The Russian-based development bank International Investment Bank (IIB) has launched a new project to promote the pharmaceutical industry’s development in Russia and Hungary, the bank said in a press release on March 13.

“IIB signed an agreement on the issuance of counter-guarantees for up to RUB1.5bn for a key medicine distributor, one of Russia’s market leaders in the sector – Pharmaceutical Company PULSE LLC. The documentary line is established in favour of the OTP-Bank (Hungary), which guarantees Russian company’s payments for the supplies of medicine produced by a number of large Hungarian manufacturers,” IIB said.

The duration of the guarantee credit line is two years and the bank says the list of beneficiaries could be expanded by including pharmaceutical companies from other IIB member states.

Set up in Soviet times to foster cooperation and trans-border investment amongst the Comecon countries, IIB has been remaking itself as a modern International Financial Institution (IFI) and the transition programme officially came to an end and the close of 2015. Headquartered in Moscow, five out of the nine shareholders are EU members. The current members include Bulgaria, Cuba, Czech Republic, Hungary, Mongolia, Romania, Russia, Slovakia and Vietnam.

“The improvement of the population’s living standards in the IIB shareholder countries is to a great extent related to the development of such flagship economic sectors as pharmaceuticals. The agreement is aimed at support of Russian and Hungarian pharmaceutical industry, Deputy Chairman of the IIB Board, Denis Ivanov, commented. “In addition, a significant integration effect of the deal is of great importance. It guarantees high quality of medicine for the Russian consumers due to IIB’s cooperation with one of the industry’s leaders, as well as the expansion of Russian-Hungarian trade relations and an increase in production of medicine in Hungary.”

OTP is keen to see business ties between Russia and Hungry deepen. OTP is a Hungarian bank, but it has invested heavily in building up a Russian business, where it is one of the leading foreign-owner commercial banks on the market.

“Support for Hungarian companies, especially Hungarian exporters and investors present in the Russian market, is one of OTP Bank’s top priorities," Igor Belomytsev, Deputy Chairman of OTP Bank Board, said.

"Leaders of Hungarian pharmaceutical industry don’t only sell their products in Russia but actively invest their capital into development of medicine manufacturing in the Russian Federation. We consider the launch of successful cooperation with the International Investment Bank a great honour for us, and the agreement signed significantly expands possibilities of both Hungarian and Russian companies for the mutual benefit of our countries,” Belomytsev added.