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Export Development Canada (EDC), Canada’s official export credit agency, and Vneshtorgbank, one of Russia’s leading universal banks, have signed a memorandum of understanding in Moscow to enhance cooperation and coordination in support of Canadian exports of goods and services to Russia.

The agreement establishes an ongoing relationship between EDC and Vneshtorgbank, and provides a framework for both organisations to enter into financing arrangements for specific transactions, to exchange information about potential projects and programmes, and to promote each other’s services in Canada and Russia.

Moreover, a key component of the agreement is a declaration that both parties are working towards shortly establishing a US$50m line of credit, under which EDC would provide direct financing to Vneshtorgbank for on-lending to its Russian clients in support of their capital goods and services purchases from Canada.

As part of the growing trade relationship between Canada and Russia, the agreement provides a sound basis for EDC and Vneshtorgbank to help boost commercial activity in sectors such as oil and gas, energy, mining, manufacturing, construction, telecommunications and forestry. Realising new opportunities in these sectors of importance for both the Canadian and Russian economies is central to the MoU between EDC and Vneshtorgbank.

Vneshtorgbank was established in October 1990 as a closed joint stock company aimed at servicing foreign economic relations of the Russian Federation. Vneshtorgbank was transformed into an open joint stock company in January 1998, and the government of the Russian Federation is the major shareholder of Vneshtorgbank. Vneshtorgbank holds one of the leading positions in financing the Russian economy. As of June 30, 2003, Vneshtorgbank’s loans outstanding to non-financial companies totaled US$3.8bn. The main borrowers are Russian industrial enterprises and foreign trade companies.