Mishustin signs decree allowing NWF funds to be placed in subordinated bank deposits for high-speed rail
MOSCOW. March 17 (Interfax) - The Russian government has amended the rules for managing the National Wealth Fund (NWF) to allow the placement of funds in subordinated deposits in banks for constructing the high-speed railway (HSR) between Moscow and St. Petersburg.
The corresponding decree was signed by Prime Minister Mikhail Mishustin on March 11 and was published on the official portal of legal information on Friday.
The document provides for the possibility of placing NWF funds in subordinated deposits in banks based on separate government decisions. Such banks will no longer be required to have experience financing at least 10 investment projects over the past three years, each worth at least 3 billion rubles. The placement currency is limited to rubles, while previous placement in a number of foreign currencies, including dollars, euros, pounds sterling and yen, was allowed. The placement of funds for financing infrastructure projects can occur through the acquisition of securities of Russian issuers (project initiators) or by providing them with loans.
The obligation for banks to report monthly to the Finance Ministry and the Economic Development Ministry on the allocation of funds for project financing and the use of funds not yet allocated has been removed. The condition for exchanging subordinated deposits for banks' ordinary shares in cases provided for by the methodology for determining the amount of their own funds to include subordinated deposits in additional capital sources has also been excluded.
The yield and other essential terms for placing NWF funds in subordinated deposits, as well as the conditions for interest accrual and repayment, will be established by separate government decisions.
The maximum term for placing funds in subordinated bank deposits has been reduced from 30 to 25 years. The restriction on placing NWF funds in subordinated deposits in banks in an amount not exceeding 10% of the fund's total has also been lifted.
The State Duma approved a law in December 2024 reintroducing a provision into the Budget Code allowing for the placement of NWF funds in subordinated deposits in Russian banks to finance self-sustaining infrastructure projects from the government list. This opportunity is provided temporarily, only for this year, and essentially only for one project - the Moscow-St. Petersburg HSR, Deputy Finance Minister Vladimir Kolychev said earlier this week.
"We are currently preparing all by-laws and regulations to make this possible [placing NWF funds for the HSR in subordinated deposits]. The relevant decisions have already been submitted to the government. Once they are adopted, such an opportunity will essentially arise," Kolychev said. Almost all banks participating in the syndicate for financing the HSR project are interested in attracting subordinated deposits from the NWF, he said.
VTB plans to attract a deposit of 93 billion rubles in March-April, which will allow it to increase its capital adequacy by 0.4 percentage points, VTB First Deputy Chairman Dmitry Pyanov told reporters on Thursday. The rate on the subordinated deposit will be 1% from the moment funds are invested in the project.
Banks announced the financial closure of Russia's largest concession project at the end of December. Sberbank said that agreements had been signed to attract financing for the project totaling 1.788 trillion rubles. It did not disclose the volume of its own participation in the syndicate. VTB said that it plans to provide more than 400 billion rubles.
According to the reporting of the HSR Two Capitals company, which is acting as the concessionaire for the project, the syndicated loan agreement was concluded with Sberbank, VTB, Gazprombank and Sovcombank . The obligations under the agreement will be repaid between 2029 and 2045, with the interest rate on the loan set at the key rate plus 3 percentage points.
It is planned that 300 billion rubles from the NWF will be allocated for this project in 2025, Finance Minister Anton Siluanov said.
The construction of the high-speed railway between Moscow and St. Petersburg is provided for in Russia's transport strategy until 2030, with a forecast until 2035. The Moscow-St. Petersburg HSR will pass through six Russian federal subjects - the federal cities of Moscow and St. Petersburg and the Leningrad, Novgorod, Tver and Moscow regions.
