November 20, 2018, 23:22 / Economy Exclusively by subscription

The State Duma gave VEB a new name

And a new financing mechanism for 300 billion rubles Anna Kholyavko To achieve the goals of the May presidential decree, it is necessary to combine all command capabilities and financial resources, explained Shuvalov / Maxim Stulov / Vedomosti

The government bill expanding the powers and financing of VEB was approved by the State Duma in the second, key reading. The state corporation itself will change its name to the National Development Institute “ VEB.RF ”.

One of the key amendments is the additional capitalization of VEB through the mechanism of subscribed capital: it will not be given hard cash all at once, but as the need for investment resources arises. In addition to VEB, subscribed capital was promised to the Russian Export Center (REC) and the Corporation for the Development of Small and Medium Enterprises ( SMEs ). The preliminary amount approved for VEB is 300 billion rubles to create a loan portfolio of 3 trillion rubles.

The government approves this amount in case new projects selected by VEB require additional reserves, Deputy Finance Minister Andrei Ivanov said earlier (quoted by Interfax). It is necessary to allocate resources to implement the May presidential decrees and national projects without attracting additional budgetary allocations, a representative of the Ministry of Finance explains the purpose of the amendments. This is how “development banks operate in many countries of the world,” said VEB Chairman Igor Shuvalov. The additional capitalization of the other two corporations is not yet known; the amount is not specified in the bill. VEB itself will receive another 600 billion rubles by 2024. in the form of subsidies to repay external debt.

What does VEB need besides money?

Igor Shuvalov will have to face the same problems at VEB that he himself could not solve as Deputy Prime Minister

The subscribed capital mechanism clearly formalizes the government’s obligations to the development institution and is a guarantee for investors, says Expert RA analyst Stanislav Volkov: “It is important that the lag between the emergence of a need and the provision of money does not exceed a year - otherwise investors will not trust such promises.” But the state should not get carried away with this mechanism - the development institution will certainly apply for this money, and there will be plenty of other people who want it, he warns.

In addition to money, VEB also receives new functions - coordination and organization of the activities of all development institutions. To do this, the bank will participate in their management, enter into agreements with them, provide them with financial and guarantee support, receive assistance from the state and distribute it between them. The government will determine which development institutions and how they will help. To achieve the goals of the May presidential decree, it is necessary to combine all command capabilities and financial resources, Shuvalov explained (quoted by Prime). It is necessary to build support for projects through the joint work of development institutions - VEB, REC and the SME Corporation, notes a representative of the Ministry of Finance.

Earlier on the topic: Shuvalov achieved 900 billion rubles for VEB

The government plans to inject an additional 8 trillion rubles into the economy over six years, financing projects in the fields of healthcare, education, demography and social policy, the development of non-resource exports and infrastructure. And in order to reduce the misuse and ineffective use of these funds, a structure was required that would control the money at the stage of its distribution, says Vladimir Tikhomirov, chief economist at BCS Global Markets. The decision to give this to Shuvalov is political, but logical, he says, he has extensive experience in controlling and distributing budget money. It is unlikely that other departments have proven mechanisms and political weight for such control, Tikhomirov concludes.