Translated material
By export line
Vnesheconombank concluded its second loan agreement with China in a year
Prime Minister Mikhail Fradkov's visit to China was very fruitful for Vnesheconombank. VEB entered into an agreement with the State Development Bank of China to allocate a credit line of $300 million. The heads of VEB, Vladimir Dmitriev, and the State Bank of Russia, Chen Yuan, signed the agreement at the end of last week in Beijing, as part of the tenth meeting of the heads of government of Russia and China. This was the next step to attract financial resources on international markets for long-term lending to Russian enterprises engaged in non-resource exports.As Vremya Novostei was told by Vnesheconombank, the document was signed in furtherance of a quadripartite cooperation agreement, which involves VEB, Roseximbank, the Export Credit Guarantee Corporation of China (Sinosure) and the State Development Bank of China. It was concluded a year ago during Vladimir Putin’s visit to China.
The Russian bank says that the new agreement was a consequence of the successful implementation of projects within the framework of the first credit line for $212 million already allocated to VEB by the GBK (the corresponding agreement was signed in July 2005). The current 300 million will also be used for pre-export financing of the production of high-tech Russian products for delivery to China. Let us recall that VEB is one of the main implementers of the program to support non-resource exports adopted by the Russian government.
It is worth noting that during the visits to China last week by Prime Minister Mikhail Fradkov and Deputy Prime Minister Alexander Zhukov, the parties emphasized the need to develop interbank cooperation between the two countries. Mr. Zhukov, in particular, noted the fundamental importance of such interaction from the point of view of lending and guaranteeing transactions for the production and supply of competitive products: “Without a developed financial support system, it is difficult to count on long-term success.”
Chairman of Vnesheconombank Vladimir Dmitriev told Vremya Novostei that the last two years have really become significant for VEB in terms of “building close working relationships with Chinese banks.” Together with the State Development Bank of China, he said, VEB “has become a pioneer in attracting Chinese financing to support Russian high-tech exports to China.” Mr. Dmitriev said that the previous loan ($212 million), the funds of which were used specifically for these purposes, has already been fully used. “Russian enterprises received fairly cheap borrowed funds on good terms,” says the head of VEB.
Vnesheconombank plans to continue implementing joint projects with Chinese partners. The plans include, in particular, programs for the development of infrastructure in the Far East, in the Krasnoyarsk Territory, a number of which are aimed at exporting electricity and pulp to China. In addition, the State Development Bank of China supported VEB's proposal to participate in joint financing of projects in southern Russia, including Chechnya. During Mr. Fradkov’s visit to China, Vladimir Dmitriev conducted the corresponding negotiations together with the head of the Chechen government, Sergei Abramov. “The projects are proposed by the Chechen Republic. We are talking about housing, road construction, and processing of agricultural products. Chinese partners are also interested in cooperation in the field of telecommunications and the social sphere,” says Mr. Dmitriev. According to him, the State Development Bank of China has accumulated considerable experience in implementing regional investment projects.