Russian Corp of Nanotechnologies (Rusnano) will invest $700 million in British firm Plastic Logic to produce basic plastic computer components in Russia.

The investment follows their November pact to make plastic electronic displays and establish a plastic electronics industry in Russia. At that time, State-owned Rusnano said it intends to make a significant investment in the company.

Rusnano will initially invest $150 million in Plastic Logic and would take 25 percent stake in the firm, while providing partial guarantees for a further $100 million of debt to set up a plastic electronics plant in Zelenograd, near Moscow. The plant is expected to begin production in 2013 or 2014.

Meanwhile, U.S.-based venture capital firm Oak Investment Partners, which holds over 50 percent stake in Plastic Logic, is also investing $50 million in the project.

We are making an unprecedented investment of close to a billion dollars in the future of plastic electronics to help create one of the largest commercial centers for it in Russia. This investment signifies the potential that we see in the future of plastic electronics across a variety of commercial and consumer products, Georgy Kolpachev, managing director of Rusnano, said in a statement.

Flexible plastic electronic displays will provide another major milestone in how people process information. Entering this new disruptive segment at the stage of its inception gives Russia a chance to win a leading position in global market of future electronics, Kolpachev added.

Founded in 2000, Plastic Logic makes chips with plastic rather than silicon. The company is developing a new technology that would help printing electronics on thin and flexible plastic substrates at low costs, thus enabling new product concepts in a wide range of markets including displays and sensors.

The initial target markets of Plastic Logic, which was spun out of Cambridge University, include active matrix backplanes for flat panel displays and smart electronic labels to replace barcodes and supermarket price tags.

In August 2010, the company scrapped its first e-reader product, named as QUE proReader, after multiple delays. However, the company said it is still developing a next-generation electronic reader for business.

California-headquartered Plastic Logic has raised over $200 million in financing from top-tier venture funding sources in Asia, Europe and the U.S. Key investors include the venture capital arms of Dow Chemical, BASF and Intel.

Plastic Logic, which has a research laboratory in Cambridge, opened its first plant in Dresden, Germany in 2008.