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Investment Policy and Construction
Investment Policy
In 2008 priorities of the Government of the Republic of Karelia in the sphere of investment development were increase of investment the image of Karelia, realization of the state support of investors, involvement of additional resources in economy of the republic.
The enlarged session of the Government of the Republic of Karelia On results of implementatiion of investment policy guidelines of the Government of the Republic of Karelia in 2007 and tasks for 2008 in which more than 300 representatives of authority, business and bank structures of Karelia, Moscow, St.-Petersburg, Finland and Sweden have taken part was held on April 22, 2008. The republic has shown its openness for investors, willingness of the Government of Karelia to dialogue and mutually advantageous cooperation with the business community in the sphere of investment promotion of the region.
With a view of further improvement of investment image, implementation of the strategic aspect of investment policy - territorial marketing - was continued.
Within the scope of the I All-Russia review of investment projects (Moscow), 11th session of the Mixed Russian-Austrian Commission on trade and economic cooperation in Austria, Swedish business in the Republic of Karelia: practice, problems and prospects international seminar (Kostomuksha) there have passed presentations of economic and investment potentials of the republic with organization of mobile lay-outs of the exhibition devoted to Karelia and investment activity development in the region.
In September, 2008 in China (Changchun) there has passed the IV Trade and Investment Fair of the countries of Northeast Asia within which scope the international conference Development of the system of trade and economic cooperation of regions of the Northwest of Russia and provinces of the People's Republic of China was held, where the report on investment potential of Karelia has been presented. The lay-out of the exhibition of the republic has been devoted to investment projects in the field of housing construction, production of low-rise apartment buildings of glued woodblocks, as well as in the sphere of tourism.
The IIIrd Russian-Japanese investment forum took place In September in St.-Petersburg at participation of representatives of the authority, business, bank structures of more than 20 regions of Russia, including Karelia, and business circles of Japan, where issues of investment cooperation between the two countries were discussed.
Within the scope of the official visit of delegation of the Republic of Karelia to Leningrad region there has passed the presentation of economic potential and investment projects of the two regions. From the Karelian party investors were offered projects on production of insulating boards, production of low-rise apartment buildings of glued woodblocks, deep processing of timber, as well as the project of production of the heating equipment and products made of talcum peach.
The fifth information-analytical release Karelia Investment in Russian and English languages with an enclosed DVD containing investment projects of the republic demanding involvement of investments has been published.
There continued work on perfection of the structure and improvement of design of the Republic of Karelia for the Investor web-site where the English information version has been created and operating. The Project is Searches for its Investor database which includes 17 projects has been supplemented. To the attenton of investors the site also offers the database of land plots in section of metropolitan regions which includes more than 100 passports of sites. Popularization of the site through its registration in more than 800 electronic catalogues has caused significant growth of user activity. In 2008 11,7 thousand users registered at the site against 6,5 thousand in 2007.
Improvements were made to the Law of the Republic of Karelia On the Government Support of Investment Activity in the Republic of Karelia. The project of the Order of support of investment projects in territory of the republic, providing conducting of a special register on priority investment projects and quarterly reporting about the course of their realization has been developed.
In 2008 the interdepartmental working group on assistance to involvement of investments into economy of the republic, headed by the Prime Minister of the Government of Karelia continued its work. These have passed 8 sessions where 18 organizations with specific investment projects were considered: The White Sea Port Joint-Stock Company (creation of a sea commercial port in Byelomorsk), Karelkamen Ltd., (construction of the mining enterprise producing road-metal in Segezha region), Kalevala Woodworking Enterprise Ltd., (construction of the factory producing oriented stand boards (OSB) in Prionezhsky region), Setles Ltd., (realization of the 2nd phase of the construction project of the deep timber-processing in the Settlement of Impilahti), АКС Holding Ltd., (construction of the pig-breeding complex in Kondopoga region), etc.
The Government of Karelia and Norg Hydro Joint-Stock Company have concluded the Cooperation agreement in realization of the project on reconstruction and modernization of 41 objects of small hydrogeneration in territory of the republic.
Establishment of strong long-term relations with foreign investors promotes development of constructive cooperation. In November, 2008 at their meeting of the Head of the Republic of Karelia and vice-chairman of the Swedwood International AB company considered issues of raw-material provision for Swedwood Karelia, Ltd., realizing the Creation of an Enterprise Producing Furniture Components in the Republic of Karelia investment project with €32 million of total amount of investments. Interest of the Government of Karelia in the project implementation and giving it the priority status in the field of forest development has been confirmed.
During the year the Government of Karelia has considered more than 30 offers of investment companies to construct new enterprises, reconstruct, expand and restucture the operating ones. Memorandums of understanding on implementation of investment projects have been signed with investing organizations of Agrodom Severny, Ltd., Karelian Complex of Nonmetallic Minerals, Ltd., Aveil, Ltd., UralChem, Inc.
The complex of investment actions for 2008 has been implemented, responsibility of heads of enforcement authorities of the republic for the investment process development of in the region is assigned to departments.
Government of the Republic of Karelia worked actively with federal authorities on involvement of financial assets from the federal budget. In 2008 six sessions of the republic's interdepartmental commission on work with federal programs were held. Some issues related to spending federal investments in the accounting to year and condition of work in the region on budgetary application campaigns for 2009-2011 have been considered.
With a view of preservation of favorable investment climate, creation of conditions for modernization and production extension, Government of the Republic of Karelia continued activity on expansion of measures of government stimulation of investment activity.
Due to cancelling of budgetary crediting of investment projects since January 1, 2008 activity of the Government of the RK regarding financial support of investors has been reoriented to granting for partial reimbursement of credit interest rate payment expenses involved for implementation of projects.
Budget of the Republic of Karelia for 2008 for these purposes had allocated 5 million roubles. By results of competitive selection, grants for reimbursement of interest rate payment expenses were awarded to 7 organizations, including Sibirit-3 Joint-Stock Company (introduction of the new "know-how" for explosives production); Bumex Lahdenpohja Plywood Mill, Ltd., (purchase of equipment and motor transport); Engineering Centre of Fire Robots Technology - «FR» JSC (expansion, modernisation of capacities and introduction of new technologies for production of fire robots and firewater monitors). The volume of involved credit resources has made 103 million roubles.
The new form of the government support is claimed among investors which is an indicative of the constant increase of the number of grant applicants. Government of the republic sees its task in expansion of measures of financial support of investors that is especially actual amid the financial crisis and deterioration of conditions of the real sector of economy credit by credit organizations.
Practice of granting tax privileges to enterprises implementing investment projects in territory of the republic on the basis of investment agreements concluded with investors continued in 2008. In 2008 there operated 13 Investment Agreements with 5875,0 million roubles of total volume of investments, 6 new agreements with Karelian Complex of Nonmetallic Minerals, Ltd., Kondopoga Bakery, Inc., Byelomorsky Quarry, Ltd., Segezha Packing, Ltd., Petro-Granite, Ltd., Segezha Pulp and Paper Plant, Ltd., have been concluded.
To solve the task on provision of availability of credit resources for investors there has been made a decision to create a Guarantee Fund in the republic; its primary activity will be provision of guarantees of obligations of subjects of small business (credits, loans, leasing operations) to creditors.
Important part in involvement of financial resources, mainly in the form of long-term investment credits, is assigned to bank sector of the republic. Implementation of the Bank Services Development Strategy in the Republic of Karelia of for the period through to 2008 has been completed.
In 2008 a number of meetings with representatives of the credit organizations have been held to discuss cooperation between the Government of Karelia and the bank sector in the field of investment crediting, mortgage housing credit, implementation of investment projects, prospects of broadening of access to bank services.
Activization of investment process in the republic is also promoted by involvement of resources of insurance organizations through creation of the developed insurance system in the republic.
Government of the Republic of Karelia works actively with offices of insurance companies and non-governmental pension funds carrying operating in territory of the republic. During cooperation special attention has been paid to aspects of involvement of additional investment means - resources of insurance organizations, non-governmental pension funds - in real economy.
Actions on implementation of the Insurance Market in the Republic of Karelia Development Concept of the for the period to 2008 have been performed completely wthin the scope of implementation of the uniform government policy in the sphere of insurance.
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