Bank ZENIT has joined Vnesheconombank’s Project Financing Factory. This mechanism is designed to finance projects under syndicated loan agreements. Under the cooperation agreement, Vnesheconombank (as the Factory’s operator and syndicate arranger) and the commercial bank will search for and review investment projects and decide on financing for such projects by using the Factory’s resources.
The signing ceremony was hosted by Vnesheconombank. The document was signed on behalf of Vnesheconombank by its First Deputy Chairman and Member of the Board Dmitry Kurdyukov and on behalf of Bank ZENIT by its First Deputy Chairman of the Management Board Andrey Dobrynin.
“The Factory’s main idea is to provide syndicated loans for projects with government subsidies and government-backed bonds. The syndication mechanism will allow Vnesheconombank to additionally get 3 or 4 roubles for the country’s economy in exchange for every rouble of its investment. I am confident that our intense efforts in syndicated lending will additionally boost support for the Russian economy. Pilot projects in the pipeline are related to medicine (medical equipment), infrastructure and chemistry. We also see the Factory’s considerable potential for project implementation in all industries that are Vnesheconombank’s priorities,” Dmitry Kurdyukov said.
“Public-private partnerships have used different lending mechanisms for years and found them to be generally effective. Vnesheconombank’s new Project Financing Factory is, however, intended to deal with a critical issue of providing targeted support for the economic sectors that can produce a multiplying effect and offer higher value-added goods and services,” Andrey Dobrynin said. “Bank ZENIT views participation in this project as a step in pursuing our new strategy of extensively using corporate lending in high-priority industries.”
The parties agreed to organise communication between them to review investment projects and decide on financing for such projects by using the Project Financing Factory’s resources under syndicated loan agreements. They will also cooperate in encouraging the government and regions to provide support for Vnesheconombank Group’s potential projects.
To prepare and carry out investment projects, the Project Financing Factory’s participants intend to involve expert organisations in project evaluation. Particular attention will be given to monitoring and following up project implementation.
The agreement specifies that the participating bank will prepare project documents, assist Vnesheconombank with pre-project evaluation and due diligence assessment, provide Vnesheconombank with informational and analytical support and expert advice and make available to Vnesheconombank all expert findings and project information.
Vnesheconombank will inform the participating bank of how to submit (send) documents and information to Vnesheconombank about proposed investment projects. Vnesheconombank will also ensure the use of Russian and foreign best practices for project evaluation and, if necessary, involve Vnesheconombank Group’s entities in project feasibility assessment.
The initial cooperation agreements to finance the Project Financing Factory’s projects were signed between Vnesheconombank and the participating banks during the Russian Investment Forum in Sochi. The participants include Sberbank, VTB Bank, Gazprombank, the Eurasian Development Bank, the Russian Regional Development Bank, Sovcombank and the International Investment Bank.