The Russian Direct Investment Fund (RDIF) is to be spun off from the troubled Vnesheconombank (VEB) and will instead report into the country’s Federal Property Management Agency, officials close to VEB told Vedomosti this week. The change in its status is expected to be put into effect by the end of the summer.
Set up five years ago to attract foreign investment through project co-financing, the RDIF is now feared to be in danger of being pulled down by VEB’s current difficulties which stem from its use to finance politically motivated but unprofitable projects, notably the 2014 Winter Olympics in Sochi. “VEB is almost on the verge of bankruptcy …while the RDIF is an efficient company and should not sink with it,” one of the officials said.
Since it was established in 2014 the $10bn RDIF has been used to prepare a number of companies for their IPOs, including the Moscow Exchange and diamond producer Alrosa; and to attract foreign investment into several leading companies operating in key sectors, including Rostelecom, Nord Hydro and the Russian Forest Products Group.