OREANDA-NEWS. Vnesheconombank and Polyester Plant Ivanovo, JSC concluded a loan agreement for the construction of the textile grade polyethylene terephthalate production plant in Vichuga City, Ivanovo Region.

The total project value is 25 billion rubles, of which Vnesheconombank will commit 19 billion. The funds will be provided for a term of up to 13 years. The project involves the construction of an integrated manufacturing plant with a capacity of up to 175,000 tons per year of polyester staple fiber and up to 30 thousand tons per year of textile grade PET chips.

The project will be financed by approximately 280,000,000 Euro raised by VEB from European banks against the security provided by European export insurance agencies. Additional financing will come from the project initiator, Polyester Plant Ivanovo, JSC, who will invest over 5 billion rubles of its own capital.

The participation of Vnesheconombank in the construction of the plant was approved at the meeting of the Bank's Supervisory Board in December 2016.

The goal of the project is to establish local content in the production of high-quality polymeric fiber and to provide substitution for imported raw materials for the processing and textile industries in Russia; to set up process chains for the production of industrial textile for the growing domestic market; to ensure the desired transition towards innovative development in the textile industry through the progressive overcoming of raw material imbalances; and to develop the export potential of the Russian Federation.

The synthetic fiber manufacturing complex is the largest project in the Ivanovo region that is of strategic importance for the Russian textile industry, and it will benefit from the public-private partnership. VEB’s participation in this project meets the Bank's development strategy.