Increasing Russia’s export potential is among the country’s priority objectives that aim to ensure sustainable development of the Russian economy in an adverse external economic context. Vnesheconombank plays a leading part in building a robust system to support national exports. As such, the Bank is using an integrated approach to expand and improve existing mechanisms of support to Russian industrial manufacturers.
To increase national non-commodity exports, primarily high-tech products, we are providing financial and guarantee support to Russian exporters and foreign importers of Russian non-commodity products. In 2014, Vnesheconombank and the Group’s entities were fully involved in projects provided for in documents approved by the Russian Government and in individual resolutions of the Russian Government and relevant ministries, including the roadmap known as ‘On the Support of Access to Foreign Markets and the Support of Exports’. An important outcome of these activities was that Vnesheconombank Group has set up a single centre of competence to provide credit and insurance support to exports by transferring 100% equity less 1 share in Eximbank of Russia to EXIAR.
To achieve the goals of its Development Strategy for 2015–2020, Vnesheconombank will have to face an ambitious task of building up support for Russian non-commodity exports and implementing international business projects. Achieving these goals will considerably enhance our role in increasing the export potential of the Russian economy and making Russian exporters more competitive in global markets.
Key Areas of Export Support by Vnesheconombank in 2014
Project: Supply of Sukhoi Superjet 100 Passenger Aircraft to Mexico
Project initiator: Sukhoi Civil Aircraft
Project goal: support the exports of 20 Sukhoi Superjet 100 passenger aircraft acquired by Mexican airlines Interjet.
As part of the project, Vnesheconombank took part in the financing of supplies of Russian aircraft to Mexico as a member of a consortium of major international banks that comprised Natixis (France), Intesa Sanpaolo SpA (Italy), Deutsche Bank SpA (Italy) and Deutsche Bank AG (Germany). Sukhoi Superjet 100 airliners purchased as part of the project are already actively used by Mexican airlines Interjet for regional flights, including in Alpine conditions for flights to airports of Mexico and Toluca located at altitudes of more than 2 thousand metres. Interjet is planning to acquire another 10 SSJ 100 options in the nearest term.
The mechanism used in the project provides for involvement of a Russian bank as a member of the consortium of international banks in financing of supplies to a third-party country. It is unique for both the Russian and international markets. The project has been positively acclaimed by a wide range of media and received awards from such international editions as Global Transport Finance, Trade & Forfaiting Review and Global Trade Review. This project has marked the emergence of an international aircraft financing centre of competence in Russia.
Improving the Export Support System
Non-Financial Mechanisms of Support to Exports
EXIAR’s Support to Exports
We are coordinating export support operations of the Group’s subsidiaries to deliver the maximum synergy effect chiefly relying on a variety of financial and non-financial tools of support to both run-of-the-mill and the most sophisticated export projects in any non-commodity sectors.
In order to improve the way the Group’s entities interact between each other, the Bank has developed a Procedure for providing Vnesheconombank and its subsidiaries with financial support to supply Russian high-tech products to external markets. The Procedure allows us to examine applications from foreign buyers and Russian exporters within shorter timelines, and to offer competitive interest rates on loans to finance Russian exports, including through insurance support provided by EXIAR.
In 2014, Vnesheconombank continued implementing a range of measures to integrate OECD’s requirements to export support into Vnesheconombank Group’s operations. For this purpose, the Bank approved its Procedure for Organisation of Anticorruption Expert Evaluation of Projects Financially Supported by the Government that captures the OECD Council’s Recommendation on Bribery and Officially Supported Export Credits adopted on 14 December 2006.
Another important area of our work consists of involvement in strategic initiatives aimed at implementing the government policy on export support and foreign economic affairs. In 2014, the Bank was actively engaged in the development of a draft national export strategy of Russia until 2030. In order to facilitate international development and promote the interests of Russia abroad, the Bank has also signed an agreement with the Federal Agency for the Commonwealth of Independent States, Compatriots Living Abroad and International Humanitarian Cooperation.
As a coordinator of comprehensive support to exports of Russian goods, works and services, we provide Russian and foreign market players with comprehensive assistance that includes non-financial mechanisms of support driven by advanced highly efficient approaches to the organisation of business communications.
The 'Financial Support to Russian Exports' system launched in 2014 is a breakthrough tool that ensures remote one-stop shop interaction between exporters, foreign buyers of Russian products and Vnesheconombank Group. The system operates via an Internet portal that can be used by organisations to apply to Vnesheconombank Group for financing. The previously launched exporter information and advisory support service operating through the official website of Vnesheconombank was also continuously operating in 2014.
The key strategic aim of EXIAR is to increase support to exports and maximise access to services of the agency by representatives of various Russian business groups. As a specialised public institution for support to exports, the agency is also fully involved in the development of the public export support system and mechanisms.
EXIAR provides insurance coverage to protect Russian export loans against business and political risks, protect Russian investments abroad against political risks and support export-oriented SMEs. These measures serve to support exports by Russian companies, including exports of high-tech products.
In 2014, the Russian Government authorised EXIAR to provide extended insurance for individual export projects covering up to 100% of the project. The list of recipients of EXIAR’s insurance support are now available not only to Russian exporters, banks and foreign buyers of Russian products, but also to factoring and leasing companies, and international financial organisations. Insurance coverage provided by EXIAR is subject to mandatory measures provided for in EXIAR’s Procedure for Preventing Bribery of Foreign Officials prepared based on OECD Council’s Recommendation on Bribery and Officially Supported Export Credits.
Since July 2014, EXIAR has been applying EXIAR’s Procedure for Due Diligence of the Environmental and Social Impact by Export Loans and Investments based on the OECD Council’s Recommendation on Common Approaches to Officially Supported Export Credits and Environmental and Social Due Diligence. The Procedure provides for screening of transactions submitted to the agency for review to identify the need of a due diligence of environmental and social risks. In 2014, EXIAR ran a due diligence of 15 projects in line with the new procedure.
Project: Altai Flour Mills
Project initiator: Altai Flour Mills
EXIAR’s commitment: USD 3 mn
Project goal: support exports of agricultural products by grain processing companies of the Altai Territory.
The Altai Flour Mills project has been created by major independent grain processing companies of the Altai Territory to promote Russian agricultural products internationally. The company exports grain processing products, including high added-value products.
As part of the project, EXIAR insures exports of Altai Flour Mills company and covers its political risks. The company’s products are supplied on payment deferral terms, including under the UN World Food Programme.
Breakdown of Export Support by EXIAR in 2014 by Sector