First Project Financed by VEB.RF and Gazprombank Through Project Financing Factory Goes into Commercial Operation

The project was completed by KuibyshevAzot and financed by VEB.RF and Gazprombank. It was the first to receive approval under the Project Financing Factory programme.

An official ceremony took place on 2 December 2020 to mark the opening of the facility. The event was attended by Igor Shuvalov, Chairman, VEB.RF; Viktor Kudryashov, Prime Minister of the Samara Region; Alexander Gerasimenko, Director General, KuibyshevAzot; and Vyacheslav Okhotin, Vice President and Head of Oil & Gas and Chemicals Financing, Gazprombank.

The facility’s annual output is 140,000 tonnes of K-grade sulphuric acid and 360,000 tonnes of refined oleum. The facility produces caprolactams used to make polyamide fibres and threads. The project aims to provide feedstock for caprolactams and derived products and scale up their production. The new sulphuric acid plant will also ensure feedstock security and stable operation for KuibyshevAzot throughout its import-substituting process chain. The project will result in increased tax revenues and new high-technology jobs. KuibyshevAzot exports 45% of its end products.

Investments in the project reached 8.6 billion roubles, including 4.7 billion roubles borrowed from Gazprombank and VEB.RF under the Project Financing Factory programme. The syndicated loan agreement was signed during the Russian Investment Forum in Sochi in February 2019. VEB.RF’s approved commitment totalled 3.8 billion roubles, while its share in the syndicate was 2.5 billion roubles. Gazprombank lent 2.2 billion roubles for ten years.

Igor Shuvalov, Chairman, VEB.RF, said: “VEB.RF’s key goal is to maximise investment in projects that contribute towards national goals. We are mandated to inject up to 3 trillion roubles into the economy and work with commercial banks to attract investment of 10 trillion roubles by 2025. VEB.RF and partner banks have approved 11 projects to date, totalling 930 billion roubles, and the first of them are already in the operational phase. The Tolyatti -based company’s project is the first transaction approved under the Project Financing Factory programme. We are satisfied with this partnership: the investors and Gazprombank agreed quickly and started production ahead of schedule.”

Vyacheslav Okhotin said: “Gazprombank was the first to carry out its customers’ projects through the Project Financing Factory. All the teams involved in the project—KuibyshevAzot, VEB.RF and Gazprombank—proved their professionalism and willingness to be innovative. The efficient preparation and execution of the transaction using a totally new financial mechanism in the market laid the foundations for its scalability in the future.”

Viktor Kudryashov, Prime Minister of the Samara Region, said: “The production started seven months ahead of schedule. It’s a new milestone in the company’s history because it will allow them to set up their own manufacturing operation for sulphuric acid and refined oleum and create a reliable source of feedstock, which will enable the company to scale up production, bring down costs and improve the quality of products sold all over the world. I want to thank you, Mr Shuvalov, and VEB.RF for your huge support for this project. The company, VEB.RF and Gazprombank signed the agreements to implement the project as early as a year ago. And today we are present at the opening ceremony here. We were able to put the idea for the project into practice largely because it was implemented in the Tolyatti advanced development zone, and the company gets considerable regional tax benefits.”

Alexander Gerasimenko said: “The project is aimed at increasing the competitiveness and export potential of Russia’s only process chain, from caprolactams and polyamides to threads and fabrics, created by KuibyshevAzot. Working in partnership with VEB.RF and Gazprombank under the state-supported Project Financing Factory programme demonstrated the high professionalism of the teams. We find it very important to use the Factory mechanism to obtain resources for the introduction of advanced technology ensuring a high level of industrial and environmental safety.”

In the environmental context, it is noteworthy that the project uses advanced technology ensuring 3.5-fold emission reduction compared even with best available techniques. Equipment has optimal characteristics with respect to feedstock, energy consumption and product quality with guaranteed optimal permissible emissions, effluents and waste.