1.3. Investment Projects: Priority Undertakings of the Corporation
About company
Documents
Annual report 2008
Report on Activities
1.3.1. Types of Projects Considered by the Corporation
The main tasks RUSNANO carries out are the selection of nanotechnology projects, refinement of those projects to the stage of commercialization, and their commissioning for production.
The corporation assesses and finances the following types of projects:
- Manufacturing projects—investment in the establishment or dimensional scaling of production of saleable output in the nanotechnology sphere (that is, creation of new or expansion or modernization of existing manufacturing of nanotechnology industry goods). They are financed on principles of payback and return on investment
- Infrastructure projects—investment in objects that are directly responsible for the rate of growth and effectiveness of the nanotechnology industry. In particular, these are objects for production of raw materials and semi-finished goods for implementation of nanotechnology; the creation of innovative-technological centers (business incubators, consulting centers, and similar facilities) and technological parks; establishment of information (bases for data and knowledge, information centers) and regulatory and legal (intellectual property, standards, certifications) bases for the nanotechnology industry; participation in non-commercial funds and other projects to create essential infrastructure for effective development of nanotechnology production
- Projects in scientific research and experimental-design development—investment in bringing the conception of ideas and scientific research developments to technology and to a state in which they are prepared for use in industrial projects
- Educational projects—investment in the establishment and functioning of training centers and programs to guarantee essential staff potential for the development of science and technology bases and the creation of nanotechnology production.
As provided in the corporation’s strategy, in the mid-term a leading role is given to manufacturing projects, laying the foundation of Russia’s nanotechnology industry and creating the essential initial conditions to attract private investments to nanotechnology projects.
1.3.2. Status and Conditions Affecting Inquiries for Project Financing
Criteria and methods of financing investment projects, conditions for the corporation’s participation in them, and means of managing projects throughout their terms are formalized in RUSNANO’s regulatory documents. Of primary importance are Methods and Conditions of Scientific Research and Experimental Design Development in Nanotechnologies, Projects in Nanotechnologies Envisioning Introduction of Nanotechnologies or Product Production in the Nanoindustry, and Projects for Training Specialists in Nanotechnologies (hereafter, Methods and Conditions), and Requirements for Composition and Content of Projects in Nanotechnology Put Forth for Financing with Resources of State Corporation RUSNANO (hereafter, Requirements).
In accordance with Requirements, documents for projects received by the corporation may hold one of the following statuses, depending upon the completeness and quality of material presented:
- Approach—information about the project submitted in free form
- Proposal—incomplete packet of documents on the project; minimum requirements include a petition for consideration of the project, a project passport and the applicant’s inquiry form prepared in accordance with requirements of the corporation
- Application—a complete packet of documents on the project prepared in accordance with requirements of the corporation and presented in established order for consideration (conduct of expert and decision-making regarding financing)
The umbrella term used within the corporation to designate incoming documents on a project, irrespective of their completeness and quality is Request for Project Financing (hereafter, request).
One may imagine the full cycle of the corporation’s project operations in the form of a chain: identification-reception—request (approach-proposal-application)—project—operating enterprise—exit of the corporation from the enterprise.
Procedure for consideration of requests at RUSNANO, irrespective of how they entered—autonomously or through efforts by specialists in the corporation’s investment block—involve the following stages:
- Entry review/entry expertise
- Elaboration of materials in the request to a level responsive to demands and rules of the corporation to the status of Application
- Denial or acceptance of the request/Application for official procedures of evaluation for preparation of comprehensive findings
- Passage through official procedures of conformance/approval at meetings of management bodies of the corporation
In accordance with regulations on the Supervisory Council of the corporation, the Supervisory Council makes decisions concerning project financing when the amount of investment with resources of the corporation equals or exceeds one percent of the book value of the shares of the corporation at the last reporting date. Decisions at less than one percent of book value are made by the Executive Board after preliminary review of the project and with positive finding from the Science and Technology Board of the corporation.
1.3.3. Requests for Project Financing and Results of Their Assessment
As of December 31, 2008, the corporation had received 811 requests for project financing. The budgets of these projects totaled 709 billion rubles (including 546 billion rubles, 77% of combined project budgets, from resources of the corporation).
The geography of requests received is quite broad and in sum corresponds to the geographical distribution of Russia’s basic science and production centers and to regions with which the corporation has established closer ties. Requests during 2008 were received from applicants in 115 cities of Russia and the world.
The greatest concentration of requests was received from the following Russian regions: Moscow—31%, St. Petersburg—9%, Novosibirsk—6%, Korolev—5%, and Chelyabinsk, Samara, Tomsk, and Kazan—3% each, and Yeketerinburg, Voronezh, Irkutsk, and Troitsk—2% each. These data are reflected in figure 1.
Fig. 1. Distribution of requests by cities in the Russian Federation
The corporation received 40 requests, nearly 5%, from 15 foreign companies. These were distributed as follows: Israel—13, United States—8, Armenia—5, Germany—3, and one each from Belarus, Great Britain, Hong Kong, Italy, Kazakhstan, Kyrgyzstan, Lithuanian, Netherlands, Taiwan, Tadzhikistan, and Uzbekistan. These data are reflected in figure 2.
Fig. 2. Distribution of requests by foreign country
Of all requests received, more than 50% were requests for status Approval. The average budget of these requests was 590 million rubles, a sum considerable below that for requests in statuses Application and Proposal. These two categories totaled 1.2 billion rubles. Moreover, the need for financing from resources of the corporation cited by applicants for status Approval was 96% of budget, whereas applicant requests in statuses Application and Proposal were for around 60% of budget.
These numbers demonstrate that requests for status Approval are often merely general descriptions of ideas which frequently have not undergone development work nor research engineering nor market analysis nor financial-economic forecasting; applicants have not sought potential co-investors. The work of the group of managing directors for investment activity for such requests is channeled, foremost, toward quality refinement of the scientific-technological bases with follow-up development of a business model and evaluation.
It is worth noting that in the last three to four months of 2008, the flow of requests stabilized at a range of 40 to 45 requests per month. Nonetheless, initiative coming from applicants themselves continues to play a considerable role, accounting for up to 50% of requests.. Meanwhile, the first benefits can be seen from the corporation’s activity to seek out potential applicants and jointly develop requests—in the fourth quarter of 2008, these numbered four to five per month.
1.3.4. Results of Work with Requests to Finance Manufacturing Projects
Requests for project funding to create production receive priority attention from the corporation. Such requests, as a rule, are characterized by a high degree of justification and development work.
As of December 31, 2008, such projects numbered 232. Their budgets totaled 379 billion rubles of which 242 billion rubles was budgeted from resources of the corporation. Of note here is that the share of this type of project in the general number of requests addressed to the corporation is rising continually—from 14% to 15% of the cumulative total at the beginning of the year to 28% at the end of 2008; during the fourth quarter of 2008, its share exceeded 40%.
Among production project applications, several high-technology sectors stand out: energy and electronics comprise 16%, medicine—15%, machine building—14%. These and other sectors are presented in figure 3.
Fig. 3. Distribution of requests to establish production, by sector
Thus over the course of 2008, state corporation RUSNANO succeeded in gradually raising the share of requests for production projects to 28% of the total number of queries it received.
1.3.5. Results of Work with Requests to Finance Scientific Research and Experimental Design Projects
RUSNANO carries out financing of scientific research and experimental-design developments in nanotechnology with the goal of bringing ideas and scientific research developments to a technological state wherein they are prepared for use in industrial projects. This occurs when:
- Experimental-design developments reach a culmination stage and may be presented for the first phase of an industry-oriented project; and
- Scientific research and experimental-design developments are an inseparable stage of development within the framework of a production project
In 2008 the corporation adopted a resolution to extend financing to scientific research and experimental-design projects only within the framework of realizing industrial projects Project: are presented in table 1.
| Project | Project budget, bln. rubles |
Share of SR and ED, mln. rubles |
Share of SR and ED in project budget, % |
| Establishment of commercial production of high-precision aspherical optical elements | 0.762 | 176.5 | 23.16 |
| Production of a new generation of environmentally clean and energy-saving lighting technology based on nanotechnology | 3.351 | 431.0 | 12.86 |
| Development, design, and construction of the BETA science and industry complex for production of medical-technical products | 2.692 | 62.9 | 2.34 |
| Establishment of a business to produce solid carbide tools with multilayer nanodstructured coatings | 1.000 | 13.4 | 1.34 |
1.3.6. Results of Work with Requests to Finance Infrastructure Projects
The corporation’s infrastructure projects promote the formation of scientific, innovative, financial, and industrial infrastructure for the country’s nanotechnology industry. The primary goals of the corporation in infrastructure activity is to create conditions for the generation of new projects, development of small innovative companies, and encouragement of nanotechnology applications in company operations.
Special attention is paid to forming a network of key elements of innovative infrastructure or phasic projects (NanoFabs).
In furtherance of its goal of forming a NanoFab network, in 2008 RUSNANO inventoried centers of collective use and based on that work formed a list of pilot projects that are to be released in 2009.
As part of the plan to develop financial infrastructure for the nanotechnology industry, RUSNANO participated in founding a closed-end mutual fund for particularly risky (venture) investments, the Skolkovo-Nanotech fund. In 2008 preparations were made for approval by the Supervisory Council of the corporation of the project Organization of a Storehouse-Catalog of Chemical and Biochemical Reagents. This project’s realization will reduce barriers to generation of innovative developments and creation of innovative products in public health and biotechnology, and lower costs of companies producing drugs, vaccines, and diagnostic equipment. Additionally, implementation of the project will encourage greater activity from Russian producers of chemical and biochemical reagents. Expert evaluations for the projects Creation and Marketing of an Analog Integrated Circuits System and Establishment of a Center to Develop Technology for 3D Assembly with Production of Electronic Materials and 3D Articles were also begun in 2008.
As of December 31, 2008, the company had registered 25 queries for realization of infrastructure projects. Of this number, 11 were in statuses Application and Proposal.
1.3.7. Summary Results of Evaluation and Approving Projects
Over the course of 2008 based on orders from the general, director, 91 projects with total budgets of 142 billion rubles (including 91 billion rubles from the corporation’s resources, 64% of the total budgets for the projects) were subjected to official expert evaluation procedures, reconciliation, and approval. (Figures are reported as of December 31, 2008.)
| Status of projects | Number |
Budget, bln. rubles |
Including resourses of the corporation, bln. rubles |
| All requests for project assessment | 811 |
708.9 |
546.3 |
| Of which: |
|||
| - requests with status of Approval | 417 |
245.4 |
236.0 |
| - request with status of Application or Proposal | 394 |
463.5 |
310.3 |
| Including: |
|||
| - Educational projects | 10 |
4.0 |
2.1 |
| - Infrastructure projects | 11 |
23.9 |
14.0 |
| - Research and Development | 141 |
56.2 |
51.9 |
| - Industrial projects | 232 |
379.4 |
242.3 |
| Projects in official assessment (per order of the general director): | 91 |
141.6 |
90.5 |
| Approved by the Supervisory Council/project initiated | 7 |
10.3 |
5.5 |
| Approved by the Science and Technology Board | 7 |
33.7 |
20.8 |
| Passed investment expert evaluation (no plans to bring to the Supervisory Council or Science and Technology Board) | 1 |
0.1 |
0.1 |
| Passed investment and science and technology expert evaluation ( to be brought to the Supervisory Council) | 5 |
9.9 |
3.8 |
| Passed science and technology expert evaluation, currently in investment expert evaluation | 21 |
22.8 |
13.4 |
| Undergoing science and technology expert evaluation | 19 |
23.4 |
14.3 |
| Projects in refinement as result of expert evaluation | 24 |
20.7 |
13.8 |
| Projects denied | 7 |
20.7 |
18.7 |
During 2008 the corporation conducted all required expert evaluations and received corresponding resolutions/ reconciliations from management bodies of RUSNANO for approval of seven projects (six investment projects and one educational project) in an amount totaling 10.3 billion rubles, including resources of the corporation of 5.5 billion rubles. Financing was already begun during the reporting period for two projects: Establishment of Commercial Production of High-Precision Aspherical Optical Elements and Establishment of a Business to Produce Solid-Carbide Tools with Multilayer Nanostructured Coatings in amounts of 182 million rubles and 16.7 million rubles, respectively. During the first half of 2009, after conducting all required procedures to execute the transactions and form project companies, the corporation will begin financing and practical realization of approved projects.
In addition, in 2008 the corporation created a reserve of projects at various stages of assessment and preparedness. This demonstrates that the corporation has completed forming the system of selection from requests for financing projects to approval from the Executive Board and Supervisory Council of RUSNANO.
To summarize 2008, seven projects received positive findings from expert evaluations and the Science and Technology Board. Their budgets totaled 33.7 billion rubles, including 20.8 billion rubles apportioned from resources of the corporation. These projects are all scheduled to be brought to the Supervisory Council for its approval during the first and second quarters of 2009. An infrastructure project, Organization of a Storehouse- Catalog of Chemical and Biochemical Reagents, is prepared for the Supervisory Council’s consideration in the first quarter of 2009. Its budget totals 84 million rubles and includes resources of the corporation of 45 million rubles.
Twenty-six projects with budgets totaling 32.7 billion rubles of which 17.2 billion rubles are budgeted from resources of the corporation comprise the reserve of projects that have received positive findings from science and technology expert evaluation. They make up the portfolio of projects that will be brought to the Science and Technology Board for its assessment, primarily in the first and second quarters of 2009. Five of them (with total budgets of 9.9 billion rubles of which 3.8 billion rubles are budgeted from resources of the corporation) have not only received positive findings from science and technology expert evaluation but have also completed investment expert evaluation. These projects, if they obtain positive findings from the Science and Technology Board, may be readied as the first order for the Supervisory Council’s assessment.
The portfolio of projects at the stages of science and technology expert evaluation and post-evaluation refinement is also significant. Those projects number 43 with budgets totaling 44.1 billion rubles of which 28.1 billion rubles are budgeted from resources of the corporation. Bearing in mind that planned terms for conducting science and technology expert evaluation usually do not exceed 50 days, it is possible to plan project flow for assessment of more than 20 projects by the Science and Technology Board at the end of the first and during the second quarters of 2009.
1.3.8. Brief Description of the Investment Projects Supported by the Corporation in 2008
Project: Commercial production of high-precision aspherical optical elements
Project Goals:
- To establish commercial production of high-precision aspheric optical elements to help reduce the number of components in complex optical systems while providing better image quality
- To move from manual production of aspheric elements to automated production
Under the project’s first phase (duration 30 months, budget 13 million euro of which 8.66 million euro are to come from the corporation), a pilot production line will be established with diamond grinding and sanding machines with machining precision of 10-20 nanometers on a part diameter of 150-200 mm. The second phase (duration 20 months, budget to 8.6 million euro) covers start-up of commercial production of aspheric optical elements.
Project Products:
The main products of the project will be the following:
- Infrared optical elements (manufactured by direct diamond grinding)
- Metal mirrors (manufactured by direct diamond grinding and buffing)
- Aspheric elements (manufactured by grinding and fine sanding/polishing)
- Laser mirrors (manufactured by grinding and fine sanding/polishing)
- Super smooth precision aspheric mirror substrate for the ultraviolet and X-ray wavelength range (manufactured by grinding and fine sanding/polishing)
Project Benefits:
- High quality at a cost of about 75% of the market price
- Custom manufacturing of small batches of the product
- Reduction in manufacturing time by 30% compared with existing processes
- Precision to ±10 nm; surface roughness of 1-5 Å
The Supervisory Council of RUSNANO approved the project on May 29, 2008.
Project: Business to produce solid-carbide tools with multilayer nanostructured coatings
Project Goal:
- To establish commercial production of solid-carbide metal-cutting tools with nanostructured coating
The project will establish Novye Instrumentally Resheniya, a closed joint-stock company. The corporation’s partners in the project are Saturn and Gazprombank. Total investment is one billion rubles of which 0.5 billion rubles will be provided by the corporation.
Kurchatov Institute will be developer of engineering design blueprints for process equipment and intellectual property owner of the coating application technology. The project involves transfer of intellectual property to the new company.
The manufacturing facility will be located at the Saturn production site in the city of Rybinsk, Yaroslavl Oblast.
Project Product:
The primary products of the new facility will be solid-carbide tools for machining aircraft engine parts, such as cutters, drill bits and broaches.
The company plans to make as many as 850,000 tools per year. Saturn will be a significant customer for the plant’s products. The remainder of the output is expected to be supplied to Russian aircraft engine manufacturers and, potentially, to international markets.
Project Benefits:
- Meet demand from the machine-building sector for Russian-made point tools with a two to 2.5 times potential increase in life cycle and machining rate compared with uncoated or imported tools
- Reduce the cost of Russian-made carbide-tipped point tools relative to foreign-made tools
- Meet the defense industry’s demand for special purpose tools at the cost of universal tools
The Supervisory Council of RUSNANO approved the project on August 11, 2008.
Project: International master’s education program, Nanodiagnostics, Metrology, Standardization and Certification of Products in Nanotechnology and the Nanotechnology Industry
Project Goals:
- To form a databank of educational programs with packets of teaching methodology materials for a master’s level curriculum
- To refine the educational process for training highly qualified specialists to prepare staff for research and development projects in nanometrology and nanodiagnostics
The budget for project implementation is 13.1 million rubles of which 11.2 million rubles is to be invested by the corporation. The Moscow Institute of Steel and Alloys will co-finance 1.9 million rubles.
Project Product:
Beginning in 2010, the program will graduate highly qualified specialists in nanodiagnostics and nanometrology (master’s degree level) whose training is based on the integration of intellectual, educational, and material/technical resources from Russia’s leading universities in the field and the ongoing participation of prominent foreign specialists who will teach proprietary courses.
Project Benefits:
- Skilled specialists in the fields of nanodiagnostics, metrology, standardization, and certification of nanotechnology and nanotechnology industry products
- Graduates to meet the human resource requirements of the network of certification centers (critical to development and functioning of the national nanotechnology industry) and specialists capable of monitoring and forecasting environmental and other impacts of nanotechnology application
The Supervisory Council of RUSNANO approved the project on September 25, 2008.
Project: Commercial production of micro sources, microspheres, and components for administering brachytherapy
Project Goal:
- To produce high-tech medical nanoproducts, including nanostructures for brachytherapy applications and for delivering medications and isotopes for broad-based application of non-invasive treatment methods (brachytherapy)
Project initiators are companies demonstrating dynamic growth in the medical services and equipment markets. They are major suppliers and designers of high-tech equipment for isotope applications and new cancer treatment methods, including brachytherapy.
Investment is estimated at 0.9 billion rubles of which over 0.6 billion rubles is to be provided by the corporation. The project will run from 2008 through 2014.
Project Product:
The project will create domestic manufacturing capacity and produce micro sources based on iodine-125 and implantable medications using nanostructured microspheres for treating prostate, liver, and pancreatic cancers.
Project Benefits:
- High social value and economic benefits from work to establish a high-performance process for treating cancerous diseases
The Supervisory Council of RUSNANO approved the project on September 25, 2008.
Project: Development, design, and construction of the BETA Science and Industry Complex for production of medical equipment for cascade plasmapheresis using track membranes
Project Goal:
To construct the BETA Science and Industry Complex for production of track membranes, Rosa-N plasmafilters, and Gemofeniks-K systems for administering cascade plasmapheresis.
Investment in the facility’s construction and start-up (preinvestment and investment stages) is approximately 2.7 billion rubles of which the corporation’s contribution is 1.3 billion rubles.
Project Product:
A closed-loop, full-cycle processing facility meeting all Russian and international medical equipment production specifications and quality standards. The project will facilitate commercial-scale production of ultrafiltration track membranes with a nano-range pore diameter (20 nn to 100 nm), plasmafilters on their basis, and units for applying therapeutic and donor cascade plasmapheresis.
Project Capacity:
- Production of up to 1.6 million plasmafilters and 1,500 units per year
Project Benefits:
- Satisfy high demand from hospitals for state-of-the-art, high-performance therapeutic and donor plasmapheresis systems
The Supervisory Council of RUSNANO approved the project on November 6, 2008.
Project: Solid-body lighting technology: environmentally clean and energy-saving new-generation lightning equipment based on nanotechnology
Project Goal:
- To establish high-tech commercial production of new-generation lighting systems using gallium nitride semiconductor chips
Project Participants:
- ONEXIM Group. The company invests in the mining and metallurgy sectors, real estate and finance, innovative energy, and nanotechnology projects.
- Yalamov Urals Optical-Mechanical Plant. Yalamov Urals is Russia’s major designer and manufacturer of optical electronic systems for all branches of the armed forces and law enforcement agencies. It also produces a wide range of civilian instrument products.
- RUSNANO
The project requires investment of 3.4 billion rubles. The corporation’s share is 1.8 billion rubles—0.3 billion rubles in the form of authorized capital contribution and 1.5 billion rubles to be provided as a loan.
Project Product:
The new company will produce LED chips, LED bulbs and lighting systems with brightness comparable to the world’s top products. The record-low semiconductor layer defect rate, achieved through a unique process, enables the devices to operate without any loss of performance with high current densities, delivering a high brightness-to-price ratio for LED chips.
Project Benefits:
The project offers significant macroeconomic benefit:
- Significantly reduce power costs and light-engineering product operation costs for industrial and residential users
- Free up power generation capacity
- Remediate the problem of disposing of existing lighting systems that contain hazardous materials
- Help to move the Russian economy toward an innovation-based model
The Supervisory Council of RUSNANO approved the project on November 6, 2008.
Project: Establishment of the Skolkovo-Nanotech Closed-End Mutual Fund for Venture Investments
Project Goals:
- To establish the Skolkovo-Nanotech closed-end mutual fund for venture investment. The Moscow School of Management SKOLKOVO will raise one billion rubles in co-investor funds. The total value of the fund will be two billion rubles. Troika Dialog will manage the fund.
- To close the considerable gap between a business idea and its implementation as an investment project.
- To involve students and faculty of the Moscow School of Management SKOLKOVO in business planning and pre-investment development of the most promising projects sent to the fund. They will work under the guidance of project managers and educators.
- To combine the corporation’s educational and investment objectives into a single project.
Project Benefits:
- The fund model is unique in the exclusive nature of the agreement between the investors, the business school, and the fund’s management company, under which return on investment for private investors will be generated at minimum established profitability, while the difference between actual return and minimum established profitability will be invested in the development of Moscow School of Management SKOLKOVO.
- The fund will focus on opening the commercial potential of Russian nanotechnology, generating high return on investment for the fund’s investors, and improving the quality of business school training in innovation management and organization of effective practices.
The Supervisory Council of RUSNANO approved the project on December 18, 2008.
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