Russian President Vladimir Putin’s working meeting with Vnesheconombank Chairman Vladimir Dmitriev

Vladimir Dmitrievbriefed the President on the Bank’s lending to the real economy as part of the Government’s anti-crisis measures.

Photo: the Presidential Press and Information Office

V. PUTIN: Good afternoon.

Mr Dmitriev, Vnesheconombank is taking part in implementing the Government’s plan for sustainable economic development. I would first like to hear about what the bank is doing in this line of activity.

Second, the bank was established as a development institution, above all to operate in the real economy. I know you have many projects and I would like to discuss them too.

V.DMITRIEV: We are indeed involved in the anti-crisis programme. Under this programme, we’ll lend to the real economy and at the same time receive substantial financial support from the state, taking into account the external limitations we are currently facing, and to be honest the limited potential for borrowing on the domestic market. We are thus receiving state support through several channels, from the Finance Ministry and through the National Wealth Fund.

Last year, we received a capital injection of 30 billion rubles from the Government. We are also grateful to the Central Bank for substantially expanding their support measures for us. They have expanded credit volumes, raised the limits, and included us in the refinancing programme on a par with the state-owned and private commercial banks.

At the same time, I’d like to say that we are continuing to finance the real economy. Decisions were taken on this issuelast year and this year. Our Bank and Supervisory Board regard it as one of our top- priority tasks. Our priorities include key projects that will help to bring about recovery asthey are designed tomodernise the economy, ensure import substitution, and reinvigorate the industrial sector.

In this respect, I’d like to stress that many companies facing difficulties arising from the crisis and the limited opportunities for borrowing to finance their working capital are turning to us to help them to restructure their debts. We are responding to their requests and are not raising interest rates.

VLADIMIR PUTIN: You mean on loans extendedearlier?

VLADIMIR DMITRIEV: On loans extended earlier and loans we are going to extend now. That is, we are essentially building up losses at some point down the road, but this is our conscious choice in order to make it possible for businesses to boost their potential and continue their investment projects.

We go on a premise that the state has declared that it will support Vnesheconombank through using financial resources of the National Wealth Fund and through the Central Bank’s preferential lending rates. And they will to some extent compensate for the temporary losses we are sustaining now by continuing to extend ruble-denominated loans at an interest rate of 11 percent and foreign currency loans at the interest rate that was agreed when the loan agreements in question were concluded.

V.PUTIN: What projects in particular would you like tosingle out?

V.DMITRIEV: I would like to mention a project to fund AvtoVAZ to implementits new production expansion programme, which will result eventually in full localisation of engine production here. In particular, all Renault cars made at the AvtoVAZproduction facilities and production facilities in Moscow will be equipped with 1.6-litre engines produced here in Russia.

There is also Ford Sollers’ large-scaleprogramme to build production facilities and localise engine manufacturing here, and then there is the KamAZprogramme, into which we have already invested tens of billions of rubles. We just recently received a request, which we are currently examining, for another 35 billion rubles to buy out bonds issued by KamAZ for new production.

In the modern high-tech sector, there is the company T-Platforms, which is a key business in producing software for supercomputers, and there is a number of businesses in the aircraft manufacturing industry and of course Sukhoi Civil Aircraft Company.

In this respect, I want to note the debt restructuring measures and financial support measures for Sukhoi and Sukhoi Civil Aircraft Company, along with the other measures that Vnesheconombank is taking to support promotion of their products on markets abroad. We were happy to see the amount of resources and goods delivered to Mexico, and these kinds of deliveries are expanding.

We see that the system of comprehensive support for industrial exports is working well now. It is through this system that the SukhoiSuperjet aircraft is being sold abroad. VEB-Leasing is operating work in this area, and so are EZIAR – Export Insurance Agency of Russia, and Eximbank of Russia. This entire system is fully operational now.

We have decided to set up a special centre to support industrial exports, which will include institutions I’ve already mentioned and new additional powers, so that we can launch a single window format for Russian exporters ready to receive state support through the existing financial institutions, including VEB and the institutions I’ve already mentioned.

Under conditions of import substitution and in terms of ensuring our economic and above all security and self-sufficiency, I’d like to single out projects that we are fundingin the agro-industrial sector.

V.PUTIN: There is also food processing.

VLADIMIR DMITRIEV: Yes, this includes meat and poultry processing. We recently signed a new loan agreement for financing a project that Miratorg is implementing.

This project is designed to produce top-class beef using the most advanced technologies, with its capacity being around 120,000 tons of marbled beef. Production has already been launched and we plan to continue funding this project.

The loans in this particular case are foreign currency loans, as they are needed for purchasing pedigree livestock, the amount of loans will be about or a bit less than 2 billion dollars

But this is an important business that uses the most advanced equipment and includes slaughterhouse and the most advanced production facilities, its products are in demandin all regions of the Central Federal District.

VLADIMIR PUTIN:Good.

Origin: Internet-Portal of the Government of the Russian Federation