KfW Entwicklungsbank boosts innovation and modernisation in SMEs in the Russian Federation

Frankfurt (ots) - Agreement worth EUR 100 million signed with
Russia's VEB

Positive effects on Germany's foreign trade

At today's German-Russian government consultations in
Ekaterinburg, KfW Entwicklungsbank signed in the presence of Federal
Chancellor Angela Merkel and President Dmitry Medvedev an agreement
with Vnesheconombank (VEB) worth EUR 100 million. The purpose of the
agreement is a strengthening of innovation and modernisation efforts
in the SME sector in the Russian Federation. The agreement will be
implemented by Russian Bank for Development (RBD), a 100% affiliate
of VEB, and KfW Entwicklungsbank in the form of programme loans.

As well as stimulating innovation and modernisation in Russian
SMEs, this measure is also expected to generate positive effects on
Germany's foreign trade. Evaluations of the KfW's existing SME
programmes in the Russian Federation have shown that up to 60% of all
the goods and services financed benefit the German economy either
directly or indirectly.

'For KfW, signing this loan agreement is a cornerstone on which to
extend our promotional programme structures in the Russian
Federation, and a further milestone in our close cooperation with our
partner the Bank for Development and Foreign Economic Affairs,' said
Dr. Lutz-Christian Funke, Director of KfW Bankengruppe, as the
agreement was being signed.

This loan to the RBD was extended on the basis of the
'German-Russian Programme for Innovation and Modernisation of Small
and Medium-Sized Enterprises', which VEB and KfW had signed in April
2010. The RBD will pass on the KfW funds to various Russian banks.
These will then extend credits to their own SME clients in order to
support the willingness of these SMEs to modernise and innovate.

Innovation and modernisation of the Russian economy is currently a
major topic of public debate in Russia. Both President Medvedev and
Prime Minister Putin have repeatedly called on Russian enterprises to
step up their engagement. Thanks to the close cooperation that
already existed between VEB and KfW the two development banks were
able to swiftly design a programme to promote innovation and the
modernisation of Russian small and medium-sized enterprises. In this
context KfW was able to draw on its many years of experience in
supporting SMEs and providing finance for innovation in Germany.

The German government has been supporting the economic development
of the financial and SME sectors in Russia in a variety of ways for
years under the TRANSFORM Follow-Up Programme. Mandated by the German
Federal Ministry of Economics and Technology and the Federal Ministry
of Finance, KfW supports its Russian partners in the spheres of
business and policymaking through refinancing programmes (currently
approximately EUR 300 million) and targeted advisory and consultancy
measures (e.g. concerning legislation, managerial training, SME
promotion and financial systems development).

Originaltext: KfW
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Pressekontakt:
Dr. Charis Pöthig
KfW, Palmengartenstraße 5-9, 60325 Frankfurt
Kommunikation (KOM)
Tel. 069 7431-4683, Fax: 069 7431-3266,
E-Mail: charis.poethig@kfw.de, Internet: www.kfw.de