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. Last Updated: 07/27/2016

VEB Builds $1.7Bln Agriculture Portfolio

Prime Minister Vladimir Putin said Wednesday that Vneshekonombank has built an agriculture portfolio of 60 billion rubles ($1.7 billion) this year, making it the third heavyweight creditor to pledge support for the sector.

The announcement comes a day after Agriculture Minister Alexei Gordeyev said Sberbank and Rosselkhozbank pledged a combined 120 billion rubles in short-term loans to help farmers prepare for the spring sowing season.

The development bank now has "many interesting projects" in the agriculture sector, said Putin, who chairs VEB's supervisory board.

He rattled off a list of investments in the Rostov, Orenburg, Moscow, Tambov and Omsk regions while opening the meeting, attended by VEB chairman Vladimir Dmitriyev and First Deputy Prime Minister Viktor Zubkov, a former collective farmer who oversees the sector.

The government is rushing to make sure that farmers have enough cash to prepare for the sowing season, and the high-level meeting was the second in two days focusing on crediting sector. Gordeyev, who has headed the ministry since 1999, and one of his deputies were appointed Monday to serve as governors in two agricultural regions.

In early March, the government will meet to discuss the state of farmers' spring-sowing preparations, Zubkov said. "I think that all these issues will be thoroughly analyzed at the government meeting and that this year the spring sowing season will be carried out on time and in an organized fashion," he said.

"This will become a guarantee that the harvest will be good this year."

VEB this year began investing in major, value-added infrastructure projects in the sector, including an industrial milk plant in the Moscow region and a sugar-beet refinery in the Tambov region.

"The Tambov region produces the largest amount of sugar beets," Zubkov said. "Therefore, the commission for agricultural development decided to look into building the factory, and now, for all practical purposes, Vneshekonombank has decided to begin building the factory this year."

The commission, headed by Zubkov, approves all of VEB's investments in agriculture.

The Tambov regional government is "actively participating in and co-financing the project," said Zubkov, after Putin asked him whether the regional governments would also help fund the projects.

Dmitriyev said VEB would focus on bringing "modern technology" to the sector.

VEB "made the right decision" when it loaned 100 million euros ($126 million) to a turkey processing plant in the Rostov region to increase its capacity by 10,000 tons, Zubkov said.

Rosselkhozbank, the country's main creditor for the sector, had already loaned 58 billion rubles this year.