Economic relations between Russia and Germany have moved from strictly trade to serious investment, President Dmitry Medvedev said Thursday, as German conglomerate Siemens expanded its presence on the Russian market with billions of dollars in deals.
"Trade has recovered, and now there's a move from the trade cooperation model to cooperation in investment, production, science and technology," he said at an intergovernmental meeting with German Chancellor Angela Merkel in Yekaterinburg.
Cooperation between the two countries "has become more specific, … more intensive and less complicated," Merkel said, adding that Germany was ready to share its experience with its Russian partners, specifically in energy efficiency.
Engineering firm Siemens was the vehicle for that cooperation on Thursday, announcing that it will produce wind turbines and trains in Russia, as well as create research and development centers in Yekaterinburg and possibly in Skolkovo.
Under an agreement signed in Yekaterinburg, Siemens will participate in the Skolkovo project by designing software and developing energy efficient technologies. The company also said it might even create a research and development center in the innovation city planned on the outskirts of Moscow.
"The final format of Siemens' participation in the Skolkovo project will depend on its legislative framework, which is still being formulated," the company said in a statement.
Medvedev welcomed Siemens' plans and urged other German companies to follow suit.
"We hope that the German business will be very, very active in participating in the big project that will be implemented in Skolkovo," he told reporters, adding that Siemens demonstrated "an encouraging example for us."
Siemens also signed an agreement with Renova-StroiGroup, the German Energy Agency, the Russian-German Energy Agency and the Sverdlovsk regional government on the creation of a research and development center in Yekaterinburg that would develop energy efficient technologies.
In addition, Siemens said it signed an agreement establishing a joint venture with state-owned RusHydro and Russian Technologies that would create components for wind turbines in Russia.
The joint venture, in which the German company will hold a controlling stake, will also oversee sales and support of Siemens' wind turbines in Russia and the Commonwealth of Independent States, the statement said.
"This joint venture will allow us to come to the prospective renewable energy sources market in Russia among the first," Peter Loescher, chairman of the company's board of directors, said in an e-mailed statement.
Under the agreement, Siemens will supply Russia with 250 to 500 megawatt wind turbines over the next five years. Russia hopes to increase the share of its electricity generated by wind power to 5,000 megawatts by 2020.
Components for the turbines will be produced at a factory in the Volgograd region, which will be opened next year, said Sergei Chemezov, head of state corporation Russian Technologies.
Energy generated from renewable sources currently accounts for less than 1 percent of the electricity used in Russia, though that figure is expected to grow to 2.5 percent in 2015 and 4.5 percent by 2020.
In yet another deal, Siemens agreed to create a joint venture with Russian Railways and its subsidiary Aeroexpress to make components for Desiro Rus electric trains in Russia, Siemens said in a separate statement.
Under the agreement, the German company will also supply 240 Desiro Rus trains to Russian Railways over the coming 10 years.
While the company did not say how much the deal was valued at, the figure could be as high as 2.6 billion euros ($3.3 billion), based on the 10.8 million euros per unit that Russian Railways paid for 38 Desiro trains last year.
The current figure may be lower, however, since many of the components for this batch of trains may be produced in Russia, thereby lowering the trains' price, said Dmitry Baranov, a transportation analyst at Finam.
The two sides will soon choose a production site for the joint venture, which will be created by 2011, the statement said.
But while Siemens provided plenty of evidence for increased German investment in the Russian economy, Medvedev called for an increase in Russian investment in the German economy.
"Of course, we would like to actively participate in the German economy," he said.
The Russian government has been pushing Germany to allow conglomerate Sistema to buy a stake in German chipmaker Infineon.
Medvedev also said that Russia would create favorable conditions for foreign investors working on the territory of the customs union with Belarus and Kazakhstan.
The Kremlin said in a statement Tuesday that German investment in Russia stood at $20.2 billion by the end of March, while Russian investment in Germany accounted for $600 million.
In other issues discussed Thursday, Merkel agreed to work toward easing the visa regime between Russia and Germany.
"We'll work on that for sure," she said.
The recent FIFA World Cup also came up in conversation among government officials.
As the Russian team did not participate in the tournament, most members of the Russian delegation supported the German team, which lost in the semifinals to Spain, Medvedev said.
First Deputy Prime Minister Viktor Zubkov said Germany had lost because it had been predicted by the octopus Paul, who has become famous for correctly forecasting the outcomes of Germany's games.
"Of course, everything could have probably gone smoothly without Paul —you know whom I'm talking about," Zubkov said.
"We ate his colleague in a restaurant yesterday," retorted Medvedev, who had an informal dinner with Merkel late Wednesday.