MOSCOW (Reuters) - The Russian Direct Investment Fund (RDIF) will provide a 40 billion rouble (£517.16 million) loan to the Sistema (>> AFK Sistema PAO) conglomerate to help settle a dispute with oil producer Rosneft (>> NK Rosneft' PAO), the fund's head Kirill Dmitriev said on Wednesday.

Dmitriev told reporters that Sistema-owned retailer Detsky Mir (>> Detskiy Mir PAO) and Bashkirian Power Grid Company will be put up as a collateral for the six-month loan.

Sistema will pay 100 billion roubles to resolve a dispute with Russia's largest oil producer Rosneft over the Bashneft (>> ANK Bashneft' PAO) oil company, under a settlement announced by both companies on Friday.

Sistema will make payments in three instalments. First, 20 billion roubles, then 40 billion roubles and a final 40 billion roubles, due on Dec. 29, Feb. 28, and March 30, respectively.

The dispute centred on the Bashneft oil company and pitted powerful Rosneft chief executive Igor Sechin, a close ally of President Vladimir Putin, against Yevtushenkov, a billionaire who some media reports suggest is close to Prime Minister Dmitry Medvedev.

(Reporting by Denis Pinchuk; Writing by Vladimir Soldatkin; Editing by Louise Heavens)