PRESS: Fin Min bashes extra invest in VEB project financing factory

MOSCOW, Aug 7 (PRIME) -- The Russian Finance Ministry has criticized an idea to launch a project financing factory based on Vnesheconombank (VEB) because of additional expenses and risks for the state budget, business daily Vedomosti reported on Monday, citing three government officials.

The idea was offered by Prime Minister Dmitry Medvedev in February, and President Vladimir Putin ordered the government to elaborate the plan by August 1. If approved, the factory would be launched in 2018.

The Economic Development Ministry suggested that VEB started issuing three bond tranches for each project, with a yield depending on risks. The bank asked for a 79.4 billion ruble additional budget aid annually.

One of the officials told Vedomosti: “We are reluctant at putting bets on one who has barely stood afloat.”

VEB later cut the request for aid to 1 billion rubles a year but the request was cancelled by the Finance Ministry as well.

(60.3281 rubles – U.S. $1)

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