is an investment project finance mechanism implemented in Russia. The mechanism allows borrowers to obtain funding under syndicated loan agreements with governmental support. The Factory was created following Decree of the Government of the Russian Federation No.158 dated 15.02.2018 on the program «Factory of project financing».
The key objectives of the Project Finance Factory are as follows:
1) ensure economic growth through implementation of new projects in various economy sectors;
2) improve the accessibility of project financing in Russia;
3) increase the credit volumes for the companies which implement various investment projects.
The structure of the Project Finance Factory is presented below.
The Project finance factory selects projects to be implemented in Russia worth at least RUB 3 bln with the payback period of up to 20 years, provided that at least 20% of the project value will be financed by the borrower and the remaining 80% will be financed by the borrowings raised through syndicated loans.
The syndicated loan used to provide borrowing may include tranches A, B and C. Tranches A and B are mandatory. In the framework of tranche A, the financing may be granted by the SPV or VEB. In the framework of tranche B, financing shall be granted by VEB and commercial banks included into the syndicate. Tranche C also provides for financing by VEB and banks; it is a reserve tranche which shall be used to finance costs associated with payment of interest on the loan and additional costs in case the project value increases.
As of the current date, more than 10 syndicated loan transactions were executed in the framework of Project Finance Factory in various sectors of economy:
1) mining industry (e.g., Baikal Mining Company, 07.2019
, Siberia-Polymetall, 12.2020
2) chemical and petrochemical industry (Shchekinoazot, 02.2019
3) transportation (PortVanino, 07.2019
4) construction and development (e.g., Sukhodol, 07.2020
5) IT and high tech (Operator-CRPT, 12.2019
Among the lenders participating in the Project finance factory, there are such Russian banks as Sberbank of Russia
, Otkritie Bank