By RIA Novosti,
Caracas : Russia and Venezuela have signed a memorandum on setting up a joint development bank with a starting capital of $4 million as part of an expanding economic and trade ties between the two countries.
Agreements were also signed on the mutual promotion and protection of investments, a joint venture involving Russian aluminum giant RusAl to build a production facility in Venezuela, and cooperation in automobile industry.
Venezuelan President Hugo Chavez and Russian Deputy Prime Minister Igor Sechin were present during the signing of the agreements.
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 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.
The two partners will each own 50 percent stake in the joint venture.
RusA1’S director of international development, Alexander Livshits, brushed off concerns over financing due to the ongoing market crisis.
The biggest problem, he said, would be electricity supplies, but that would be solved by building a new power plant.
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 with the Latin American country.