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- The FEDF Engages the Asian Generations Fund to Invest Over $1 Billion in Agricultural and Gas Chemical Projects in the Russian Far East
The Generations Fund (GenFund), a strategic financial partner of the Far East Development Fund (FEDF), is investing over half of its initial capital comprising $2 billion into two large projects in the Russian Far East. The corresponding agreements have been signed between the GenFund and Russian partners just before the Eastern Economic Forum (EEF) to be held on 11–13 September in Vladivostok.
The GenFund was founded this summer by a pool of Asian investors with the initial capital of $2 billion and the endowment of $20 billion. The fund’s strategy is aimed at investing in international projects under the “One Belt, One Road” initiative. The board of directors and the international expert board of the GenFund include business leaders, famous politicians, and public figures: Irina Bokova (Director-General of UNESCO in 2009–2017), Dominique de Villepin (Prime Minister of France in 2005–2007), Louis Schweitzer (Chairman of Renault from 1992 to 2005), billionaires Spyros Niarchos (Switzerland), Augusto Perfetti (Italy), and Wei Shaojun (China). The FEDF assisted in creating and shaping the GF investment agenda in terms of investment in Russia, having presented promising projects in agriculture, gas chemical industry, real estate, tourism, and mining.
The first transactions of the GenFund executed just before the IVth EEF will include investing $600 million in the projects of Rusagro Group in the Russian Far East and up to $440 million in Stage 2 of the gas chemical project of Nakhodka Fertilizer Plant (NFP) Group.
The GenFund is going to invest up to $600 million in partnership with Rusagro Group that has already been implementing large agricultural projects in the region with the financial support of the FEDF (the largest livestock breeding complex in the Primorsky Territory is being built in the Far Eastern Federal District, the first facilities are to be commissioned within the framework of the Eastern Economic Forum). For the purposes of expanding the project, pork production will be raised to 1 million tonnes at the capacities being constructed both in the Russian Far East and in the north-east regions of China bordering with the Russian Federation. Also, dairy production facilities with a capacity of 1 million tonnes per year will be built up. “Construction of modern integrated joint production facilities in the Russian Far East and in the adjacent north-east regions of the PRC will help launch supplies of Russian meat and dairy products to China, open a huge Asian market for Russian Far Eastern producers,” said Maxim Basov, CEO of Rusagro.
The Generations Fund is going to additionally invest up to $440 million in Stage 2 of the methanol and fertilizer plant construction project in the Primorsky Territory, initiated by NFP CJSC. The enterprise capacity will be about 1.8 million tonnes of methanol (Stage 1) and 1.8 million tonnes of ammonia (Stage 2) per year. It is planned to supply considerable volumes of the enterprise products to major methanol consumers in Asia. The project lenders will include members of a consortium of Russian and international commercial banks.
Alexei Chekunkov, Chief Executive Officer of the FEDF, said, “The FEDF invested its initial capital in priority projects, having provided affordable and long-term financing. Over three years, we have invested over 39 billion roubles in construction of industrial and infrastructure facilities in the Russian Far East. The next stage objective is to exploit the success of the leading companies and to increase the private investment multiplier using the funds we have invested. In order to achieve said objective, we will act as the investment accelerator and strategic partner of large international investors such as the Generations Fund and will shift from the cheap loan model to the model of direct investment and equity holding in the key projects. In addition to the financial resources, the Generations Fund will support the projects with unique expertise of the “dream team” consisting of global business leaders, top government officials and heads of international organisations who became the main members of the board of directors and the international advisory board of the Generations Fund.”