VEB sees pension funds, Chinese banks as possible source of money for investment projects in Russia
VLADIVOSTOK. Sept 5 (Interfax) - VEB sees Russian pension funds and Chinese banks as potential additional sources of financing for investment projects in Russia, the deputy chairman of the state development corporation, Yury Korsun said.
"How do we see future sources? Firstly, we believe that the [project financing] 'factory' is not going anywhere. It will support a certain number of projects. That in itself is already trillions of investment," he said at a session of the Eastern Economic Forum.
"We, frankly, believe that soon it will really be possible to raise money, for example from Chinese banks. Not just raise money, but specifically raise money in conjunction with the fact that a significant number of contract organizations now are Chinese organizations, these are Chinese contractors, purchase of Chinese equipment and so on. And when there is such a link, then it actually makes complete sense to talk about accompanying financing," Korsun said.
Another potential source, the use of which VEB has been discussing for some time already, is pension money.
"We're very seriously thinking about how to get long money from pension funds to projects. At this point, there's no easy solution here, because the main question is how to ensure, let's say, the security of these pension savings in terms of risks. This is not that easy a challenge. But this is the source that genuinely has long money. And this is the source that can provide long money at a fixed rate. In other words, it does not require any additional instruments," Korsun said.
"After all, we see some participation of pension funds in linear infrastructure projects, for example. It's there. Why can't it be, say, applied to all other infrastructure projects - ports, airports or oil and gas infrastructure? This is a big, serious question. But, as I said, the main difficulty is ensuring the risk/quality needed for pension funds," he said.
Korsun also drew attention in his talk to the problem of risk concentration in large, capital-intensive projects that commercial banks face.
"Another problem arises, it turns out. We didn't notice it that much, but our banker colleagues started identifying it. I won't venture now to confirm figures and the accuracy of calculations, but one banker recently told me that Gazprom's biggest project by amount of investment exceeds the N6 statutory ratio [that restricts maximum risk per borrower or group of affiliated borrowers] for the whole banking system," he said.
"Then the question arises of risk concentration and, in general, how the banking system should serve these huge capital-intensive projects. And this is a kind of debate that commercial banks have now put before us. There are also certain solutions there, but this is a corner that we've never discussed at all before," Korsun said.
