Applicants for NWF resources fail to provide in-depth analysis of their projects

Rosneft, a largest taxpayer, the BAM (Baikal-Amur Railway) and the TRANSSIB ( The Trans-Siberian Railway) which are essential for the Far East Region, high-tech projects are competing for the entitlement to spend the National Wealth Fund's resources.

The funds accumulated in the National Wealth Fund (NWF) should be invested rather than kept idle. Actually, today most of the "national wealth funds" have already been "reserved" for infrastructural projects (40% or less), projects of the Russian Direct Investment Fund (RDIF) (10% or less) and Rosatom (10% or less). Additionally, under the respective law, a part of the NWF's resources (7% or less) will be deposited in VEB. In particular, the appropriation of the resources within these volumes to such companies as Rosneft and NOVATEK (applying for Rb 80bn to Rb 150bn each) is being worked out, and there are plans to increase VEB's capital.

Facing western sanctions, Russian corporations and the Bank for Development need additional resources to maintain financial sustainability and finance the existing investment projects. Budget appropriations is therefore an easiest way to do it.

This is why many corporations have been queuing up for "temporally idle resources". Despite that the resources of such funds are supposed to be invested in domestic infrastructural projects, the applicants for NWF's resources fail to provide a well-defined and in-depth analysis of potential infrastructural projects.

First of all, it's important to understand whether these resources are spent to promote economic development of the country or cover the current needs of corporations. Therefore, in our opinion, it would be premature for the time being to positively assess this proposal. Additionally, there is minimum efficiency in investing NWF's resources in bonds issued by foregoing companies and deposits in VEB, and the NWF's assets haven't to date reached the value observed in the pre-crisis period (as a percentage of GDP).

Ruslan Ibrayev, researcher