1 March 2004
A two-day meeting between Vneshtorgbank and UES of Russia came to an end, where representatives from head offices of both organisations, branches of the bank and regional enterprises of the power energy group took part.
The meeting focused on current matters of co-operation between the parties, and on presentation of core banking products and services offered by Vneshtorgbank and its branches to regional subsidiaries and power stations of UES of Russia".
Mr. Igor Zavialov, Deputy Chairman of Vneshtorgbank, opened the meeting and stated in his welcome speech addressed to the meeting participants that despite a rather short co-operation, VTB and UES of Russia made remarkable achievements in bilateral partnership.
VTB started its first lending transactions with regional enterprises of UES of Russia in 2000, and presently Vneshtorgbank renders cash-and-settlement services to its 37 regional power energy companies, and out of them individual lending limits were established for 17 companies. VTB co-operates with regional enterprises of UES of Russia subject to a programme approved by the Supervisory Board, aimed at financing enterprises of UES of Russia for 5 billion roubles and for a term up to April 2004.
At present, Vneshtorgbank is aiming at expanding the range of services rendered to regional enterprises of UES of Russia and not confining itself by financing ongoing activities. In this connection, representatives of the VTB head office present in the meeting gave its colleagues from UES of Russia a detailed account of capabilities Vneshtorgbank has in place to implement investment projects and programmes, leasing and documentary transactions, trade finance and mortgage lending. A most promising financial instrument being considered, where power energy companies will be financed to purchase Vneshtorgbank promissory notes with a view to pay coal, fuel oil and gas deliveries from producers.
Nowadays, Vneshtorgbank is working with several regional companies of UES of Russia at raising medium-term (from 3 to 5 years) borrowings from foreign financial institutions to purchase imported equipment subject to programmes of power energy companies intended to modernise and build-up fixed capital assets.
In return, representative of UES of Russia made reports on matters related to reforming the power energy group, its lending and investment policy. The interest to such matters was due to a continuing reforming process of regional power energy companies, which envisages to transform the existing regional companies of UES of Russia into new enterprises specialising in a particular activity such as power generating, distributing, networked and management companies. With a view to maintain and expand the existing level of co-operation between Vneshtorgbank and UES of Russia under the power energy reform, Vneshtorgbank personnel and chief executives of regional companies jointly with head office staff of UES of Russia have been working now at preparing a plan of concerted action for the reform period.
`The power energy sector serves as a basis for operation of the up-to-date economy in any industrialised nation. Vneshtorgbank as an important member of the domestic financial system understands it perfectly`; pointed out Mr. Igor Zavialov in his speech, `that is why we are going to render further assistance to UES of Russia in implementing its development strategy through sophisticated banking, investment and consulting services tailored to suit the needs of our strategic customer`.
For reference: Russian Joint Stock Company - Unified Energy System of Russia (UES of Russia") forms the Unified Power System of the country, controls use of over 70% of electric power and generation of over 70% electricity nation-wide, organises supply of electric power to households, industry, agribusiness, carriers and other final users.