_ Andrey Beliyaninov, chairman of the board, Eurasian Development Bank. Moscow, 26 February 2018.
This year, the Eurasian Development Bank plans to increase the loan portfolio by not less than US $700 million. The institution also plans to launch internal settlements in the currencies of all its member states. As for strategic development, the EDB intends to focus on cooperation with Chinese financial institutions.
– Mr Beliyaninov, what are your current tasks now as the head of the EDB?
– The Eurasian Development Bank has been operating for over eleven years. Its founders are five countries of the Eurasian Economic Union plus Tajikistan. The Bank is in good condition; it has stable profit and works with its founders and their industries, their economies. However, I would like to point out that, at present, there is a significant need for settlements in national currencies. Not everyone is eager to assume foreign exchange risks associated with the dollar or euro. We would like to work in roubles, tenge, dram, somoni, Belarussian roubles. Generally speaking, this is in the spirit of the times. This is good because we get a unique situation when we could talk about the rouble as the only payment unit that help avoid risks associated with sanctions. For this reason, we’re preparing to arrange settlements within the bank in different world currencies. We would like to cooperate with Chinese financial institutions actively.
– As regards cooperation with Chinese banks, do you mean settlements and payments?
– Settlements, payments and co-financing as they have serious financial capability. Our portfolio of applications for such investment opportunities is growing.
– You mean in China?
– Yes. We are a development bank established for integration. Infrastructure projects are extremely important. And we have many applications related to mining, especially in Kazakhstan. We have no geographical preferences among the founding states. But in 2017, Kazakhstan accounted for 42% of our investment portfolio. Everything suggests that the growth of our economies is, obviously, not soaring, but, still, there is an upward trend, and all the EDB founding states have growing economies, and this is important to us as our loans must be repaid. We would like this money not only to be returned, but to work. And this is happening. For us, this is both strategy and tactics.
We have no geographical preferences among the founding states. But in 2017, Kazakhstan accounted for 42% of our investment portfolio.
In addition, we are living now in an unpredictable economy. I mean sanctions and our bank is a very good instrument, because it is international. We do not have jurisdictions involving accountability to any central banks. Many entrepreneurs from all countries come to us because we extend loans in the tenge, roubles and other currencies, for long periods and at rather comfortable rates. I am convinced that we will enhance our investment portfolio significantly during 2018.
– What can be the portfolio dynamics?
I would not like to give any reckless forecasts. Now we need to fulfil the plan that meets our strategy. We need to enter into contracts for about US $700 million. I mean in 2018. I believe that we can surpass this target. We are working very efficiently on financial markets, although this is not a goal in itself.
– What borrowings do you plan shortly?
Two weeks ago, we made a rouble offering and raised RUB 5 billion. In my opinion, the rate is rather high, 7.75%, for three and a half years. The bank has good ratings, good authority, we are welcome. We are going to prepare offerings in other national currencies.
You have raised this money now and what is the amount you would like to raise?
You know, I wouldn’t tell now, I think.
– At least, as compared with the previous year. Would you like to have it at the same level or, maybe, there is no such necessity?
– I think this would be commensurate. Because this year some contracts will expire and money will be repaid. We will channel this money into refinancing immediately. However, if to consider the applications we receive, I think that an increase is possible, especially as regards offerings in national currencies. It is not of great interest to us now, to make offerings in the dollar or, moreover, in the euro. We will focus on this segment.
– What currencies are you in greatest need for now?
– We plan to raise the tenge. We have very comfortable relations with the national banks of the founding states and count on deeper work and mutual understanding with the Bank of Russia. If we had sufficient rouble mass, we could dictate terms, as the saying goes. This would be attractive to all, as market participants are ready to work with the rouble as a financing currency.
– As for the tenge, do you plan to raise it in approximately the same volumes, equivalent to the rouble?
– We’ll decide depending on the value of our applications. In any case, this will be a targeted borrowing. We do have applications and they are at the stage of deep processing now. I soon this will happen shortly.
– What interesting and large projects are being prepared or can be fulfilled this year?
– I would prefer not to name any projects now, maybe out of superstition. But we have many proposals from Kazakh businesses, in mining, for example. These involve coal, gold, rare-earth metals. In Russia, the pattern is similar. For the time being, we lack programmes for interacting with ministries of our member countries. We are interested, though, in that we are able to track technological chains that involve several member states. The economy of Belarus is very promising, of course. It is comfortable to work there because the local Ministry of Finance provides government guarantees and we consider projects simply in terms of whether they can be fulfilled, while the issue of guarantees is of lower concern. In Belarus we work with BelAZ and KamAZ. In Kazakhstan, we work with AvtoVAZ.
– As for Belarus, Lukashenko made suggestions that an individual plan for the bank’s cooperation with the country should be developed. Do you think this is necessary?
– The industrial park created by the Belarusians is, indeed, a very outstanding example. But we proposed, in addition to that, the conditions of cooperation that are based on partnership with the Development Bank of Belarus and the Development Bank of Kazakhstan. Everyone is happy with these proposals because we also reduce risks to some extent. Another question is why consult about Belarus’ peculiarities if it has an entire bank with a host of professionals. Sergey Rumas heads the Development Bank of Belarus, and Zhamishev, former Finance Minister of Kazakhstan, heads the Development Bank of Kazakhstan – I’ve known him for a long time. We understand each other and will pass the same stage of co-financing. I believe this is important. There should not be a single source of finance. There are a lot of projects, and we need to be very objective and, obviously, very conservative when considering them.
– It was stated before that the EDB is ready to consider participation in financing the Moscow-Kazan high-speed railroad. Do you still intend to?
– Yes, we are ready.
– Are there any agreements already, probably?
– You know, for the time being, we are holding consultations with Russian Railways. And I think that other financial institutions will, too, express interest. We would be happy to join this “good company” because it is a good project.
– It was stated earlier, too, that the Bank considers enhancing its membership. Is it really necessary?
– You know, we can work effectively with any members of our bank. For me, however, this is a political issue in the first place. So, the decision should be made by the heads of our states, which have established the bank. As any bank, the EDB is interested in attracting new members, for sure. If there is such an instruction, we’ll fulfil it. Now we are working in these conditions absolutely comfortably.
– Does your experience at the customs help you in your current position?
– You know, my customs experience has given me an almost encyclopaedic background. I had to learn and understand, out of bare necessity, of course, all areas and fields of expertise, from agriculture to space satellites. So, this has really given me a lot. I know geography, I know enterprises, and I know exporters and importers – the overall situation. Moreover, foreign trade was not mere words to us, it was our routines. And we should promote and assist exports and imports, mutual exports from our countries. I have this understanding.