The establishment of a project financing “factory” became the key topic at the brain storm “Project Finance - To be or not to be?” at the Krasnoyarsk Economic Forum. The discussion was attended by the Minister of Economic Development of the Russian Federation Maksim Oreshkin and First Deputy Chairman of Vnesheconombank - Member of the Board Dmitry Kurdyukov.
VEB is establishing a centre for sectoral and technological expertise based on the new unit “Sectoral Business Solutions”. Its task is evaluation of business models and provisional assessment of projects. The centre for project structuring and maintenance will be created in the corporate investment unit, and its task is the comprehensive examination of projects, structuring, including syndications, consummation of the transaction and subsequent project support during its entire life cycle.
“The new structure of VEB’s business unit serves to ensure high-quality expert examination of projects, transaction structuring and further project support. For time optimization the Bank is introducing a new investment process regulating the procedures of individual stages of the expert examination, the scope of analysis, the functions of the responsible units, and the new (for VEB) support tools - control of the critical path of the project and predictive analytics,” Dmitry Kurdyukov noted.
It is planned that the project financing structure from the part of VEB for the “Factory” will include equity financing (up to 20% of the total investment costs). VEB will consider possible participation of up to 30% of the authorized capital.
“The task of VEB is to create the basic structure of the syndicate. Tranching is what will attract more investors and ultimately help realize the project,” noted Maksim Oreshkin.
“When structuring the procurement of borrowed funds, possible syndication can account for 80% of the total investments for the project,” Dmitry Kurdyukov added.