Russian govt approves investment project for development of aviation industry with NWF financing of 283.8 bln rubles

MOSCOW. Jan 15 (Interfax) - The Russian government has approved a new investment project to develop the aviation industry with financing from the National Welfare Fund (NWF) totaling more than 280 billion rubles, Prime Minister Mikhail Mishustin said.

"The government has approved a comprehensive program to expand the production of aircraft, engines, instrument and components and authorized the use of the National Welfare Fund for its financing. On a repayable basis it will be possible to raise more than 280 billion rubles for such purposes," Mishustin said at a meeting with deputy prime ministers on Monday.

The project envisages technical re-equipment of enterprises, increase of factory capacities, development work, including creation of new materials and an electronic component base. The implementation of the project should ensure the production of more than 600 fully domestic aircraft by 2030, Mishustin said.

According to the signed order, up to 283.8 billion rubles will be allocated from the National Welfare Fund. To this end, Rostec State Corporation, which unites aviation industry enterprises, will place 15-year bonds at 1.5% per annum (the first two years provide for a grace period on coupon payments).

The investment project is backed by Rostec's business plan, which envisages production of more than 1,800 airplanes by 2040, an Interfax source in the aviation industry said earlier. The state corporation's entire program is estimated at more than 1 trillion rubles (in prices of corresponding years). In addition to the National Wealth Fund, financing is expected to be raised from banks, the federal budget and the aviation industry's own funds.

The order confirms this data. The volume of "domestic and export markets" through 2040 is estimated by the authorities at 1,869 aircraft (including 342 SSJ-NEW, 990 MC-21-310, 190 IL-114-300, 315 Tu-214 and 32 IL-96-300), while the capex required for the investment project is estimated at 1.003 trillion rubles. In particular, bank financing is expected to amount to 380.9 billion rubles, while own funds of the investment project participants (in the amount of amortization formed as part of the implementation) will total 122.8 billion rubles and budget funds will come to 215.6 billion rubles.