Japan & Russia launch $1b investment fund

Published: 28 September 2017
The Russian Direct Investment Fund (RDIF) and the Japan Bank for International Cooperation (JBIC) have launched the Russia-Japan Investment Fund (RJIF) following completion of the registration and establishment procedures.

The launch of the fund was announced at the Eastern Economic Forum in Vladivostok in early September and follows a Memorandum of Understanding (MoU) signed in late 2016 where RDIF and JBIC committed $500 million in capital to the fund, which targets investments in sectors that include healthcare, smart cities, energy, and other new technologies.

This new fund also aims to develop industrial and export capacities in the Russian Far East and will consider investments in an array of sectors such as healthcare, chemicals, metals and services. In an official statement, RDIF CEO Kirill Dmitriev said, "The joint fund between RDIF and JBIC's will attract FDI into the Russian economy via collaboration with large Japanese companies and banks.

The Fund's initiatives will not only help to diversify Russian-Japanese trade and economic ties but will also help to develop progressive technologies and further strengthen the identified industries." RDIF, a state fund of Russia, has entered into several investment partnerships with foreign investors, with an emphasis on the development of new technologies being a key strategy as it seeks to leverage upon Russia's strong capacities in the STEM (science, technology, engineering & mathematics) domain as part of its economic development agenda.

In November 2016, the Russia-China Investment Fund (RCIF), an affiliate of the RDIF and Chinese organisation TUS Holdings established a joint venture fund. Meanwhile, Rosneft, Russia's largest oil & gas major, is boosting investment in the resource-rich region, with the firm planning to engage in geological surveys to as it expands its mining footprint in the region, given the regions significant resource potential.

The Russian Far East contains huge deposits of untapped petroleum, coal, and other mineral resources that await economic development, which are complementary to other sectors in the long term.

Source: Deal Street Asia