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2 Jun, 2009 18:32

Rusnano brings innovation to financing

Leading the move towards creating an innovative economy became tougher for Rusnano as investment capital began drying up. But the state run engine of local innovation is looking at diversifying its sources of finance.

The government, which provided over $5 billion in capital for Rusnano in 2007, has cut investment by over 60% since the beginning of the crisis.

The state corporation, designated as the engine of innovation for the Russian economy, now wants to diversify its sources of capital and is looking at the loan market.

It made the first step on Tuesday, gaining a credit rating from Standard and Poor's rating agency. Rusnano Financial Director, Svyatoslav Ponurov, says the move will making attracting capital easier.

“This year we are investing $1 billion. There are 14 approved projects that are ready to be realized – and we will have $500 million for the next year. With the S&P rating it will be easier for the company to attract capital.”

The firm's double B minus rating from Standard and Poor's is derived from Russia's sovereign rating, with Rusnano the first non-banking government corporation to seek such a rating, according to Aleksey Novikov Managing Director of S&P Russia.

“The Rusnano corporation will have support from Russian government and that's why the rating will fluctuate together with Russia's sovereign rating.”

The rating may make it easier for the state owned corporation to find additional loan capital. But that strong peg to the government is a double-edged sword. Rusnano is most likely to need loan funds when the government is under financial pressure – and that's the time when Russia's rating is likely to be under pressure.