Russian fund’s BRICS initiative gains ground

The Russian Direct Investment Fund has teamed with India’s IDFC and others to develop a joint mechanism for equity investing.

The Russian Direct Investment Fund (RDIF) has won support from four partners for a BRICS investment initiative that it first proposed at a BRICS summit in Fortaleza, Brazil, in July last year.

India’s IDFC Group, Brazil’s BTG Pactual, China’s Silk Road Fund and the Development Bank of South Africa have all signed up to what is described in a statement from RDIF as a “joint mechanism for equity investments in infrastructure projects in BRICS countries”.

Although details of the initiative are scant at this stage, the statement added that the parties would work together to identify and finance projects that would “improve trade, economic and investment cooperation between BRICS countries”.

“Together we will create an effective new tool for financing infrastructure projects in emerging economies,” said Kirill Dmitriev, chief executive officer of RDIF. “Our combined experience and expertise will ensure that even projects on a major scale are viable for investment.”

The framework agreement for the initiative was signed at the BRICS summit in the Russian city of Ufa, which has been taking place this week, and was supported by the BRICS Business Council. Dmitriev added that the investment partners would be coordinating their efforts with the BRICS New Development Bank, the newly launched multilateral organisation backed by the BRICS countries.

RDIF was established in 2011 to make equity co-investments, mainly in Russia, alongside international investors. Based in Moscow, the fund is a 100 percent subsidiary of Vnesheconombank, the Russian state corporation.

RDIF, which has been prolific in forming partnerships, last month announced it would be teaming with China Railways to invest in Russian hydropower. It also revealed plans to back a $9.5 billion petrochemical facility in Tobolsk in Siberia, and an agreement with Italian developer Pizzaroti to invest in the construction of toll bridges over railway crossings in the Moscow region.