Russia's state development bank VEB.RF (former Vneshekonombank) will have new KPIs (key performance indicators) set up by the government, RBC business portal reported on January 22 citing sources close to the bank.

As reported by bne IntelliNews, Igor Shuvalov, ex-deputy prime minister and trusted Kremlin bureaucrat, since 2018 has revamped VEB.RF and transformed it into the main state investment hub. 

After the appointment of Shuvalov, the bank started shedding non-core assets, was actively lobbying for massive recapitalisation, was allowed to become a major player on the pension fund market, and scored a major victory in securing over RUB1 trillion ($13.1bn) of budget subsidies. 

Reportedly, the government will now cross-check the financing of VEB.RF projects with promoting the National Goals, evaluate attracting third-party capital, the cost of investment portfolio management and the return of "bad" assets, among other indicators.

The KPIs set for VEB.RF will have different weights in overall performance evaluation, with 65% weight given to compliance with National Goals and 35% to financial stability. 

VEB.RF representatives told RBC that the approval of new KPIs is in line with the larger reform of state development institutions and agencies.

bne IntelliNews reported that the Kremlin has launched a massive restructuring of numerous Russian development institutions under the umbrella of VEB.RF and the Russian Direct Investment Fund (RDIF). 

The reform of tens of ineffective institutions is another attempt by the Kremlin to re-animate the implementation of the National Projects, following the mini-government reshuffle that has strengthened the team of PM Mikhail Mishustin. The launch of the National Projects was upset by the coronavirus (COVID-19) pandemic turbulence and was partially rolled back and repackaged as less the ambitious National Goals programme.

Under the reform, VEB.RF will now control Rosnano nanotechnology, Skolkovo innovation hub, Russian Exports Center, the Industrial Development Fund, the Federal SME Corporation and others. Notably, this marks another strengthening of the role of Igor Shuvalov, the head of VEB.RF.

According to RBC, in 2021 VEB.RF has to channel RUB850bn for national projects, RUB770bn for entrepreneurship and labour efficiency promotion, RUB55bn for improvement of living conditions, and only RUB4.3bn for digital transformation programmes. 

Planned support for non-commodity and non-energy sectors amounts to RUB320bn. Previously approved development projects amount to RUB750bn.

As of end of September 2020 VEB.RF's total assets amounted to RUB3.4 trillion ($45bn) under IFRS, with a loss of RUB30bn posted for 9M20 and profit of RUB17.4bn for 3Q20 alone.