The Far East Development Fund, a Moscow-mandated financial institution, is partnering with China's State-owned enterprises to create two joint investment funds to tap into the rich but still underdeveloped eastern part of Russia, according to the fund's chief.
The two funds, which are expected to be set up, would aim to provide financing for gold and copper mining, as well as infrastructure and real estate projects in Russia's far east region, said Alexei Chekunkov, chief executive officer of FEDF.
"We have tied up with China's State-owned companies in gold mining and construction, and we hope to sign the deals in May," he told China Daily during the Boao Forum for Asia in Hainan province last week.
Both funds are expected to raise $10 billion each, and each already had $1 billion in place, allowing them to be operational in this year, he said.
The new funds would follow the Russian-Chinese Fund for Agro-Industrial Development, which inked deals with Russian food companies in September to export processed food to China.
Russia's mechanisms for developing its far east, including the FEDF and Advanced Development Territories, had attracted 16 billion yuan ($2.3 billion) worth of Chinese investments to the region by mid-2016, Russian Far East Development Minister Alexander Galushka said last year.
According to Chekunkov, Chinese investment accounted for three quarters of foreign investment of total capital injection so far in the far east region. But he said the potential was many times bigger, especially in light of the Belt and Road Initiative put forward by President Xi Jinping.
"The Belt and Road Initiative would serve as a guidance and unlock the full potential of Chinese companies to reach out to economically viable international projects and they are mutually beneficial," he said.
Chekunkov said he applauded the initiative as "the most important international agenda" launched by China.
"The initiative is absolutely international and multidimensional, bringing many economies－not necessarily along the route－to the table," he said.
Russia's far east will also have its own stock exchange in 2017, which would among other things attract venture capital from Asian countries, Chekunkov said.
