VEB is committed to supporting innovative industrial projects that make a radical difference for Russia’s
industries unrelated to raw commodities, aiding the implementation of cutting-edge technology, bankrolling
exports and infrastructure development. To the recipients of all this funding —and we are speaking
of more than 200 ongoing projects — this is “long” and relatively inexpensive money,
which makes it the much-needed wherewithal to put new manufacturing businesses in motion, create new
jobs, roll out new technology, and market new products in Russia and globally. The critical part is that
Vneshekonombank knows these investments will pay back. VEB will not add any project to its loan portfolio unless
it has performed all-round evaluation on the project, complete with an assessment of risk and market
outlook. The development flagship bank has entered the year 2018 with clearly defined priorities, well charted tasks,
a detailed business plan and the right team to make it a reality.
VEB is currently building its new project portfolio, culling projects from the strategic industries with an emphasis
on technological breakthrough potential, downstream processing capacity, infrastructure and export opportunities.
We select our projects in close collaboration with the pertinently specialized ministries and key market
players. VEB has set up a unit dedicated to in-depth, industry-specific project analysis. Our new support
instruments are focused on tracking the project’s “critical path” to see how any fluctuations
affect the project’s financial performance and forecast the project’s further progress by matching
it with the experience of similar projects from the past. This is the way to maximize the chances
of success for every project — as long as we get alerted in good time of any
difficulties arising in the course of the project. We have completely turned around the way we do business
in the regions. Now we have 79 regional managers in 50 regions on the case vigorously
culling the more promising projects, and 16 case studies are already on the table for the bank. There will
be VEB regional managers working in every region of Russia in 2018.
The launch of our “Project Finance Factory” opens up amazing vistas of opportunity for new
production financing. The central idea of the factory is to syndicate project lending by involving
government subsidies and government guarantees for debt issues. The syndication mechanism is such that that every
ruble invested by VEB will be bringing 3 to 4 rubles of supplementary investment into
the Russian economy. We can see a great deal of potential in the factory’s projects focused
on those industries that VEB, as the institution for development, views as high priorities.
VEB has contributed instrumentally to fostering the legal institution of syndicated lending in Russia
— a banking practice change that was awaited with great impatience by the entirety of Russia’s
banking sector. The new syndicated lending legislation is designed to remove any legal ambiguities in the
regulation of syndicated loan deals. When this legislative update takes effect, VEB stands to emerge as an active
syndication player.
The Development Bank Act and Syndicated Lending Act, both enacted at the end of 2017, are aimed at perfecting
VEB’s business in the capacity of a development institution. With the new Development Bank legislation,
Vneshekonombank will be in a position to successfully implement its 2021 development vision. The
legal framework is now in place to assure the success of VEB’s 2021 Development Vision.
In partnership with executive authorities, lawmakers, the competent ministries and the professional community, VEB
has worked very effectively to modify the current laws in a bid to become a better banking
institution in the service of development, redefining its approaches to the legal aspects of corporate
governance across VEB Group.
The business of Vneshekonombank is aligned with the national strategic objectives and Russia’s long-term
development priorities. The new legislation will enable further improvements to VEB’s business as a national
institution for development. Moreover, this new legislation broadens the bank’s functionality: VEB is now
poised to manage and/or participate in syndicated financing solutions, and it has been assigned a leading
role in lending support to projects as part of the National Technology Initiative and the digital
economy drive.
Who may benefit
Given the high relevance and novelty of the stated discussion topic, a great deal of interest should be expected
from the corporate counsels of Russian and international banking institutions, corporations and law firms, as well
as members of the judiciary.