RDIF makes raft of investments

The Russian government fund announced investments across sectors at the St. Petersburg International Economic Forum.

The Russian Direct Investment Fund (RDIF), a $10 billion fund set up by the Russian government to invest in Russian projects and secure co-investments from foreign investors, has announced a raft of investments at the St. Petersburg International Economic Forum.

Investments include in a Russian pharmaceutical company, a healthcare public-private partnership (PPP) project with Italian construction company Impresa Pizzarotti, an agreement to co-invest with “leading investment funds” in the Middle East in Russian Helicopters, and a project to create a Russian centre for medical robots.

The fund has also recently announced investments in agriculture and infrastructure.

The fund has invested in Geropharm, a pharmaceutical company specialising in restoring brain function and treating diabetes. The company will use the investment to construct a high-tech, full-cycle production complex in St Petersburg and to develop new drugs and exports.

“Geropharm has a number of competitive advantages against European manufacturers, including significantly lower productions costs,” RDIF CEO Kirill Dmitriev said in a statement. “After the construction of new production facilities, the company will successfully compete with global producers in Russia and abroad.”

The PPP with Pizzarotti group, for which Gazprom bank will act as financial advisor, lead arranger and lender, will design and construct a medical rehabilitation centre in St. Petersburg. The total construction cost will be around Rb 10 billion (€138 million; $156 million), and services will be provided to the public under a compulsory health insurance scheme.

RDIF has agreed to launch a project to create a Russian centre for medical robots and develop their industrial production in China. In conjunction with Moscow State University of Medicine and Dentistry’s department of urology, scientists from the Institute of Design-Engineering Informatics of the Russian Academy of Sciences have developed a concept for surgical robots, which will improve the interaction between robots and surgeons. The new design is more compact and light, and able to move with greater precision than existing models, according to RDIF. Production and maintenance costs are also lower.

The new robot will form the basis of the new Russia-China Centre for Medical Robots, which will be located at the Skolkovo Technopark just outside Moscow and will focus on scientific research, design work, and software development, as well as the production of complex robot components.

Together with Middle Eastern investment funds, the RDIF will invest up to $600 million in Russian Helicopters, the only designer and producer of helicopters operating in Russia. The investment will give the consortium a stake of up to 25 percent and will help the company accelerate its investment programme, reduce debt and strengthen its market position.

RDIF has also led a consortium of investors, including CDC International Capital, a subsidiary of the French sovereign financial institution Caisse des Dépôts, in an investment of up to €250 million in tableware manufacturer Arc. The transaction is the first investment from the Russia-France Investment Platform, a joint vehicle for investment between RDIF and CDC International Capital.

Plans for the proceeds include the modernisation and strengthening of the company’s facilities in the north of France, expansion of existing facilities in Russia, and construction of a new state-of-the-art glassware plant in Kaliningrad.

RFIP has a pipeline of more than 10 investment projects worth more than €1 billion in sectors such as consumer goods, mechanical engineering, food production and agriculture, construction materials, tourism, retail and infrastructure, according to a statement.

In a media briefing last week, Dmitriev told journalists that RDIF has been able to continue investing despite economic sanctions placed on Russia by the European Union. He noted that while long-term investors see major opportunities in Russia today, many GPs are still sitting on the fence as they view Russia as a difficult market.

Dmitriev added that he expects sanctions on Russia to be lifted by the end of the year. In July the 28-strong EU is set to meet to decide whether the sanctions, which have been in place since 2014, will be extended.

Since RDIF was established in 2011, it has invested or committed more than Rb 760 billion ($11.46 billion; €10.25 billion), of which Rb 70 billion were the fund’s own resources, and 690 billion roubles were provided by its international co-investors, partners and banks. Co-investors with RDIF are required to at least match investments by RDIF.