The World Bank
The Russian Federation joined the World Bank (IBRD and IDA) in 1992. The Bank has provided financing for 70 projects in different sectors totaling slightly over US$10.5 billion in IBRD loans. About 95 percent of the total portfolio has already been disbursed.
The current IBRD portfolio consists of 10 projects with a total current commitment of US$668.3 million (as of September 2014). All of the Bank’s financing to Russia is currently provided in the form of investment project financing. Reimbursable Advisory Services (RAS) show steady demand, with continued interest from the regions and growing demand from the federal government.
Portfolio quality is relatively high. Except for the Financial Education and Financial Literacy Project, which holds moderately unsatisfactory rating in implementation progress, all other projects are rated at the moderately satisfactory or satisfactory level. The Judicial Reform Support Project went through two intensive restructurings and has been upgraded to moderately satisfactory. FY14 closed with a disbursement ratio of 15.5 percent, which was below ECA’s average of 23 percent. The average project age is 5.2 years, attributable to the fact that the majority of the projects are designed as five-year investment operations.
Analytical and Advisory Services (AAA) remain an important part of IBRD’s engagement in Russia. In close cooperation with the Government, AAA products are helping to modernize public finance and administration and improve social service delivery and the investment climate. The Bank expanded its technical assistance to areas of early childhood development (ECD) and social development, such as technical assistance on indigenous people and social accountability. In FY14, along with two traditional flagship Russia Economic Reports, the World Bank presented the reports on “Environmental Perspective of Russia’s Accession to the WTO”, “Corporate Governance Reform in Russia” and several others. The report on social mobility is being prepared for release in FY15.
In October 2013, the World Bank and IFC presented “Doing Business 2014: Understanding Regulations for Small and Medium-Size Enterprises.” The report found that the Russian Federation made starting a business easier by abolishing the requirement to have the bank signature card notarized before opening a company bank account. It made dealing with construction permits easier by eliminating several requirements for project approvals from government agencies and by reducing the time required to register a new building. And it made getting electricity simpler and less costly by setting standard connection tariffs and eliminating many procedures previously required. In addition, Russia made transferring property easier by streamlining procedures and implementing effective time limits for processing transfer applications. Finally, it made trading across borders easier by implementing an electronic system for submitting export and import documents and by reducing the number of physical inspections. Russia’s DB2014 ease of doing business rank was 92.
Demand has grown rapidly for RAS. Since 2007, the WBG has entered into more than 80 RAS for a total of almost US$ 40 million. Agreements cover a wide range of activities that are well aligned with Russia’s development challenges. RAS are also of increasing importance for Russia’s regions with more than 30 of Russia’s subnational governments having signed at least one RAS with the WBG (15 currently active in 9 different regions).
Innovative RAS products allow the WBG to build and keep a lead in global knowledge provision. One of the areas of early demand for RASs was in support for large-scale infrastructure projects where WBG advisory services supported the St. Petersburg Pulkovo airport expansion based on a private-public partnership (PPP). Pulkovo attracted more than EUR1.2 billion of private investments and was awarded the title of "Global PPP deal of the Year" by Infrastructure Investors in 2011. As international experience and analytical components are often critical success factors for education, health and social protection, demand from clients has led to widespread use of RAS in associated global practices as well. During the past two years, RAS are also in demand for improving the investment climate, providing economic policy advice and the local initiatives support program.
International Finance Corporation
Russia became an IFC member in 1993. Since then, IFC’s investments in Russia have totaled US$11.7 billion, including US$3.4 billion in syndicated loans across 309 projects. IFC’s current committed investment portfolio in Russia is US$1.9 billion in over 100 projects with about 70 clients. In FY14, IFC committed US$655 million at its own account and mobilized US$104 million from partners. Since the beginning of FY15, IFC committed about US$60 million at own account.
In line with the World Bank Group CPS, IFC continues supporting economic diversification and growth in Russia by helping its private sector clients realize long-term development potential, with particular focus on maximizing impact in less-developed regions, including creation of new high-skilled jobs; expansion of high value-added manufacturing; and improvement of transport and social infrastructure to provide people and companies with better access to goods and services. In addition, IFC provides Russian companies and banks with strategic advice on achieving long-term sustainable growth, increasing energy and resource efficiency, improving corporate governance, and advises Russian regions on structuring municipal infrastructure projects.
Multilateral Investment Guarantee Agency
MIGA’s gross exposure in Russia is US$852 million as of August 2014 (MIGA’s second largest gross and net exposure). MIGA is involved in eight projects in finance, infrastructure, manufacturing, agribusiness, and services. In dollar terms, MIGA’s exposure is concentrated in Russia’s financial sector (some 80 percent of MIGA’s gross exposure), supporting the investments of global financial institutions in their banking, mortgage, and leasing subsidiaries in Russia. Five out of MIGA’s eight projects are in non-financial sectors, some of them in Russia’s regions; such as agribusiness – in Russia’s ‘black earth’ regions of Penza and Tambov, and manufacturing – in Novocherkassk.
Last Updated: Oct 08, 2014