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President of Russia Vladimir Putin: Mr Dmitriev, let’s discuss work in 2013 on your main projects and on the big programme that you carried out as part of the preparations for the Winter Olympics. Please, go ahead.

Chairman of Vnesheconombank Vladimir Dmitriev: Thank you, Mr President.

The Olympics became a national project for us, as indeed for the whole country. We have invested considerable amounts of money in a good number of projects over these last few years.

Our overall loan portfolio for the Olympics is close to 240 billion rubles [$6.8 billion]. These are major projects that include hotel complexes, facilities for the Olympic Committee, and sports facilities too of course.

Vladimir Putin: You are referring to loans to commercial organisations for carrying out particular projects, money that you are lending and that will be repaid, in other words?

Vladimir Dmitriev: Yes, of course.

We understand that these are complicated projects, including hotels say, buildings that will be ultimately sold on a market basis. We know that we cannot expect for these projects to pay off within 2–3 years of course.

This was why we established an inter-agency commission headed by Deputy Prime Minister Dmitry Kozak, in order to settle together issues regarding the facilities’ future fate and the repayment of the loans we extended. We are seeing a very constructive attitude on the part of investors and the federal and regional authorities.

We decided to introduce a two-year moratorium on servicing the loans because we think that by the end of this year, the fate of the projects and facilities built with Vnesheconombank’s support will be more or less clear.

We are taking a totally calm and sober view of the situation and understand that we must work together with the investors to find solutions. We see that the situation is under control. We are meeting regularly with the investors, the relevant ministries, and the regional authorities in order to ensure maximum use of the facilities built with Vnesheconombank’s support. They include hotels, administrative buildings and sports facilities.

Vladimir Putin: And the bank’s main projects?

Vladimir Dmitriev: As far as our work to support exports is concerned, Vnesheconombank sees last year as a milestone in that our comprehensive system for supporting industrial exports began working in full.

This makes use of all of the instruments the Vnesheconombank group has at its disposal. They include the bank itself, Russia’s Eximbank, Export Insurance Agency of Russia (EXIAR), and VEB-Leasing, our leasing company.

This mechanism is working particularly well now in financing foreign purchases of Russian high-tech products such as the Sukhoi Superjet-100. We have already approved the necessary corporate decisions concerning delivery of the first 11 planes to Indonesia and Mexico. All of the organisations that I just mentioned are involved in these deals.

The important thing to note here is that aside from everything else, the delivery of Sukhoi Superjet-100 planes to Mexico is being carried out with the support of foreign insurance agencies, above all the companies Coface and SACE. All of the planes made for foreign customers have received the necessary support from Vnesheconombank. Our interest rate subsidy is also working.

Vladimir Putin: How does this work?

Vladimir Dmitriev: It brings down interest rates in order to make them competitive compared to other financial institutions, foreign institutions that are also ready to finance these projects.

Vladimir Putin: So what is the interest rate on this loan?

Vladimir Dmitriev: It is a market rate of 5.5 percent, depending of course on the buyer’s risk, because the system applies to loans made to buyers of Russian industrial goods. 

Vladimir Putin: The loans are in foreign currency?

Vladimir Dmitriev: Yes. In this particular case, we are talking about Indonesia and the Mexican company that are buying our planes.

Vladimir Putin: So, this is essentially support for Russian industry.

Vladimir Dmitriev: Yes, this is without question.

I want to add that the 120 billion rubles that Vnesheconombank made available for financing foreign purchasers and as performance guarantees (tender guarantees, advance payment guarantees) made it possible to ensure Russian exports worth 660 billion rubles. In other words, the effect is considerable.

There is also the insurance cover that Export Insurance Agency of Russia provides, and this has made it possible to ensure Russian industrial exports worth around 70 billion rubles. These are substantial figures and they have been growing over the last 18 months since we launched the export support programme.

Vladimir Putin: Mr Dmitriyev, we should not forget that Vnesheconombank was established as a development bank, and that should be its primary function, not to act as a commercial bank, but to be a development institution. Supporting all of this work should be the central focus of the bank’s work.

Vladimir Dmitriev: Yes, this is our position too.

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