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Putin to chair conf Wed on use of FNB resources for new infrastructure projects

November 06, 2013, 1:13 UTC+3
Participants in the conference are expected to discuss possibilities for the use of the FNB resources for new infrastructure projects
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MOSCOW, November 6 (Itar-Tass) - President Vladimir Putin on Wednesday will chair a conference over the use of the National Wealth Fund /FNB/, the Kremlin press service told Itar-Tass on Tuesday.

Participants in the conference are expected to discuss possibilities for the use of the FNB resources for new infrastructure projects. A month ago, Putin said a decision to this effect had been already taaken. Specifically, the Ministry of Economic Development considers it possible to direct 1.2 trillion roubles (about 40 percent of FNB resources) for implementing infrastructure projects. At present, 460 billion roubles out of the sum are beinga lready invested in projects to upgrade TransSib and BAM railways, to build a Central automobile ring-road and a Moscow-Kazan high-speed railway line. However, the financing of these projects in the 2015-2016 period will require more than was earmarked for these purposes for those years, government analysts believe.

The Ministry also mulls over supporting hi-tech projects by means of FNB resources, those in shipbuilding, aircraft construction, space research, the production of composite materials, and in a number of other fields. Those projects, with a payback period from 7-8 to 12-15 years, are characterized by lesser risks than inputs into large-scale infrastructure projects. Economic Development Minister Alexei Ulyukayev saidn, in particular, that the authorities consider the possibiliy to investing FNB resources in the development of the Moscow air transportation hub.

Meanwhile, the Audit Chamber (AC) considers it necessary to raise the effectiveness of the management of FNB resources. The AC points out that in the2014-2016 period the mean weighted rate of interest on the placement of Reserve Fund and FNB resources at foreign-exchange accounys at the Bank of Russia are forecasted to be 0.58 percent at annum as against 1.8 and 0.74 percent in 2011 and 2012, respectively. "It is essential to raise the effectiveness of the management of the resources of the Reserve Fund and FNB by increasing the profitability of the placement of resources and minimizing interest and foreign-exchange risks for the Federal budget," AC analysts maintain.

Prime Minister Dmitry Medvedev, presidential aide Andrei Belousov, First Deputy Prime Minister Igor Shuvalov, ministers of the economic segment of the RF government, and members of the banking community will also participate in the President-chaired conference.

The National Wealth Fund is part of the federal budget subject to separate accounting, and can be used to co-fund pensioners' savings and balancing the Pension Fund budget. As of November 1, the FNB was worth 2.845 trillion roubles. Up to 40 percent of the FNB's money can be invested into various projects.

As of now, Vnesheconombank has allocated 670 billion roubles worth of FNB funds. Also, a decision has been made to allocate 300 billion roubles for large infrastructure projects which brings the Fund's investment to approximately one-third (34 percent) of its value.

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