Russian, Italian state funds agree investment deal

Reuters

ROME/TRIESTE, Nov 25 (Reuters) - Russia's state-backedprivate equity investment fund and Italy's strategic stateinvestment fund have agreed a deal to invest up to 1 billioneuros ($1.35 billion) in companies and projects in the twocountries, officials said on Monday.

Fabrizio Pagani, a senior economic advisor for PrimeMinister Enrico Letta, said the Russian Direct Investment Fund(RDIF) would sign the deal with the Italian fund at a bilateralsummit in Trieste on Tuesday.

Under the agreement the two funds will invest up to 500million euros each.

"We're not talking about small businesses but medium andlarge companies," FDIF CEO Kirill Dmitriev told Reuters on thephone.

"It will increase Russian investments into Italy and willhelp fight the idea of Russia as a difficult place to investin," he said.

Dmitriev said the investment platform would involve a widerange of companies in sectors such as engineering, componentmanufacturing and air space.

He said they wanted to make a couple of investments nextyear, adding they did not rule out increasing the investmentplatform further down the road.

The Russian-Italian summit in Trieste, which will beattended by Letta and Russia's President Vladimir Putin, isexpected to focus on finance, energy and industrial issues.

Pagani said the cost of long-term gas contracts, one of thereasons for Italy's high energy prices, would also be discussed.

"Certainly energy security and the need to have equitablegas prices close to market prices will be one of the issues onthe table," he said.

Italy's state-controlled oil major Eni is Russia'sbiggest wholesale gas client and imports natural gas onlong-term contracts that are still in large part linked to highoil prices.

Eni is constantly renegotiating its gas contract portfolioand reached deals with its main suppliers in Russia and Algeriaearlier this year.

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