Prime Minister Putin’s introductory remarks:

Ladies and gentlemen,

Some of you attended the United Russia conference in Khabarovsk yesterday, where we discussed plans for the Far East. In particular we highlighted the need to get Vnesheconombank and other development institutions involved in investment projects in the region.

There are many challenging business ideas for the Far East, in particular for its energy, steelmaking, forestry and fishing industries. As I said, we plan to create the Fund for Direct Investments in the Far Eastern Federal District and the Baikal Region.

VEB’s participation in this fund will allow us to get regional authorities, major financial institutions, funds and investment companies involved as well. Today we will review the fund’s concept and proposals regarding its structure. Incidentally, yesterday Vnesheconombank signed an agreement issuing Dallesprom a three billion rouble loan for an advanced timber-processing complex in the town of Amursk in the Khabarovsk Territory.

We will also review another project that is critical for the Far East, the reconstruction of the Knevichi airport. This project will be implemented as part of preparations for the APEC summit and the programme to remake the image of Vladivostok. A new modern passenger terminal will increase the airport’s capacity to four million people a year. Once rebuilt, the airport’s runway will be able to receive almost all types of aircraft, both Russian and international. Vnesheconombank’s investment in the project will total four billion roubles, of which it has already provided 2.3 billion roubles in loans.

Today we will also hear a report on the progress the bank has made on its mortgage programme. I’d like to emphasise that the programme began nearly a year ago, and Vnesheconombank has already issued over 4,000 mortgages worth some seven billion roubles, which account for about 30% of the loans taken out to buy new housing.

The average interest rate – I’d like to stress that I’m speaking about average numbers – stands at 11%, as we expected. In addition, the banks credited by VEB have cancelled commissions for issuing loans. There are mortgages issued at lower interest rates. For example, Sberbank offers mortgages for several categories of employees at 9.5%. There are higher interest rates in the market as well, 11%, 12%, and beyond. But the average interest rate stands between 11% and 11.5% across the country. These are the target numbers we set for this year. Not bad for a start. We can expect the amount of loans to increase significantly in 2011.

There are also proposals to expand Vnesheconombank’s involvement in housing programmes so the bank not only encourages mortgage lending but also contributes to boosting housing construction.

To this end, Vnesheconombank could credit commercial banks so they fund projects for affordable economy-class housing. As we agreed before, this investment should amount to at least 50 billion roubles, and the funding source should be Vnesheconombank’s return on operations in financial markets. I’d like to remind you that the bank earned profits from Russian companies’ shares which it bought during the recession and which have gone up. It would be sound to invest these revenues in housing programmes. These monies will be provided at only 3%, which will allow banks to reduce interest rates for end borrowers, ordinary people.

VEB will soon begin to fund regional and municipal projects to modernise utilities. It will create a public-private partnership to modernise water pipelines, heating systems, municipal transport and other facilities. The bank will allot two billion roubles for these purposes annually.

And one more point: this year Vnesheconombank has attracted over $5 billion for up to 15 years in the international market. It is the first time that a Russian lending institution has been provided funds on such favourable terms. The bank has also issued bonds in roubles worth 25 billion roubles. This shows that trust in Russian banks is growing and that the Vnesheconombank team is made up of real professionals.

Let’s begin our discussion.