Investments and Infrastructure Key Taskforce Priorities Presented by Kirill Dmitriev CEO, Russian Direct Investment Fund 13 December 2012

Taskforce Priorities: Building on Los Cabos Legacy B20 “Trade and Investments” recommendation to Los Cabos G20 in 2012: – “The G20 should reiterate its support for open, cross-border investment as an essential contributor to growth, development, and job creation and take concrete steps to advance an international investment agenda.” Key priorities for “Investments and Infrastructure” taskforce: – Facilitation of joint cross-border investments – Support of multilateral infrastructure projects – Improvement of global investment climate – Identifying measures required to increase attractiveness of “Green Investments” – Defining role of G20 governments and international organizations in promoting joint investments and infrastructure projects – Not just free trade, but also free flow of investments

Sources: BCG report – The Global Infrastructure Challenge 2010, EY report – Infrastructure 2011 – A Strategic Priority High Demand for Infrastructure Spending to Drive Economic Growth Water and wastewater - 55%; Power – 22%; Road and rail – 19%; Airports/seaports – 4% US/Canada/ Latin America  $6-6.5 trillion

Cross-Border Infrastructure Development with an Emphasis on Emerging Markets Global economy is looking for a growth-stimulating strategy Global infrastructure initiative could have a profound impact on economic growth Economic and social returns on infrastructure investments are usually higher in developing countries, which have become increasingly important drivers of global growth At the same time, implementing infrastructure projects requires large scale capital equipment, many of which is largely produced by developed countries Scaling up infrastructure investment in developing countries could therefore help generate a virtuous cycle in propelling global recovery Source: Beyond Keynesianism. Global Infrastructure Investments in Times of Crisis. The World Bank, January 2012

Identifying Measures to Support Green Investments In 2011 global investment in renewable power and fuels increased more than six times and reached a new record of $257bn – Developing economies made up 35% of this total investment, compared to 65% for developed economies Implementation of certain regulatory measures, such as the “green tariff” is still required to support investment inflow and development of this industry However, investors continue to perceive “Green energy” investments as risky Focus on generating attractive returns is essential for attracting new investments to the sector Growth in “Green energy” sector could become a catalyst for development of high-tech sectors, such as: microelectronics, biochemistry, nanotechnologies, etc. Sources: UNEP Collaboration Centre; Global Trends in Renewable Energy Investment in 2012

Role of G20 Governments and International Organizations in Promoting Joint Investments Building strategic partnerships between countries to create platforms for joint investment and exchange of technologies and expertise Improving international legislation essential to facilitate cross-border investments Participating of international organizations will give clear sign to investors that such initiatives are relevant and reliable Supporting joint infrastructure investment projects as vehicles of economic growth and job creation

Further Work Should be Based on Previous B20/G20 Achievements Improve access to funding, through the strengthening of local intermediaries and financial markets and more effective use of capital Create environment for private and public infrastructure financing, especially for regional projects Support the development of local production capacities Encourage a broad dialogue on emerging international investment issues, such as dispute settlement in international investment agreements and the rising importance of international investments by state-owned enterprises Create a G20 working group on investment to identify issues, impact, and key action areas and should report back to the next G20 Summit in Russia in 2013 Produce a study of existing investment practices in G20 countries and of the corollary economic impact of such practices InvestmentsInfrastructure Economic Growth

Promoting the Concept of Free Investments “The G20 is to become a venue for elaborating fair rules for the sustainable development of the entire global economy. The intercontinental nature of the global economy, where all states depend on each other today entails the global nature of responsibility – for the world’s leading economies first and foremost… … I stress in this respect that we must remove the barriers not only for trade but also for reciprocal investment and for carrying out big transnational projects involving exchanges of assets and technology. We are open for projects of this kind and for foreign investment, including in strategic sectors, but this must be a reciprocal process, a flow in both directions… …We think that free movement of investment between countries, along with free trade, could be a catalyst for economic growth at this time of global economic difficulties. We must work together to make effective use of the development opportunities it offers.” Vladimir Putin, President of Russian Federation St. Petersburg International Economic Forum,

Key Priorities for “Investments and Infrastructure” Taskforce Facilitation of joint cross-border investments Support of multilateral infrastructure projects Improvement of global investment climate Identifying measures required to increase attractiveness of “Green Investments” Defining role of G20 governments and international organizations in promoting joint investments and infrastructure projects Not just free trade, but also free flow of investments