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London November 21, 2007

STATE CORPORATION “BANK FOR DEVELOPMENT AND FOREIGN ECONOMIC AFFAIRS (VNESHECONOMBANK)”. Vnesheconombank’s role in the Development of the Transport Infrastructure and Private-Public Partnerships in Russia. London November 21, 2007. KEY MILESTONES IN VNESHECONOMBANK’S DEVELOPMENT.

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London November 21, 2007

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  1. STATE CORPORATION “BANK FOR DEVELOPMENT AND FOREIGN ECONOMIC AFFAIRS (VNESHECONOMBANK)” Vnesheconombank’s role in the Development of the Transport Infrastructure and Private-Public Partnerships in Russia London November 21, 2007

  2. KEY MILESTONES IN VNESHECONOMBANK’S DEVELOPMENT Rating upgrade by Fitch and S&P to BBB. Upgrade to Baa2 by Moody’s. VEB successfully closes its debut US$500 Million Syndicated facility. Federal Law “On Bank for Development” № 82-FZ was signed by the President of the Russian Federation. Appointed as Agent of the Government of the Russian Federation. Predecessor bank, Vneshtorgbank of the USSR founded. Vneshtorgbank of the USSR renamed to Vnesheconombank (VEB). Purchase of 94.6% of Eximbank of Russia. Appointed State Trust Management Company to handle pension savings funds. Rating upgrade to BBB+ by Fitch and S&P. VEB ensures an early repayment of the debut US$500 Million Syndicated facility and enters into a US$800 Million Syndicated facility. • Status of a “State Corporation” • Equity fully owned by the State •Development functions as a key focus •Full range of investment banking services •Supervised by the Government of the Russian Federation

  3. VNESHECONOMBANK’S POSITION IN THE RUSSIAN BANKING SYSTEM (PRIOR TO MAY 17, 2007)

  4. RATINGS * Foreign LT Bank Deposits

  5. FINANCIAL DATA AS OF YEAR-END 2006

  6. ASSETS

  7. KEY ELEMENTS OF THE FEDERAL LAW “ON BANK FOR DEVELOPMENT” 17.05.2007 №82 - FZ According to the Federal Law the new entity was founded on the basis of Vnesheconombank of the USSR – State Corporation “Bank for Development and Foreign Economic Activities (Vnesheconombank)”, followed by a merger with EXIMBANK of Russia and Russian Bank for Development. • • Mission: • To ensure Russian economy growth by means of stimulating investment activity, development of infrastructure, support of innovative technologies and Russian industrial export. • • Goals and targets: • Ensure banking support for federal programmes, commercial projects of national importance, cross-border large scale projects of Russian companies; • Support regional, infrastructure projects and development of high-tech industries; • Enhance Russia’s export capability (especially in the field of export of high-value added goods); • Support of import substituting industries in Russia. • • Focus on: • Infrastructure and innovative projects; • Development of special economic zones; • Russian industrial (non-natural resources) export support; • Financial support for small and medium size enterprises; • Environment protection.

  8. MAIN FOCUS AND CORE ACTIVITIES • •Main focus areas of Vnesheconombank: • Industrial and high-tech products export promotion; • Support of strategic sectors of economy; • Support of regional development; • Development of public-private partnerships. • • Core activities of Vnesheconombank: • Project finance: • National projects; • Infrastructure projects; • Support of Russian companies’ activities abroad; • Large-scale investment projects; • Innovation projects. • Support of national export: • Financing of export projects; • Implementation of state policy for guarantee support; • Insurance of export credits. • SME financing • Financial advisory services: • Expert assessment of investment projects; • Structured and funding solutions advisory.

  9. FINANCIAL MEMORANDUM OF THE BANK FOR DEVELOPMENT FOR 2007-2010 Principles of activities • Absence of competition with commercial financial institutions • Environmental responsibility • Priority is given to the PPP mechanism • Transparency • Project’s recoupment Major areas of investment activities • Removal of infrastructure restrictions impending economic growth • Enhancing the efficiency of natural resources utilization • Support of innovations • Development of SME enterprises • Support of industrial production export

  10. PROJECT SELECTION CRITERIA: • •Compliance with major areas of Vnesheconombank’s investment activities • • Compliance with specified investment areas • • Loan tenors, as a rule, exceed 3 years • Criteria for selection of projects: • • SME financing amount – shall not exceed RUR 150 mln • • SME loan tenors – over 2 years Payback period Over 5 years Total cost of project Over 2 bln. RUR Vnesheconombank participation Over 1 bln. RUR

  11. FINANCIAL MEMORANDUM OF THE BANK FOR DEVELOPMENT FOR 2007-2010 Functions • Expert evaluation of investment projects, advisory services • Extension of loans and other forms of financing • Issuing of guarantees and sureties, including exports guarantees • Participation in charter capital of legal entities • Export credits insurance Range of services extended: • Syndicated loans • Structured finance • Debt finance • Project finance • Equity participation • Advisory services

  12. FINANCIAL MEMORANDUM OF THE BANK FOR DEVELOPMENT FOR 2007-2010 • Priority areas: • Aerospace • Shipbuilding • Electronic and high-tech industry • Nuclear industry, including nuclear energy • Transportation • Power engineering industry • Metallurgy (production of special steels) • Wood processing industry

  13. FORECAST Source: Ministry for economic development and trade by 2010: • Credit portfolio to be increased up to RUB 770 bln (USD 30.9 bln) from RUB 140 bln (USD 5.6 bln) in 2007; • Borrowings from international and domestic capital markets to be increased up to RUB 469 bln (USD 18.8 bln).

  14. VNESHECONOMBANK – A NEW PRIVATE-PUBLIC PARTNERSHIP INSTRUMENT IN THE RUSSIAN FEDERATION • Instruments of cooperation between the State and business in Russia • • Special economic zones; • State Investment Fund; • Concession mechanism; • State institutions for development; • Creation of engineering implementation parks; • Innovation venture funds.

  15. ADVANTAGES OF PPP MECHANISM IMPLEMENTATION IN RUSSIA • Possibility to implement socially important and relevant projects, unattractive for traditional forms of private investments • Increase of efficiency of the projects due to partnership with private business •Decrease of Government risks due to reallocation of project risks to private investors •Possibility to engage best management personnel, technology and engineering • Decrease of the budget burden by means of private investments and partial reallocation of total project costs and expenses of the project operator

  16. ADVANTAGES OF VNESHECONOMBANK IN FACILITATING PPP Extensive experience in cooperation with international, development banks, financial institutions and ECAs Expertise in large-scale investment projects analysis and project finance Administrative leverage (cooperation with federal and regional authorities) Excellent business reputation and credit history • To support PPP mechanisms in Russia Vnesheconombank together with its foreign partners provides consultancy services to investors: • in identifying joint projects that qualify as PPP in the framework of the Concession Law; • in advising the sponsors on various structures of financing of PPP projects; • in developing a bankable funding plan for PPP projects; • in developing a financing and security structure for PPP projects; • in arranging joint financing for PPP projects etc.

  17. AGREEMENTS ON COOPERATION FOR ASSESSMENT AND FURTHER DEVELOPMENT OF LARGE-SCALE INDUSTRIAL AND INFRASTRUCTURE PROJECTS • Key Federal government bodies (Ministry of Transportation of Russia, Federal • Ministry for Industry, Agency for Special Economic Zones) • More than 22 Russian regional authorities (Government of Chechnya, Tatarstan, Bashkortostan, Kabardino-Balkariya and Chuvash Republics; Administrations of Krasnoyarsk, Krasnodar, Irkutsk, Kirov, Kurgan, Orenburg, Sakhalin, Ulyanovsk, Murmansk,Voronezh, Ryazan, Tver, Sverdlovsk, Amur, Stavropol, Novosibirsk and Samara regions)

  18. KEY TRANSPORTION AND INDUSTRIAL INFRASTRUCTURE PROJECTS • Transportation Infrastructure Projects: • Construction of “Western High-Speed Diameter”, St. Petersburg (99,9 bln. RUR / 3.9 bln. USD); • Construction of Moscow-Saint-Petersburg toll road (15-58km), Moscow (54,9bln. RUR / 2,2 bln. USD); • Construction of “Orlovsky tunnel” under Neva river, St. Petersburg (31,7 bln. RUR / 1,3 bln. USD); • Construction of a new connection to the Moscow Ring Road of the M1 Moscow-Minsk Federal Highway, Moscow (17,3bln. RUR / 0,7 bln. USD); • Construction of the Kyzil-Kuragino rail-way for the deveolpment of the Elegestskoe Coal Mine (12 mln. annual production, 1.3 bln. USD) • Construction of Volgo-Baltiysky waterway (North-West region) (8,0 bln. RUR / 0,3 bln. USD); • Construction of transportation infrastructure for natural resources development in the south-east part of Chita region, Chita region (167,7bln. RUR / 6,7 bln. USD). • Industrial Infrastructure Projects: • Development of industrial facilities in the Lower Angara River region (complex of aluminium smelter, hydro-power station, pulp and paper plant, railway and auto roads, bridges), Krasnoyarsk region (213,9bln. RUR / 8,6 bln. USD; • Construction of water supply and delivery system in the city of Rostov, Rostov region (22,1bln. RUR / 0,9 bln. USD.

  19. TRANSPORTATION INFRASTRUCTURE PROJECTS: CONSTRUCTION OF MOSCOW-ST. PETERBURG TOLL ROAD (15-58 KM) • Construction of Moscow-St. Petersburg toll road represents one of the key transportation infrastructure projects in Russia as well as one of the most significant among toll roads worldwide. The first stage of the project – (15-58 KM of the road) is expected to be constructed in 2010 substantially reducing Moscow region’s traffic flows on this direction. • Moscow-St. Petersburg highway is part of the federal M-10 road ”Russia”, Pan-European transport corridor #9 and International transport corridor “North-South”, thus the functioning of the road makes a great impact not only on the transportation infrastructure of the central and northern regions of the country but also Russia’s international trade. • The project is in-line with the Mid-term social and economic development program of Russia, Transport development strategy up to 2010 and “Transport system renovation” target program. • Vnesheconombank’s role in the project: • The Bank has been actively involved in the project since its starting point. One of the functions performed was consulting of the Ministry of transportation of Russia and preparation of an expert opinion for the Ministry; • Currently Vnesheconombank is considering to enter the project by means of financing the winner of the concession tender and/or equity financing.

  20. TRANSPORTATION INFRASTRUCTURE PROJECTS: CONSTRUCTIONOF A NEW CONNECTION TO THE MOSCOW RING ROAD OF THE M1 MOSCOW-MINSK FEDERAL HIGHWAY • The project is entitled to solve current traffic problems in the western part of the Moscow region and is aimed at: • enhancement of transport potential, capacity and transitional efficiency of Moscow region’s part of the Pan-European corridor #2 (Berlin-Minsk-Moscow-N.Novgorod); • development of transportation infrastructure in order to increase population mobility, economy growth, Russia’s interstate and international business and trade relations. • Vnesheconombank’s role in the project: • The Bank pays a significant attention to the realization of the project, including elaboration of an expert opinion for the Ministry of transportation of Russia being its consultant regarding transportation projects in the field of PPP; • Currently Vnesheconombank is considering to provide financing to the winner of the concession tender and/or equity financing.

  21. VNESHECONOMBANK’S MAJOR DEALS IN 2007

  22. VNESHECONOMBANK’S MAJOR DEALS IN 2006-2007

  23. VNESHECONOMBANK’S MAJOR DEALS IN 2006

  24. RECENT EXPERTISE IN TRANSPORTATION INFRASTRUCTURE PROJECTS

  25. CONTACTS Anatoly B. BalloMember of the Executive board – Vice Chairman Tel + 7 (495) 721 98 21 E-mail: Ballo@veb.ru9, Academic Sakharov Ave., Moscow, 107996, Russia

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