Published: June 18, 2009
Vnesheconombank (VEB), Russia's State Corporation Bank for Development and Foreign Affaris, and the China State Development Bank (CSDB) entered into a credit agreement for an amount of US$310mn on June 14.
Under the agreement, funds being made available to VEB are intended for financing the project to build a cement factory in the city of Slantsy of the Leningrad region. The project provides for setting up a full cycle production of quality cement with a total capacity of 1.86 million tons of cement per year.
The implementation of the project would make it possible to cut down production costs by way of employing unique technological equipment with the use of slate production waste as a raw material. The employed modern cement manufacturing technology provides for resource saving and reduced power consumption as well as for improving the ecological situation in the Slantsevyi district of the Leningrad region. The factory’s construction would help create at least 450 new jobs.
The agreement was signed by VEB chairman Vladimir Dmitriev and CSDB board director Chang Yuan. The project is being implemented by the LSR group which is the largest developer and manufacturer of construction materials in the North-West federal district.
A similar transaction was done between VTB, one of Russia's biggest banks, and CSDB in late May when VTB has started servicing loans extended by CSDB to Russian companies such as Rosneft and JSC Transneft. On May 26, the first tranche of US$400mn was disbursed to Rosneft.
Under multilateral agreements, VTB acts as a settlement agent for the loan and export contracts of the Russian companies.
The total loan to Rosneft is US$15bn. The funds are said to be channeled to develop a Russian-Chinese cooperation in the oil industry under the intergovernmental agreement signed by Igor Sechin, deputy prime minister, and Wang Qishan, vice premier of the state council, in April 2009.
In addition to credit funds, the agreement stipulates long-term oil supplies to China and construction of the Russian part of the pipeline from Skovorodino station tot he borders of China. In accordance with credit documents and purchase agreements with China National Oil Corporation the loans will be repaid through oil revenues.