Business news

MINSK, 28 August (BelTA) – The Eurasian Development Bank (EDB) will support the Russian coal export market by providing an investment loan to the Russian leasing company TransFin-M for the sake of buying BelAZ haul trucks, BelTA learned from the EDB website.

The $91 million loan will be granted in Russian rubles for a period of six years. Thanks to the loan TransFin-M will be able to provide logistics services for extracting and transporting coal from the mine to the railway station, reducing the expenses incurred by coal extraction license holders by optimizing the use of the vehicle fleet.

At present the subcontracting market is in its nascent phase: the number of contractors that offer a full set of services at two mines or more is minimal due to high market entry barriers. The expert evaluation of the company and its weight in the industry as well as the necessary volume of investments are among such barriers.

TransFin-M Director General Dmitry Zotov noted that with the assistance of the leasing company the license holder will be able to reduce costs by buying turn-key services — from the mine to the port. In 2016-2017 TransFin-M bought Belarusian vehicles worth a total of over RUB6 billion. In 2017-2018 the company intends to continue buying BelAZ vehicles for the sake of developing the leasing of special vehicles to coal-mining companies.

“The project’s implementation will allow satisfying the growing demand for exported Russian coal while keeping logistic costs in check. The project will also have an integration effect — BelAZ haul trucks will be bought, thus contributing to the advancement of integration processes in the Eurasian Economic Union and to stronger economic ties between the Eurasian Economic Union member states,” noted Dmitry Pankin, Chairman of the Board of the Eurasian Development Bank.

The Eurasian Development Bank (EDB) is an international financial organization. It was established by Russia and Kazakhstan in January 2016 with a view to contributing to the development of the market economies of the participating states, to their sustainable economic growth, and the expansion of mutual trade and economic ties. The EDB’s charter capital stands at $7 billion. The EDB member states are Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia, and Tajikistan.