Following a Kremlin initiative, 15 big Russian corporations from the metallurgical, chemical and oil industries are likely to become unenthusiastic high tech and social investors.
This past July, the Kremlin administration announced its intention to take 500 billion rubles (some $7.7 billion at the current exchange rate) out of the corporations’ “superprofits.”
These corporations include Alrosa, Evraz, Magnitogorsk Iron and Steel Works (MMK in Russia), Nornikel, Novolipetsk Steel (NLMK), Sibur, and others. Their contributions will be used to support the implementation of the national priorities set by President Putin at the beginning of his new term.
After being sharply criticized in industry circles, with the country’s main industry union warning about bankruptcy risks for some of the corporations exposed to the plan, the latter was fine-tuned. The considered total amount of corporate investments could be lower than initially considered: “200 or 300 billion could be enough,” stated Andrey Belousov, the presidential advisor working on the plan. The corporations would not be forced to invest; and the investments would go to projects with a social dimension. A long-list of such projects is currently being discussed.
The new plan still remains unclear, however, on several crucial points, including the way the projects would be selected and the possibility for the concerned corporations to choose which projects to support.
According to The Bell, a rising tech news resource in Russia, the corporations could be invited to finance the Innovative Engineering Center (IEC). Launched by Innopraktika (a company headed by Katerina Tikhonova, who is believed to be Putin’s daughter), this company aims to create, by 2026, “1,000 tech companies” around the country’s universities, generating “100 billion rubles” (around $1.5 billion at the current exchange rate).
The Internet Initiatives Development Fund (IIDF, or FRII in Russian) has positioned itself as another potential beneficiary of the corporate contributions. According to business daily Vedomosti, the fund is suggesting to invest at least 30 billion rubles (around $460 million) in tech startups.
The IIDF itself, Russia’s main seed and early stage startup investment source, was launched in 2013 following a presidential initiative. Its shareholder structure remains confidential, but industry insiders consider Rosneftegaz to be its main backer. The fund’s capital amounts to 6 billion rubles (around $200 million at the 2013 exchange rate, and less than $100 million today, following the ruble’s depreciation in 2014-2015). This amount was seen as disproportionate to the initial goal of supporting Russian startups at their earliest stages.
