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  Wednesday, June 3, 2020
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Russia and Venezuela have signed a memorandum on setting
Russia and Venezuela have signed a memorandum on setting up a joint development bank with starting capital of $4 million.

With Venezuelan President Hugo Chavez and Russian Deputy Prime Minister Igor Sechin in attendance, documents were also signed on the mutual promotion and protection of investments, on a joint venture involving Russian aluminum giant RusAl to build a production facility in Venezuela, and on cooperation in the automobile industry.

Gazprombank, the banking arm of energy giant Gazprom, will be the Russian participant in the development bank venture. Gazprom started exploratory drilling for gas in Venezuelan waters on Friday.

The head of international relations at Russia's Finance Ministry, Konstantin Vyshkovsky, said the bank would finance projects in Russia and Venezuela, and could be involved in payments for oil deliveries.

He added that the global financial turmoil meant it was a good time to create such a bank, which could even begin work sooner due to the crisis.

RusAl and its Venezuelan partner will each own 50% of the joint venture, and the Russian aluminum giant's director of international development, Alexander Livshits, brushed off concerns over financing due to the financial crisis.

"Crises come and go, but RusAl remains," he said at the signing ceremony.

The biggest problem, he said, would be electricity supplies, but that would be solved by building a new power plant.

Sechin said at the ceremony that the deals could not be done without the support of the governments of Russia and Venezuela.

Relations between the two countries have become increasingly close over recent years, with billions of dollars of Russian arms sales leading to military cooperation and broader economic ties, and Chavez's opposition to U.S. dominance regionally and globally meshing with Russia increasingly flexing its muscles on the world stage.

Chavez hails his country's "strategic" ties to Russia and Russian President Dmitry Medvedev is expected to visit Venezuela later this month.


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