facilities, hotels and sports facilities.

To illustrate, Adler CHP, a modern cogeneration plant with a capacity of 360 MW, was commissioned. The plant was constructed with the use of technological solutions and materials corresponding to the highest global environmental standards.

“Konstructor Zhivotovsky”, a mixed river-sea tanker, was set afloat. The tanker is the last out of 10 vessels intended for export transportation of bulk oil cargoes.

The FORD-SOLLERS joint venture commissioned assembly lines for Ford Explorer and Ford Kuga models.

A challenging task of on-time commissioning of the Sochi Olympic facilities financed by the Bank was successfully fulfilled.

In the reporting year, Vnesheconombank started financing 29 new investment projects with the total value of RUB 592.7 bn and Vnesheconombank’s commitment – RUB 283.3 bn. These include projects for construction and modernization of transport and energy infrastructure, tourism infrastructure, housing and public utilities infrastructure, as well as projects in such industries as aircraft and transport engineering, timber processing, mining and defense industry.

The projects include:

### Creation of MAZDA SOLLERS joint venture to manufacture Mazda and SsangYong automobiles in Vladivostok, Primorsk Territory

Total project value – RUB 8.9 bn

Vnesheconombank’s commitment – RUB 4.9 bn

The project envisages creation of an enterprise to manufacture Mazda and SsangYong automobiles (up to 85,000 per annum) to meet the consumer demand for modern Japanese and Korean automobiles of different brands, models, types and grades. The major models to be produced are Mazda CX5, Mazda 6, SsangYong Actyon, SsangYong Kyron.

Social and economic effects: increase of tax receipts to the budgets of all levels by RUB 28.0 bn, creation of more than 2800 new jobs.

### Development of North-Western section of Elginsk coal deposit in Republic of Sakha (Yakutiya)

Total project value – USD 4.7 bn

Vnesheconombank’s commitment – USD 2.7 bn

The project is aimed at implementing Stage I of the integrated development of Elginsk coal deposit with the coal reserves of 2.1 billion tons. The deposit makes the top 3 largest global untapped coal deposits (construction of an open pit and mining and processing complexes with an overall estimated capacity of 11.7 million tons per annum).

The project is included into the long-term Program for Development of Russian Coal Industry up to 2030 and the Strategy of Social and Economic Development of Far East and Baikal Region up to 2025.

Social and economic effects: discounted budgetary effect – RUB 40.3 bn, new jobs for more than 5000 people.

### Creating a network of standard design facilities for subsequent accomodation of healthcare institutions engaged in hemodialysis and other methods of hemocorrection

Total project value – RUB 6.3 bn

Vnesheconombank’s commitment – RUB 5.0 bn

The project provides for construction of 58 dialysis centres in 41 Russian regions. Vnesheconombank’s strategic partner – Fresenius Medical Care (Germany) secures a long-term lease of the centres, finances the purchase and delivery of medical equipment. People who suffer from kidney failure will have an opportunity to undergo a proper treatment in close vicinity to the place of residence. New outpatient care institutions for providing replacement therapy by hemodialysis and peritoneal dialysis will be equipped with up to the minute equipment. Admittedly, each centre will provide up to 200 patients per day with life-saving services (above 30 thousand hemodialysis procedures per annum).

The project is expected to increase tax receipts to the budgets of all levels by RUB 8.2 bn and create more than 6900 jobs.

### Construction of a data centre in Saint-Petersburg

Total project value – RUB 3.1 bn

Vnesheconombank’s commitment – RUB 2.2 bn

The data processing centre is created on the basis of Stack.CUBE patent-protected technology. The Stack.CUBE complex modular solution could provide the best operating characteristics of the data centre. Customers will be offered a wide range of services, from the much-in-demand ones (the lease of servers and communication channels) to the service that is unique for the domestic market (the lease of a server box).

Social and economic effects: increase of tax receipts to the budgets of different levels by RUB 1.6 bn, creation of 68 new jobs.

In 2013, the amount of Vnesheconombank’s investment loan portfolio (the loans earmarked for investment projects) witnessed more than one third growth and as at 01.01.2014 reached RUB 893.1 bn (01.01.2013 – RUB 668.9 bn). At year-end 2013, Vnesheconombank participated as a creditor in 153 investment projects (01.01.2013 – 134 projects).

At the end of the reporting period, the overall amount of investments in shares (equity investment in authorized capital) within the framework of financing investment projects was running at RUB 32.8 bn.

In 2013, as part of financial support for investment projects, Vnesheconombank issued 4 guarantees for the total amount equivalent to RUB 1.7 bn. As at 01.01.2014, the overall amount of guarantee portfolio for the above purposes was RUB 3.6 bn.

As at 01.01.2014, out of the overall amount of investment loan portfolio, RUB 182.2 bn accounted for the loans granted within the framework of financing 36 investment projects in priority areas of the Russian economy modernization. These include projects intended for enhancing energy efficiency and saving, developing medical equipment and pharmaceuticals, strategic computer technologies and software.

At the end of 2013, the total amount of loans for 57 innovation-oriented investment projects reached RUB 330.1 bn.

Portfolio of investment loans (by projects categorized by delivery goals), RUB bn

## Competition for the Development Award given for a significant contribution to social and economic development of Russia

In 2013, the first national competition for Development Award instituted by Vnesheconombank for outstanding achievements in the implementation of nationally important investment programs and projects was held.

The major criteria of estimating the projects selected for the Award (220 applications) are project innovative, export- or import-substituting orientation, as well as project significance for Russia’s social and economic development.

Winners of the 1st Development Award handed out at the St. Petersburg International Economic Forum included:

- Best Infrastructure Project category – the project on Infrastructure Development of Industrial Parks of Kaluga Region: Forming Automobile and Automotive Component Cluster presented by Kaluga Region Development Corporation;
- Best Industrial Project category – the project on Construction of a Wagon Factory in Tikhvin, Leningrad Region presented by Tikhvin Carriage Works;
- Best Project on Integrated Territorial Development category – the project on Construction of Kemerovo Satellite Town Lesnaya Poliana presented by Promstroi Association of Construction Organizations;
- Best SME Project category – the project on Reconstruction of the Heating System in Bakal, Satka District of Cheliabinsk Region presented by UralEnergo Development.

НАВЕРХ