VEB helps to fill the hole in Yamal LNG without spending “live” money

Novatek has received a credit guarantee from VEB for $3 billion instead of a loan in the amount of $1 billion, which, apparently, will allow it to complete negotiations on the project financing for the Yamal LNG project. Thus, Russia, taking into account 150 billion rubles from the National Welfare Fund, has undertaken almost half the Novatek’s risk on external financing. According to the Kommersant’s information, the issue of state guarantees of VEB was finally agreed with the Chinese during the visit of the Head of the State Council of China Xi Jinping to Moscow.

Yesterday, the VEB's supervisory board approved loan guarantees to the project of Yamal LNG for $3 billion in commitments by Novatek. "The urgency of this decision is explained by the need to complete the negotiations with foreign partners of Novatek - Chinese and French companies, which also assume the risks of the project. But in this case we give a counter-guarantee for Novatek," - said head of VEB Vladimir Dmitriev.

Now shareholders of Yamal LNG, within which by 2017 an LNG plant with capacity of 16.5 million tons is to be built, in addition to Novatek (60% stake), are the French Total (20%) and China's CNPC (20%). The cost of the project is $27 billion, $10 billion of which have already been invested as of April – these are shareholders' equity and the first of two tranches - 75 billion rubles from 150 billion rubles - from the National Welfare Fund (NWF). The remaining funds are planned to be attracted as external financing.