Another innovation investment fund to appear in Russia

On the occasion of the German-Russian government consultations in Hannover, the Vnescheconombank (VEB) signed a Memorandum of Understanding with the German  state bank KfW, according to the press service of the VEB. The document provides for the creation of a new Entrepreneurship Support Fund to extend the scope of available tool to finance support small and medium-size enterprises in Russia by attracting long-term international investments.

An independent feasibility study is going to be conducted to become the cornerstone of a package of documents to set the fund up. The fund’s gross volume will amount  EUR 1 bln. It is to be formed during the next 2-3 years.

According to  Vladimir Dmitriev, Chairman of Vneshecononombank, quoted in the press-release of KFW, such a fund helps secure access for small to medium-sized enterprises to medium and long-term sources of finance.

Ulrich Schröder, Chief Executive Officer of KfW Bankengruppe said that KfW can draw on its extensive experience in innovation financing, and a strong Russian SME sector is of great importance for German exports.

KfW has been supporting innovation business in Russia for many years. The bank supports its partners through targeted advisory measures (in legislation, management training, SME promotion and financial system development) and refinancing programmes.  

Vneshecononombank and KFW concluded an agreement in 2009 to stipulate a refinancing scheme for Russian banks that finance SME in the amount of EUR 200 million and approved a refinancing programme for SME modernisation and innovation activities in the amount of EUR 100 million.