OREANDA-NEWS. May 21, 2012. In the course of the 31st meeting of the Russian-German Strategic Group on Economic and Financial Cooperation in Berlin a presentation of a project on establishing a Fund to Support Entrepreneurship was made. The project was initiated by State Corporation ‘Bank for Development and Foreign Economic Affairs (Vnesheconombank)’ jointly with KfW Banking Group.

A Memorandum of Understanding between Vnesheconombank and the KfW on the Possible Establishment of such a Fund was signed in Hannover on July 19, 2011 in the course of the 13th round of Russian-German Interstate Summit Consultations.

Making a presentation of the project, Board Member, Vnesheconombank Deputy Chairman Mikhail Kopeikin stressed that Russia’s and Germany’s interests on this issue coincided as Russian companies’ increased investment demand created new opportunities for German exports.

The Fund is planned to provide support for small and medium-sized enterprises (SMEs) both through target funding of Russian banks (taking into account a significant shortage of long-term liabilities in the banking system) and through direct funding of dynamically advancing medium-sized enterprises.

The Fund’s structure proposed by consultants and comprised of several tranches differing on the level of risk and profitability will make it possible to divide risks taking into consideration demands of all investors and ensure attractive cost of funds for funding recipients. The Fund’s financial model developed in the course of research substantiated such structure’s operational capability and great demand for funding terms and conditions that the Fund will be able to offer ensuring at the same time a high level of profitability for investors.

Mikhail Kopeikin also stressed that the proposed scheme for establishing and managing the Fund provides for a clear-cut motivation system for all participants in the investment process as well as ensures a high operational transparency of the Fund in line with international standards.

KfW Vice President Ronald Ziller said that the Fund’s structure and its instruments were in line with the practice of the world’s leading development institutions including KfW.

After the presentation, Russian Economic Development Deputy Minister Alexei Likhachev backed Vnesheconombank’s and KfW’s proposal to establish the Fund and offered to agree upon main parameters of the Fund with KfW and other potential investors, hold necessary corporate procedures for approving participation in the Fund within a four-month period and report results of work at the next meeting of the Russian-German Strategic Working Group scheduled for September of 2012.