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Alexei Chekunkov: "Most of our projects are focused on exporting products to Asia"

Director General of the Development Fund of the Far East told EastRussia about current projects

In an interview with EastRussia magazine, the head of the Fund for the Development of the Far East and the Baikal Region, Alexei Chekunkov, spoke about the international investment agenda that is being formed in the Far East with the participation of this state development institution, as well as about new formats of interaction with investors from Asia and promising areas of cross-border cooperation. 

Alexei Chekunkov: "Most of our projects are focused on exporting products to Asia"
- Aleksei Olegovich, this year it was announced that the Russian-Japanese investment platform in the Far East has been launched. Is it designed to implement specific projects?
- The platform is a joint venture and established by the FRG in partnership with the Japan Bank for International Cooperation (JBIC). He enjoys the full support of this financial institution. Japanese colleagues have a successful experience in a similar format in India. Established with the participation of JBIC Corporation for the development of the industrial corridor "Delhi-Mumbai" today implements investment projects worth ten billion dollars - mainly with the involvement of Japanese capital. We tried to apply this model in the Far East. The platform is a "one window" for all Japanese companies interested in implementing projects in the region in the territories of advanced development and the Free Port, helps investors in solving various issues and, if necessary, provides support at the state level. Several first deals have already been signed. And one of the Russian-Japanese projects that accompanies the platform, was recently recognized by the government as a priority for financing from the funds of the FRDF. This is the construction of the first in Yakutia year-round hothouse complex with the use of Japanese technologies that allow to cultivate vegetables in a closed ground even in conditions of extreme temperatures typical for this region. This is a relatively small but important model project with a synergistic effect. The Japanese partners have serious intentions: over the next five years, with the support of the platform, it is planned to implement more than thirty projects in the Far East and attract investments to them to 85 billion.

- Do you plan to create similar platforms to support Chinese or Korean investors?
- We cooperate with Korean companies interested in implementing projects in the Far East in the framework of partnership with the Export-Import Bank of Korea (KEXIM). As for Chinese investors, we focus on cooperation with special multi-country thematic funds of direct investment, which are created in China. This is a new approach by the Chinese partners to how to invest in projects around the world, including in Russia, as part of the global One-Way-One-Way initiative, which plays an important role for Russian-Chinese relations and, at the same time, motivates many Chinese investors - both private and public - to adjust their investment plans, or even formulate them in a new way. Our future is in attracting such special private equity funds to projects in the Far East. The FRDF participates in the formation of the investment agenda of the Generation Fund, founded by several large Chinese investors with a starting capital of two billion dollars. Soon we will announce the first deals in the Far East with his participation.

- In what sectors?
- We presented to the Generations Fund a number of promising projects in the fields of agriculture, gas chemistry, real estate and tourism, mining. Speaking about sectoral priorities in general, these are all projects that allow us to unite the Far East with the economy of the Asia-Pacific region. The Generations Fund can become a significant investor in the development of the urban environment, production of agricultural products and food, IT and services in the foreseeable future.

- How strong is the export component in projects that are already financed from the funds of the FRDF?
- Such projects focused on the export of products produced in the Far East to Asia constitute a large part of our investment portfolio. For example, we invested in the Kolmar Group project. It is a company that develops coal mining in the south of Yakutia and supplies the world's best coking coals to Asia, which were developed by Japanese investors at the end of the 70-ies. The entire Japanese steel industry operates on these high quality Yakut coals. Now Colmar mines 4 million tons of coal in a coal mine built from scratch. With our help, the production volumes will be brought up to 20 million tons. A significant part of this volume will be exported. To this end, Colmar is building a new port in the Khabarovsk Territory. In parallel, the state invests huge money in expanding the capacity of the railway mains - BAM and Transsib. Additional bandwidth will allow expanding existing narrow bottlenecks in logistics. In three years, Russia will have a modernized infrastructure for exporting tens of millions of tons of cargo.

The FRDF finances several large agricultural projects. This is one of the most promising areas for international cooperation. In the Far East 3 million hectares of ecologically flawless land. Hand to submit up to 2 billion consumers in Asia, who need not just the products of agriculture, but in environmentally friendly products. FRDV invested 5 billion rubles in the Far Eastern project of Rusagro, one of the leading Russian agro-industrial companies. We are building one of the largest pig complexes in Primorye: the first objects are put into operation in September. Another project supported by the FRDV is the construction of a plant for deep processing of soybean in the Amur Region. In this region today is produced about 1 million tons of soybeans a year, but so far the processing is poorly developed. We will help the business solve this problem and build new production capacities, win the Asian markets.

- But first you have to open these markets.
- You know, international trade is a complex chess board. For example, the same China pays great attention to the problem of biological safety. But it's enough to look at the map to understand - the Far East is a natural-isolated environment ideally suited for the production of safe agricultural products. In Russia, the problem of food security is solved thanks to strong measures to support business from the state, a competent policy of subsidizing agricultural production. I have no doubt that all the existing barriers to free trade between our countries are temporary and will soon be eliminated. As soon as the Asian markets open, the companies that we support today will be the first to be there with their products manufactured at modern production facilities.

In addition, we are the investor of the first cross-border railway transition Russia-China. This bridge will significantly reduce the logistics costs when transporting goods from the Russian Far East to the northeast of China.

- Last year, VEF announced the participation of the FRDF in the complex development of the Russky Island. How is this project going?
- The tourist potential of the Far East is very important. To implement it, entrepreneurs and businesses are needed who understand their markets and know how to do it. We attracted a consortium of Asian investors, which plans to create on the island of Russian sanatorium-and-spa cluster. Today, China's healthcare market is 700 billion dollars and should increase ten years to 2 trillion dollars. Many Asian countries are faced with the problem of population aging, which is relevant even for mature economies. The Far East, in this sense, has undeniable competitive advantages from the point of view of ecology and quality of the natural environment in comparison with many projects already implemented in Asia. At the same time from Vladivostok to Beijing - in 2,5 hours of air travel. Even less to Seoul and Tokyo. The Russian Island is a unique territory in its location and natural features and is ideal for the implementation of a modern multifunctional cluster. It is connected to the mainland of Vladivostok by a cable bridge, which is included in the top 10 sights of Russia. A modern oceanarium, one of the largest university campuses in the country, is built here. In just a few years, an important infrastructural reserve was created. The next step will be the comprehensive development of this unique territory with the creation of new world-class projects.
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