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Russian government orders investment in venture company

MOSCOW, August 25 (RIA Novosti) - The Russian government said it ordered the Ministry of Economic Development and Trade to funnel 5 bln rubles ($1.8 bln) this year, and 10 bln ($3.7 bln) next year, to a new venture company from the Investment Fund.

The venture company is being formed as part of an effort to revitalize the country's industrial base as it seeks to diversify the economy away from commodity exports.

Under the project, money from the Investment Fund, established to finance large-scale infrastructure projects, will be invested in the charter capital of the company, which will finance venture funds.

The funds, which will also have private financing, will invest in new, high-tech companies.

Prime Minister Mikhail Fradkov signed the decree, which also entrusts the ministry with instructing government officials who would be present on the board of directors on the adoption of the company's internal documents.

The ministry must approve regulations along with the Ministry of Education and Science for selecting candidates to the board from outside the government by October 1.

The economics ministry earlier said the company would consist of at least 10 sectoral venture funds, and the state would invest from 600 million rubles ($23 mln) to 1.5 billion rubles ($56 mln) in the sectoral venture funds' charter capital, but that its control would be limited to 49% of stock.

The ministry said it will announce tenders on management companies for sectoral venture funds by the end of the year or early 2007.

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