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"The opportunities of the Far East for growth are unique"

"The opportunities of the Far East for growth are unique"

What is easier to find in Russia: attractive projects or investors for them? Why is serious global competition behind the interest of sovereign funds and what is more important than money in partnership with them? The general director of the Russian Direct Investment Fund Kirill Dmitriev spoke about this, as well as about specific projects and prospects for work in the Far East in an interview with

- Why did the Far East attract the attention of the Russian Direct Investment Fund?

- For the development of Russia, economic growth is necessary, and one of the key components of sustainable economic growth is investment. The Russian Direct Investment Fund is intended to be a catalyst for attracting foreign direct investment, personnel, and technology to the Russian economy by making profitable investments with foreign partners.

We also share the thesis that the main potential for economic growth in the country is in the regions, but it is unevenly distributed. The possibilities of Transbaikalia and the Far East are unique in this regard. That is why a representative office of the RDIF is open in Vladivostok in the summer of 2013, currently it is the only regional office of the foundation.

- What exactly is attractive territory of the Russian Far East?

“Firstly, these are export-oriented industries with a focus on the fast-growing markets of the Asia-Pacific region. For clarity, I will give an example: in the hour of summer, about 400 million people live from Vladivostok - an order of magnitude more than at the same distance from Moscow. 

Secondly, infrastructure investment. For example, through the Russian-Chinese Investment Fund (RCFR, the RDIF was established together with the China Investment Corporation) we will build a railway bridge across the Amur - the first bridge between Russia and China. It will increase exports from several regions of Russia.

Third, investment in the extraction of minerals and other raw materials that will be in demand for the growth of Asian economies. We see many projects in the mining industry: the Natalka, Udokanskoye, Baimskoye fields. Do not be afraid to attract partners for investment in resources: the development of the resource base for supplies to the countries of the Asia-Pacific region allowed Australia to move from 16 to 6 in the OECD countries in terms of GDP per capita over 10 years.

- How successfully is potential interest transformed into real deals?

- With partners, we have already invested about $ 700 million in the region, in the plans for 2014 year - more than $ 1,2 billion. Here it is possible to focus specifically on profitable projects.

This is a significant value for our portfolio. To date, RFPI has invested and approved for this purpose funds totaling more than $ 5 billion. Of these, more than $ 1 billion is the investment of the fund itself, the rest is the co-investment of our international partners.

We have attracted more than $ 12 billion in long-term platforms and partnerships with the world's leading sovereign funds for investing in Russia. Most of them are also interested in working in the region. These are, first of all, Chinese, Korean and Japanese sovereign funds.

The Russian-Chinese investment fund actively continues to search for unique opportunities in Russia. Now the foundation is not only preparing for the construction of a bridge over the Amur (which will further strengthen its close ties with Chinese partners), but has already announced new projects in the field of logistics, as well as tourism and infrastructure for the care of the elderly. Soon, the total investment volume of RCIF will be $ 1 billion.

- What is a priority for an investor today when choosing a region for project development?

- Much depends on the category of the investor and his specific needs. However, there is a certain set of parameters that almost all investors pay attention to. In order to make this information clear and accessible, we have recently launched the Invest in Russia portal - INVEST IN RUSSIA.

The portal contains various sectoral, country and regional statistical and analytical data and helps to establish effective interaction between regions, regional agencies, entrepreneurs and investors. The site allows investors to familiarize themselves with the base of available sites for the production location, and also includes presentations on the investment attractiveness of the regions.

The portal is unique not only in the content of the information provided, but also in the form of submissions, in the form in which it is accepted in international practice, and its interactive capabilities make it possible to compare regions and sites according to selected criteria.

The information presented on the portal is useful for the regions themselves. INVEST IN RUSSIA allows regional authorities and development institutions to exchange successful experience with investors and adopt best practices from leading actors in the field of attracting investments. The resource also contains detailed information on the success stories of numerous foreign investors conducting business in Russia. Regions and sites can compare themselves with each other.

- What in the near future can we expect news from RFPI related to the Far East?

- Of the ten pilot regions already disclosing information to INVEST IN RUSSIA, half of them represent the Far East - the Amur Region and the EAO, Khabarovsk, Kamchatka and Primorsky Krai.

The portal INVEST IN RUSSIA presents some of the projects on which the RDIF is working. But there are projects that do not meet the criteria of the fund (for example, in terms of investment or profitability), but they may well be interesting for other investors.

In the Far East, with the participation of RFPI and the National Welfare Fund, the Rostelecom project will be implemented to eliminate digital disparities in remote settlements. It is important that the implementation of this significant for the country project begins precisely in the Far East.

A number of infrastructure projects will also be implemented in the region, in some of them the RDIF intends to take part. As an example - investments in a number of regional airports.

- What is more difficult today - finding a good project or looking for funding opportunities?

- Today there is a unique situation in the world. Tens of trillions of dollars of “long” money, frightened by instability in financial markets, are looking for a use. Including in the sector of direct investments.

Russia has every chance of being successful in competing for these resources. Confirmation of this - organized by the RFPI in May 2014, a meeting of investors with Russian President V.V. Putin at the St. Petersburg International Economic Forum. It was attended by representatives of leading investors, under management of which is more than $ 3,6 trillion.

At the same time, to transform this interest into real deals, investors who actively draw not always reliable information from the press should be informed about the opportunities and the state of affairs in Russia. We expect that the resource INVEST IN RUSSIA will greatly help in this.

RDIF is currently considering more than 60 projects with a total investment of over $ 12 billion. The set of industries is wide: telecommunications, transport and transport logistics, chemical industry, health care, infrastructure, retail, agriculture, utilities, high value-added resources and others . The common thing in these projects is the same: we are interested in companies that are focused on growth and increasing efficiency through investments. But the number of attractive and properly structured for investors projects in the country really need to increase.

- When do you expect tangible effect from the work of the foundation?

"The influx of foreign direct investment into Russia, including through our efforts, grew to $ 94 billion last year, the country reached the 3 place in the world in this indicator, as UNCTAD estimates.

The fact that investments can be profitable, confirm our transactions. The sale of a part of the Moscow stock exchange brought the return to 21%, Rostelecom - in 39%. With the help of the fund, our co-investors invested $ 5 billion in Russian assets, but without funding from RFPI.

According to our mandate, we are focused on large projects. But after large projects and big business, activity in other segments also grows. Therefore, the main thing is to keep moving forward.

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