Page 17 - RusRPTMay21

inflation in Russia. The deputies (and at the same time investors) had to be reassured by the Minister of Finance Anton Siluanov: "Of course, we will be sorry if foreigners stop buying our debt." In an extreme case, Russia will survive the cut off of external borrowing at the expense of internal resources, the minister promised.
Against the background of other emerging markets, Russia looks good, Dmitry Dolgin, the author of calculations of investments of non-residents, ING chief economist for Russia and the CIS, told RBC. The flight of non-residents from OFZ is not observed, says Sofya Donets, an economist at Renaissance Capital for Russia and the CIS: investors are really being cautious, reducing participation in new placements, but managing existing positions as usual. There are also those that buy Russian OFZs taking into account the increased rates.
VTB Capital predicts that the outflow of foreign capital will continue in the coming weeks. But its pace is likely to slow down, and in the long term, Russian OFZs will remain attractive.
Theoretically, the entire national debt can be bought by the largest Russian banks, especially with the help of the Central Bank promised by Siluanov. The question here is the price, which can be reduced by non-residents. On March 31, the Ministry of Finance successfully borrowed almost RUB355bn rubles, but with an increased yield - the rate of 7.27% for seven-year securities and 7.06% for fifteen-year securities. Almost half of the issue was bought by VTB.
The Finance Ministry's plan for the second quarter of 2021 is to borrow 1 trillion rubles. “The Ministry of Finance has adjusted to the new reality of an increase in the key rate and longer sanctions risks,” says Donets.
2.5 Green financing rules being worked out
The Ministry for Economic Development, together with VEB, had worked out the criteria for determining projects with green financing instruments, RBC reported on Tuesday 6 April.
The draft legislation is currently being discussed by the respective ministries and could be submitted to the government as early as in May.
The document contains a detailed methodology for labelling a project ‘green’ (a taxonomy of green projects) as well as the description of the verification mechanism. Any company, either public or non-public, can raise green financing if it is planning a project that satisfies the green criteria. The project has to use the best available technology, approved by the government. Among other criteria:
· for gas generation - the emissions have to be lower than 30gCO2/kWh;
· for steel production - the emissions have to be lower than
17 RUSSIA Country Report May 2021 www.intellinews.com