KAZAN – Russia plans to spend 400 billion rubles ($6.8 billion) of its National Wealth Fund money on investment projects this year, on top of the 535 billion rubles it has previously spent to maintain financial stability, a senior official said on Friday.
The balance in the NWF, a rainy-day fund made up of oil and gas revenues, stood at 11.9 trillion rubles or 8.9 percent of gross domestic product (GDP) as of the end of August.
Its liquid assets – or cash in banking accounts that can be mobilized faster – stood at 8.3 trillion rubles, or 6.2 percent of GDP.
The balance and liquid-asset figures were down from 9.1 percent and 6.5 percent of GDP the month before.
“These are long-term investment funds that we are going to direct. It is our contribution to the investment cycle,” Ilya Torosov, Russia’s first deputy economy minister told a banking forum in Kazan on Friday.
According to Torosov, Russia plans to return the cash spent on the infrastructure projects – which he did not give details of – in 20 years. Moscow has previously announced investments into creating new highways and expanding its railway network among other plans.
Russia sent its troops into Ukraine on Feb. 24 and the western sanctions which followed led to reduced purchases of its oil and gas, while many foreign companies left the country.
As a result, Russia plans to spend up to 4 trillion rubles from the NWF separately this year to finance a budget deficit seen at around 1 percent of GDP, according to the finance ministry.
Torosov said that out of 535 billion rubles spent on maintaining financial stability earlier this year, its state financial entity Dom.RF, responsible for housing investments, and Gazprombank, co-owned by Gazprom, received 50 billion rubles in support each.
Just over 300 billion rubles was spent to support Russian Railways, the country’s top employer, and Aeroflot, Russia’s flagship airline, among others.
($1 = 58.98 rubles)