Russia’s RDIF Proposes Russian-International Arctic Investment Fund

The Russian Direct Investment Fund (RDIF) has proposed creating a new investment fund together with Russian and international development institutions, banks, pension funds and foreign partners to support the implementation of projects in the Arctic, according to Kirill Dmitriev, the RDIF CEO, and Russian Special Representative for Investment and Economic Cooperation with Foreign Countries.

He was speaking at a joint meeting of the Russian State Council’s commissions as part of the Arctic: Territory of Dialogue international forum and said:

“We see three main elements that are important to the Arctic region’s development. These are infrastructure, technologies and financing mechanisms. As regards infrastructure, this includes both ports and key logistics hubs. They are currently being developed. Infrastructure for deposits is also important. In principle, we would propose creating an individual Arctic Infrastructure Fund or a separate Arctic Investment Fund to support such projects.

In our opinion, a large number of them could also be implemented through concession mechanisms, because Russia has one of the best concession bases in the world, it has proven its efficiency as regards toll roads, other elements of infrastructure, in the Northern Sea Route concession principle and other infrastructure projects with our investment support. We believe that they can attract significant financing. Certainly, technologies are highly important. And we have a large number of breakthrough technologies including both in geological exploration, advanced processing of raw materials. It seems to me that an Arctic Investment Fund could support technologies that are crucial to the region’s development.

Investors will be both RDIF and, I believe, also other development institutions of Russian banks. It is possible to create lots of very interesting investment products for our pension funds. Their participation certainly allows them to offer our pensioners good investment products, which are safeguarded against inflation, and consequently makes it possible to raise funds for development.

But it is also international partners, sovereign wealth funds of different countries, which are highly interested in the development of the Northern Sea Route and the Arctic. And everyone understands that due to global warming, which certainly needs to be addressed but which nonetheless continues, the prospects of the Northern Sea Route are becoming extremely interesting for all global investors.

We believe that it is necessary to start with Russian co-investors. No doubt, Russian co-investors should have control. But our partners, such as sovereign wealth funds and other investors from other countries, may be invited to acquire non-controlling stakes or as debt financing.”

The timing of Dmitriev’s comments is interesting, as the US President Donald Trump has also expressed interest in potential US investment in the Arctic, including the possibility of joint agreements with Russia. The United States is an Arctic nation and is also showing interest in acquiring Greenland.