22 february 2011

Prime Minister Vladimir Putin chairs a meeting of the Vnesheconombank Observation Council

Vladimir Putin

At a meeting of the Vnesheconombank Observation Council

“We began to shift priorities last year as the situation stabilised, with greater attention to long-term objectives of development, major investment projects for modernisation and re-equipment, and promotion of small businesses and mortgage loans – the key targets for this year.”

Vladimir Putin's introductory remarks:

Ladies and gentlemen,

The Vnesheconombank Observation Council is meeting for the first time this year. We will talk about the bank's plans and long term goals. Vnesheconombank played a critical role during the crisis, when it supported our economic pivots – banking and industry – and took part in programmes to rehabilitate banks and businesses. In fact, VEB was one of the centres of anti-crisis troubleshooting. We began to shift priorities last year as the situation stabilised, with greater attention paid to the long term objectives of development, major investment projects for modernisation and re-equipment, and the promotion of small businesses and mortgage loans – the key targets for this year. In particular, the bank intends to expand its loan portfolio by more than 100 billion roubles towards ambitious investment projects. We will discuss some of these projects today.

Roughly 10 billion roubles are earmarked for the support of small businesses. I would like to remind you that by 2015, we are to increase the financial support of small- and medium-sized businesses to 250 billion roubles, compared to last year's 50 billion. The development programme for mortgage loans must receive full funding. The VEB has earmarked about 200 billion roubles for these purposes, including housing loan refunding.

VEB participation must guarantee affordable interest rates on housing loans. The overall scope of mortgage crediting is also to increase. We expect it to reach the pre-crisis level, 650 billion roubles per year, by 2012.

Please regard the development of the practical activities of VEB's regional branches in the North Caucasus and the Far East among this year's priorities. These agencies are to cooperate closely with investors, assess investment projects from an economic standpoint, and monitor them. As you know, a corporation for the development of the North Caucasus has been established already. All organisational matters for the establishment of the Direct Investment Fund for the Far Eastern Federal District and the Baikal area must be settled before May 1. Projects for the Russian Far East, to total 88 billion roubles, are undergoing VEB expert consultation. I am sure that those targets will be met and that VEB will retain its reputation for economic proficiency.

I would like to note in this regard that VEB was awarded the highly sought-after international award for the Transaction of the Year in 2010. Congratulations!

Three VEB projects – the renovation of the Khabarovsk Petroleum Processing Plant, the construction of a petrochemical plant in Tobolsk, and the reconstruction of Pulkovo Airport in St Petersburg – received the highest distinction. We will discuss several other high-tech projects today.

I would like to pay special attention to several projects – particularly a $1.6 billion credit line for the construction of an ammonia, methanol, and carbamide plant in Tatarstan. The project was based on the latest resource-saving and energy-efficient technologies, and anticipates the greatest possible environmental friendliness and computerised production management.

The new facility will produce nitrogen fertilisers. Russian agricultural producers will acquire the greater part, while granulated carbamide promises lucrative exports to CIS and other European and Asian countries.

We discussed the project in detail with the leadership of Tatarstan, which attaches great importance to it and fully participates in it, providing another guarantee that the project will be success.

I would like to call your attention to another issue. At the end of last year, we made a decision on VEB participation in the funding of regional and municipal projects for urban infrastructure development, directed towards public-private partnership for modernising water supply, heating, municipal transport, and other projects. VEB will provide an annual two billion roubles for these purposes from this year through 2015.

Vnesheconombank's teamwork with the Moscow City Hall resulted in a list of investment projects in transport infrastructure and the municipal economy, with the bank providing 900 million roubles so far this year.

There is another project to which I attach critical importance. That is shipbuilding. As you know, we have a programme to revive it. Shipyards are under construction in the Far East and Northwestern Russia. The United Shipbuilding Corporation has a sizeable stock of orders – for more than a hundred vessels. At the same time, understandably, our companies are hard-put to regain their position in the market after many years of stagnation. The situation requires special government support. We are proposing one such measure: VEB will guarantee reimbursement to clients in order to make Russian shipyards more competitive. Clients can be sure that contract requirements will be met 'to a T' with major financial guarantees totalling 40 billion roubles.