Q: The Belarusian government plans to raise the total level of annual investment in the economy to $25bn, up from the current $12bn. How are you going to do that?
A: Some 40% of the increase would come from private and public companies and their capital expenditure plans. This will require the restructuring of a number of state-owned enterprises (SOEs).
In this regard, the responsibility for some 300 state-owned SMEs will be devolved from the national level to the regional and local level. We are also preparing a list of SOEs where the state owns less than 25% of their equity – there are about 600 of them. The goal is for the state to sell those stakes to private investors. And a third direction entails the privatisation of larger SOEs.
Q: Which SOEs would these be?
A: Together with the EBRD we have compiled a list of potential companies according to some specific characteristics – they have to have many people on the payroll, they should be diversified and already modernised. Also, we are talking of companies that may face difficulties in meeting their debt obligations – so for them it will be important to be put through this sort of turnaround in management. We thus identified five companies: construction materials firm Krasnoselskstroimaterialy, national beer brewer Krinitsa, wood company Mostovdrev, textile firm Blakit, and the local branch of railway rolling stock company Stadler.
Q: Which other ways are you going to increase the investment level in the economy?
A: It is going to come from major infrastructure and industrial investments, and from expanded co-operation with the international financial institutions. We expect our portfolio with the EBRD, World Bank and European Investment Bank to grow by at least three times its current level. We can already look to the construction of a new $1.4bn potassium production facility financed by a credit line from China, and we are also building a large factory that will produce amino acids in conjunction with a Russian biotech corporation.
Q: The government estimates that Belarus’s infrastructure gap is as high as $60bn…
A: That’s the maximum figure we estimated. But to maintain infrastructure at a safe level across the economy, this requires investment to the order of an extra $15bn.
Q: In this respect, what are your ambitions in terms of developing a PPP programme?
A: There are large transportation projects worth about $500m. The second important area is healthcare, to build ecological centres and modern medical facilities for foreign citizens, each with a price tag of $300m. And the third area is social infrastructure, with projects that cost about $50m.
Q: The M10 highway PPP project being developed with the EBRD. When do you expect to sign a contract?
A: We are working towards a two- or three-year horizon. We expect to give a powerful message to investors with this project. We are already receiving proposals from investors as we speak.