VEB.RF, Sber, Prosvescheniye Group Join Forces to Launch Large-scale Schools Construction Programme under Supervision of Russian Ministry of Education

• VEB.RF signed first agreements of intent with ten regions to build new schools.
• The signing ceremony took place during the SPIEF-2021 at the panel discussion “Big Change: Investing into the Future”.

During the panel discussion “Big Change: Investing into the Future”, VEB.RF announced a significant equity investment in ProSchool LLC (a subsidiary of the Prosvescheniye Group). A new ownership structure will be formed in Q3 2021 following the approval of the transaction by the governance bodies of all the stakeholders.

It is another step for an unprecedented large-scale schools construction PPP programme. All the new schools will have state-of-the-art equipment and will benefit from the best infrastructural solutions. This programme is one of the key components of the Education national project under the supervision of the Russian Ministry of Education.

ProSchool LLC was approved by the Russian Government as a concessionaire. Russian constituent and municipal entities have the right to enter into PPP agreements with ProSchool without competitive bidding to build new schools as part of the public education development programme. VEB.RF’s equity investment into ProSchool LLC is part of the joint VEB.RF and Sber PPP agenda to develop educational infrastructure. Sber intends to become ProSchool’s key financial partner to build schools using the PPP mechanism.

Sergey Kravtsov, Minister of Education of the Russian Federation:

“We selected pilot projects under the programme, and we saw constituent entities’ interest in PPP agreements. A new systemic federal player with a fast track project preparation and implementation procedure will make it possible for us to fulfil the task set be the President.”

Igor Shuvalov, Chairman, VEB.RF:

“VEB.RF’s new strategy is centred around partnerships. We are confident that this ambitious and socially important task, to build schools, may be fulfilled only by this model. VEB.RF’s Management Board resolved to approve VEB.RF’s equity investment into ProSchool to fulfil the President’s instruction. We believe that our key task is to provide the constituent entities of the Russian Federation with methodology and organisational support to benefit from public support measures to implement projects together with ProSchool. We intend to participate in structuring financing for the projects and financing ProSchool’s projects with our partner banks.”

Anatoly Popov, Deputy Chairman of the Executive Board, Sberbank:

“ProSchool’s projects stem from our PPP competencies, experience in concessions to build schools, demand from the Russian Ministry of Education and constituent entities to build state-of-the-art educational facilities using the PPP mechanism. We intend not only to be the main financial partner for such projects, but also to offer organisational and methodological support.”

Vladimir Uzun, President of the Prosvescheniye Group:

“ProSchool will be able to scale its projects in all constituent entities of the Russian Federation only by partnering up with strong financial organisations. We are glad to announce our partnership with Sberbank and VEB.RF to develop ProSchool. The Prosvescheniye Group believes that we should not only assist the concessioner in building educational facilities in line with modern educational and upbringing standards. But we also should assist the executive authorities in the development of future federal and municipal educational institutions by training administrative and academic staff, and transferring best extended education practices for future school children.”

The partners have plans to implement projects in more than 50 Russian regions. The Government resolved to tighten the schedule for implementation of the projects: new schools shall open their doors by 2024 to cope with the school children’s boom.

VEB.RF Chairman Igor Shuvalov and heads of ten regions signed cooperation agreements to work on projects to build educational institutions for the Russian regions under PPP agreements. Pilot projects will be launched in: Vladimir, Irkutsk, Omsk, Samara, and Novgorod Regions, Krasnoyarsk Territory, Republics of Buryatia and Yakutia, and Khanty-Mansiysk Autonomous District.

The participants to the session, including school children, teachers, principals discussed approaches to fulfil the instruction of the Russian President to the Russian Government and State Development Corporation VEB.RF: to create more than 1,300 new schools. More than 500 schools will be built under a new joint programme of the Russian Ministry of Education and VEB.RF to obtain private financing. The programme will require RUB235bn of federal budget funds and RUB295bn from private investors. VEB.RF is ready to co-finance the project and to attract financing from partner banks. VEB.RF’s commitment is limited at 30% of the total private financing under the programme (circa RUB90bn).

The rules for financing schools construction with VEB.RF’s support, including PPP projects are established by Ordinance of the Government of the Russian Federation “On Amendments to the Federal Government Programme ‘Education Development’”. The programme will make it possible for more than 647 thousand children to get school education. This is one of the crucial components to reach the key goal of the Education national project: to become one of the top ten countries in terms of the quality of general education by 2030.