The Minister of Economic Development: Russian investment opportunities are very much underestimated

Photo: Vesti

Andrey Belousov pointed it out on the Vedomosti conference on the 4^th December.

“Russia is one of the few countries with fast growing markets” – said the minister. He also reminded, that the country has a huge volume of internal savings, which reach 30% of GDP. But only 20% of GDP are spent on the investments.

According to the Minister, this imbalance can be explained by the limitations of investment climate. As a result, on the world investment market Russia has only 3% share. In 2011 the FDI amount was $53 bln, which is more than twice less than that of China.

Mr. Belousov explains these moderate figures by the poor performance in such spheres as customs regulation, regulation in construction, and getting electricity. However, he insisted, that Russia performs much better on some other indicators. These are registering a company, registering property, and tax paying.

The official draw his attention on the big gap between the Russian regions in terms of investment climate. For example, in Surgut city in will take 150 days to get the construction permission, while in Tyumen the same procedure takes 448 days, three times longer.

“Even in the frame of current regulatory framework, there are big reserves to improve the investment climate” – summed up the Minister. In order to do this, he proposed to cooperate with the business, and attract the experts, including the international ones.

Currently, Russia occupies the 120^th place out of 183 in the Doing Business ranking, prepared by the World Bank. Euromoney puts Russia on the 60^th position out of 186 in its Country Risk ranking.

Rosneft to get a $30bn loan to finance TNK-BP takeover

Rosneft CEO Igor Sechin

Russian oil major will get the loan from a syndicate of international banks. $7.5bn from the whole amount will be provided as a long-term financing.

More than 16 banks participate in the deal, Prime News agency reports. Though Prime does not provide their names. Barclays, Citigroup, JP Morgan and VTB Capital are organizing the deal. Deutsche Bank, Bank of America Merrill Lynch and Morgan Stanley are assisting.

To finance the buy out, Russian company needs $45.1bn in cash plus 12.84% Rosneft stake as a compensation for BP.

Company will use own funds to finance the deal. Rosneft and TNK-BP has on its accounts more than $15bn, in the form of cash, cash equivalents, and short-term financial investments, Slon.ru reports.

Last week Rosneft and BP signed an agreement on the acquisition of 50% stake of TNK-BP. The agreement with AAR, the other participant of the joint venture, will soon come about. Rosneft plans to complete both deals by July 2013.