VEB.RF Group to Provide Support for Projects Worth RUB30tn Under New Strategy Until 2030

Over the next six years, the VEB.RF Group in partnership with the government and business intends to provide support for projects worth more than 30 trillion roubles. This amount includes over 13 trillion roubles for projects to support non-resource non-energy exports.

Prime Minister Mikhail Mishustin supported the VEB.RF Group’s new development strategy for the period until 2030, which can give an additional 2 per cent to an increase in Russia’s GDP by 2030.

According to VEB.RF Chairman Igor Shuvalov, the group will continue to focus its efforts on achieving the country’s national development goals until 2030. “Today we and the Government discussed the main approaches to our 2030 strategy. This is the time when we must implement the presidential decrees on the national development goals. The most popular areas of the new strategy, which we discussed together with people from the business community, our largest customers, included technological leadership, the development of urban economies, support for exports and entrepreneurship. At the same time, VEB.RF will focus its efforts on supporting the largest investment projects; and in the area of technological leadership, we will rely on the competencies of entities pulled together under the umbrella of VEB.RF: Skolkovo, the Russian Fund for the Development of Information Technologies, the Foundation for Assistance to Small Innovative Enterprises, and others,” he said during a specialised strategic session.

Igor Shuvalov also noted that under the strategy completed by the VEB.RF Group for the period 2021–2024, the value of projects and transactions supported by the group amounted to 24.4 trillion roubles (with a plan of 17 trillion), with 8.6 trillion in direct support, mostly in the form of guarantees and surety bonds. This made it possible to build and modernise more than 600 enterprises, 13 airports, launch projects to renew urban electric transport and underground railway systems in ten Russian cities, and implement other socially important projects in all 89 regions.

“VEB.RF has a leading role in the system of Russian development institutions. Its special legal status allows it to be a credit institution that can receive refinancing from the Central Bank and operate in the financial markets. A unique and flexible approach to risk assessment has been established for VEB.RF. This enables VEB.RF to offer marketable support tools. VEB.RF’s surety bonds and guarantees, participation in syndicates allow banks to reduce the burden on capital, change the risk weights for loans shared with VEB.RF, which makes it possible to implement a larger number of projects, including through the Project Financing Factory mechanism. VEB.RF is the most important tool for ensuring economic stability and the development strategy for the future of our country. Together with commercial banks, it finances large-scale projects aimed at developing infrastructure, industry, strengthening the country’s technological potential and improving quality of life,” said Maxim Reshetnikov, Russian Minister of Economic Development.

The VEB.RF Group has five high-priority strategic areas for the period until 2030: large investment projects, key population centres and geostrategic regions, technological leadership and sovereignty, support for exports and businesses.

To develop these areas, according to Igor Shuvalov, the VEB.RF Group proposed introducing new support tools and expanding existing mechanisms. For example, as part of the development of public-private partnerships, on the President’s instructions, any project worth over 3 billion roubles will be given due diligence on its budgetary, socio-economic efficiency and the balance of risk distribution between public- and private-sector participants.

As a result, all these new and existing support measures will help to attract 40 roubles of private investment for every governmental rouble invested by VEB.RF in large investment projects, build and modernise twice as many airports, and increase the volume of cargo turnover through the Northern Sea Route to 25 million tonnes. In addition, the implementation of the strategy will help to contribute towards socially significant outcomes and the national development goals. For example, a contribution to the growth of investment in fixed assets (17 per cent), a growth in the manufacturing industry (6 per cent) and non-resource non-energy exports (26 per cent), and an increase in the income of small and medium-sized enterprises (48 per cent).

In respect of developing key population centres, VEB.RF proposed expanding the ongoing programme to upgrade urban electric transport, the programme to modernise public utility facilities and build modern campuses, and the programme to recycle municipal solid waste. In addition, VEB.RF intends to launch of a programme of concessional financing for investment projects in key population centres, set up projects to provide training and advanced training for participants in the special military operation and their family members, and introduce the City Life Index into VEB.RF’s business processes as a tool for prioritising investment projects. According to Igor Shuvalov, new and existing measures to support the urban economy are to cover more than 500 cities across the country, 25 million people, with a special focus, as before, on the development of the Far East and the Arctic.

In respect of achieving technological leadership, new areas have been added to the efforts of the group’s specialised development institutions (such as the Industry Development Fund, the Skolkovo Foundation, the Foundation for Assistance to Small Innovative Enterprises, and the Russian Fund for the Development of Information Technologies), with the participation of VEB.RF. Together with the Skolkovo Foundation and the Skolkovo Institute of Science and Technology (Skoltech), VEB.RF will support technological cooperation to organise manufacturing processes using in-house production lines. The group will also support the formation of technology holding companies in strategic industries with high export potential, the growth of industrial efficiency through the implementation of the Industry Development Fund’s programmes aimed at workforce productivity growth, digitalisation, and robotics. By 2030, the Industry Development Fund intends to finance enterprises in the manufacturing industries for a total of 850 billion roubles.

As a result, Russia should have at least five domestic lines for developing rehabilitation products, medications and vaccines, robotics and other high-technology products, and at least seven technology holding companies and 750 new industrial production facilities, which together will create almost 50,000 new jobs.

In the area of export support, the VEB.RF Group has planned nine new mechanisms. These include building a resilient system of payments, developing an alternative payment infrastructure for local currencies, opening transport and logistics centres, industrial parks, and port facilities in key countries, identifying the export potential of technological leadership and import substitution projects, and supporting their implementation. Particular attention will be paid to the development of the governmental digital platform “My Export” and the programme to promote Russian products under the national brand “Made in Russia”, which are the responsibility of Russian Export Center. As a result, the volume of supported exports may be 13.3 trillion roubles by 2030, with the export support portfolio for key countries reaching 85 per cent.

In the area of promoting entrepreneurship, the VEB.RF Group will allocate a total of more than 5 trillion roubles through RSMB Corporation to support small and medium-sized enterprises. This amount includes 2.5 trillion roubles intended for companies in the industries that form the supply-side economy. These are manufacturing, domestic brands, urban economies, IT, high technology, small technology companies, and the hospitality industry. The ongoing programmes with proven effectiveness and relevance in the current economic conditions will be continued. For instance, the VEB.RF Group will continue to use the mechanism for sharing risks with banks and business owners to obtain debt financing, namely so-called “umbrella surety bonds”.

There are also plans to launch a joint umbrella surety bond of RSMB Corporation and VEB.RF specifically for SMEs participating in the formation of the urban economy and for support for domestic brands. Sharing the surety bond risks between VEB.RF and RSMB Corporation will enable a greater number of business owners to receive debt financing.

“We already have a portfolio of projects. Our model allows us to focus on specific areas, depending on the government’s request. The ecosystem of development institutions enables us to support and service almost any projects, from innovative ideas and initiatives of school and university students to large industrial producers and infrastructure construction megaprojects. We are ready to offer new projects and tools,” Igor Shuvalov said.