The State Nanotechnology Corporation, engine builder Saturn and Gazprombank signed a contract Wednesday to create a joint venture that will build equipment for the aviation and engineering industries.

The agreement, worth an estimated 1 billion rubles ($38.3 million), is the first deal for the nanotechnology corporation since President Dmitry Medvedev asked former UES chief Anatoly Chubais to head the company, also known as Rosnano, last month.

"This project will be highly effective financially," Rosnano managing director Sergei Polikarpov said in a statement. "The creation of a metal-cutting tool with a nanostructure covering marks a significant contribution to the competitiveness of Russian engine building."

The special coating will allow the tools to be used up to a dozen times, while going through more than double the amount of metal they are normally able to cut, the statement said.

Chubais was on hand to sign the agreement with Saturn CEO Yury Lastochkin and Gazprombank vice president Anatoly Milyukov.

Both Saturn and Gazprombank will have 25 percent stakes, while Rosnano will invest half the total sum.

The company, which will manufacture hard-alloy tools to detail parts for airplane engines, will base its production at a Saturn facility in Rybinsk, in the Yaroslavl region.

Saturn is expected to consume up to 30 percent of annual production, while the rest will be sold to domestic manufacturers. Lastochkin said the venture would consider the possibility of eventually entering the international market.

Asked how the ongoing financial crisis would affect Rosnano, Chubais said he expected it would spur an increased appetite for innovation.

"I'd say this crisis is the worst since the Great Depression. We shouldn't dismiss it as if we don't care or aren't worried. We do care."