November 17, 2010 / 2:45 PM / 9 years ago

UPDATE 1-Russia approves $32 bln privatisation plan

* Government inks plan to sell 1 trln roubles in state assets

* State assets to be sold between 2011 and 2013

* Biggest Russian state asset sale since the 1990s

(Recasts, adds detail, background)

MOSCOW, Nov 17 (Reuters) - Russia’s government approved a plan on Wednesday to sell around 1 trillion roubles ($31.9 billion) in state assets over the next three years to plug a gap in the budget deficit and lure foreign investors.

Russian leaders need cash to ratchet up growth ahead of the 2012 presidential election, in which former president Vladimir Putin has hinted he may stand.

Economy Minister Elvira Nabiullina said following a cabinet meeting chaired by Prime Minister Putin that the plan — which includes stakes in the country’s two biggest banks, main oil producer and railways monopoly — had been approved.

She said about 1 trillion roubles in state assets would be sold off between 2011 and 2013.

An earlier draft of the plan had outlined a fund-raising plan of up to 1.8 trillion roubles over the next five years, but the additional 800 billion roubles has yet to be approved.

The first state-owned asset to be sold is almost certain to be a 10 percent stake in second biggest lender VTB (VTBR.MM) to U.S. private equity group TPG [TPG.UL] for at least $3 billion.

The privatisation plan is designed to attract new domestic and foreign investors and improve corporate governance at its most powerful companies. [ID:nLDE69K0N2] (For a factbox on the asset sales, please click on [ID:nLDE6AG1BQ] (Reporting by Darya Korsunskaya; Writing by John Bowker; Editing by Andrey Ostroukh, Guy Faulconbridge and Mark Heinrich)

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