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Vladimir Putin: Mr Shuvalov, VEB is our biggest development institution. How are things going for you? What are you focusing on? What are your most interesting or promising undertakings?

Chairman of the VEB.RF State Development Corporation Igor Shuvalov: Mr President,

During the latest St Petersburg Economic Forum, you mentioned an instruction to audit all support measures related to the technology agenda. VEB oversees six entities in the technology domain, including import substitution and the shaping of a new technology agenda. We have launched this audit. But before I report on this matter, allow me to share some key figures with you.

As of the end of the first half of the year, VEB’s business was worth 7.5 trillion rubles, making it one of the top five lending institutions in the country. Needless to say, VEB – and you know perfectly well the way it operates – enjoys special status as set forth by federal law. Still, we abide by all the main regulations and instructions as prescribed by the Central Bank.

This is why, while tasked with a special mission, we can compare VEB to major lending institutions. Our work primarily consists of working with private banks to form syndicates, which is something that is usually done by development banks. They can be international development banks created by several countries specifically for this purpose, or national development banks.

Our capital currently stands at 1.4 trillion rubles, while the capital adequacy ratio is 16 percent. These are solid figures.

We maintain close contacts with the Central Bank to ensure it has a clear understanding of everything we do, including the state of our portfolio. Among other things, this gives the Central Bank confidence that when we allocate funding or provide guarantees to lending institutions, we do not create new risks for the Russian Federation’s financial system.

You know that VEB faced a challenging period and had to go through a financial recovery process, but that is all behind us now. Nevertheless, the Central Bank pays special attention to our operations to ensure that nothing of this kind happens again.

On capital, Mr President, as I reported to you at the meeting of the Council for Strategic Development and National Projects, our portfolio now accounts for approximately 2.5 percent of GDP. By comparison, in other countries where development banks play a major role, such as the People’s Republic of China and Germany, these institutions’ portfolios are significantly larger than VEB’s.

We have every opportunity to expand our portfolio, and we will focus our efforts on doing so. However, to achieve this, our operations must remain transparent and highly stable – without creating risks for the national financial system, as I emphasised previously. Additionally, we require new sources of capital and are actively exploring options in collaboration with both the Central Bank and the Government.

On technological development, we have made significant progress in advancing import substitution in recent years. To date, we have supported thousands of projects through various instruments, including the Industrial Development Fund and the Agency for Technological Development, facilitating domestic production of gearboxes, other automotive components, trains, and other critical goods.

Denis Manturov and our colleagues regularly update you on these developments. We remain committed to this agenda and see no obstacles to its continued implementation. The Industrial Development Fund retains sufficient capital, which is consistently replenished in line with your instructions and Government directives.

However, securing Russia’s technological leadership represents a distinct and equally critical agenda. Naturally, this effort is driven by highly skilled professionals who are also exceptionally ambitious. Their mission to establish our nation’s leadership in the global arena demands not only groundbreaking knowledge and far-reaching expertise but also robust financial instruments to support these ambitions.

We are currently conducting an audit of support measures, working jointly with Economic Development Minister Maxim Reshetnikov, who has voluntarily engaged in this initiative. Within the working group established by you under the Council for National Projects, we are now reviewing the entire range of instruments.

Primarily – until now – these have included three main instruments: grant allocations, participation in investment capital, and the provision of debt financing. We will now assess which organisations, including the Industrial Development Fund, Skolkovo, Skoltech, and others, should channel funds to ensure leadership in this technological agenda.

To be specific, areas where we already have strong import substitution projects include, for example, 5G base stations. We have completed this work, replacing imported equipment, and industrial-scale production of base stations is now underway in the town of Shuya.

However, regarding technological leadership – as specialists note, and I defer to their expertise in this matter, Mr President – we have every opportunity to achieve global leadership in, for instance, unmanned aviation. This agenda requires focused effort. As you know, we are working through the Agency for Strategic Initiatives, the Industrial Development Fund, and other organisations. There is every possibility to consolidate a project for technological leadership.

Within the Presidential Executive Office, I rely on the support of Andrei Fursenko, with whom I am working closely. We have agreed to complete this review by the end of the year and report the results to you.

Vladimir Putin: Mr Shuvalov, we have discussed matters related to technological leadership on multiple occasions. Initially, following the imposition of extensive sanctions, we rightly prioritised import substitution. However, focusing solely on import substitution and so-called reverse engineering will not secure technological leadership.

We require our own developments and production based on domestic platforms. Our current level of technological advancement and economic conditions now permit this.

I therefore ask you to prioritise this when selecting prospective projects for support.

Igor Shuvalov: We will proceed accordingly and fulfil this objective.

Vladimir Putin: Good. Thank you.

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