ANNOUNCEMENT 22 Oct 2012

On 22 October 2012, the Russian government launched a new edition of the program of loan subsidization targeting aircraft and aircraft training equipment.

NUMBER OF INTERVENTIONS

1

  • 1 harmful
  • 0 neutral
  • 0 liberalising

SOURCE

Government of the Russian Federation. Decree 1073 dated 22.10.2012 and updated on 29.03.2013 with Decree N 279; on 12.10.2013 with N 918; on 14.03.2015 with N 225; on 21.04.2016 with N 334 and on 13.12.2017 with N 1533). http://pravo.gov.ru/proxy/ips/?docbody=&nd=102160209&rdk=5

Inception date: 22 Oct 2012 | Removal date: open ended

Interest payment subsidy

On 22 October 2012, the Russian Government updated Regulation N90 (dated 16.02.2008) on the allocation of subsidies to the Russian leasing companies and aircraft producers targeting loan payments related to purchasing and leasing out aircraft and aircraft training equipment. The Regulations are in the framework of the State Program on the Development of Aircraft Manufacturing in 2013-2025. 

The Regulation N 1073 states that the subsidies are to cover interest payments on loans taken from the Russian commercial banks and state-owned Vneshekonombank. The program targets:

  • Russian leasing companies - to purchase aircraft and lease it to the Russian airlines
  • Russian leasing companies and aircraft manufacturers - to purchase aircraft training equipment (for Russian-manufactured aircraft). 

The subsidy covers 90% of the interest payment. Annual interest on loans is capped at the Central Bank refinancing rate for ruble-denominated loans and 12% for non-ruble loans. 

The Regulation 1073 replaced Regulation 90 dated 16.02.2008 which offered the same instrument but with a clearer statement on the exclusive targeting of the Russian-made aircraft. It also capped the duration of the leasing agreements at 15 years. See related State Acts below for more details.

The October 2012 edition underwent five amendments, all sourced above, which did not change the substance of the rules. The only changes concern: 

  • replacement of the 12% cap for foreign currency loans with the maximum for the ruble-denominated equivalent (2013 amendment). For the loans that precede 2013, the foreign-currency loan caps were adjusted from 12% to 10% for 2014 payments, 8% for 2015-2016 and 4% for 2017-2018 (2015 amendment)
  • replacement of the Central Bank refinancing rate with the Basic Indicator for Calculating Loan Payment Subsidies (2016 amendment), which combined the refinancing rate with the yield curve on the Russian federal zero-coupon bonds. The Government claimed it did not substantially influence the level of state support, but rather adjusted it based on the maturity of the loan. 

 

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