ANNOUNCEMENT 29 Mar 2016In March 2016, the government of the Russian Federation announced a change in private-sector financial support.
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On 29 March 2016 a meeting of the Supervisory Board of the State Corporation "Bank for Development and Foreign Economic Affairs (Vnesheconombank)" was held. The Russian Prime Minister Dmitry Medvedev has announced that Vneshekonombank will receive a bailout of 150 billion RUB (ca. 2.2 billion USD).
Concretely Mr Medvedev announced that: 'a decision for additional capitalisation of the Bank at the amount of 150 billion RUB has been taken. This money will help to ensure in 2016 the financial stability of the Bank, and to meet bank's liabilities related to foreign borrowing in the capital markets. We have made this decision in the framework of the general action plan of the Government to ensure sustainable socio-economic development of our country in the current year'.
The reasons for this state support are the financial difficulties Vneshekonombank (VEB) experienced after Western sanctions cut its access to international lending in 2014. Since VEB finances large-scale state projects, for example, Russia's Sochi Winter Olympics and other politically-driven projects, the Western sanctions led to VEB's struggle to repay its debts.