Russia's multi-billion dollar sovereign wealth fund has announced it is ready to take part in a Turkish-Russian joint investment fund, just hours before presidents of the two countries meet in St. Petersburg.
The state-run Russian Direct Investment Fund (RDIF), which has $10 billion of reserved capital under its management, said in a statement yesterday it expects to sign a joint investment deal with a leading Turkish holding company during President Recep Tayyip Erdoğan's visit to Russia.
Erdoğan met his Russian counterpart Vladimir Putin, in the Russian city of St. Petersburg, for the first time since ties between the two countries deteriorated following the downing of a Russian jet near the Syrian border last November. The statement said the head of the RDIF, Kirill Dmitriev, would also attend the meeting between the two presidents. Dmitriev also met Turkish business people in St. Petersburg to discuss investment opportunities.
The fund said a deal with a Turkish company would generate joint investments worth several hundred million dollars in a number of industries. "There is a possibility of signing hundreds of million dollars' worth of investment agreements with one of the leading Turkish companies at that meeting," the statement said.
The RDIF was established in 2011 under the presidency and prime ministry of the Russian Federation, which attracted over $27 billion of foreign capital into the Russian economy through long-term strategic partnerships, according to the fund's website.
Ankara and Moscow started to work on liberalization of services and investments last year, including a joint investment fund in 2015 but everything was suspended after the downing of a Russian jet in November last year.
The meeting between Erdoğan and Putin is expected to give a boost to economic relations between the two countries.
After the Turkish Air Force shot down a Russian jet that violated Turkish airspace over the Turkey-Syria border last November, relations between the two countries soured, until the issue seemed largely resolved on June 29 through a letter and subsequent telephone calls between the leaders.
Two months prior to the jet crisis, the two countries had set a goal to increase the mutual trade volume to $100 billion by 2023. Energy cooperation, in particular the Turkish Stream pipeline project, and the Akkuyu Nuclear Power Plant project in Turkey are other topics of critical importance expected to be discussed at the meeting.
Russian media reported on July 26 that Russia and Turkey resumed talks on the establishment of a joint investment fund.
The RDIF and Turkey's Renaissance Holding signed an agreement in December 2014 worth $400 million for joint investment in the construction of trade centers and health facilities.