The Moscow Department of Investment and Industrial Policy and the Moscow Investment Agency present you the next digest of the main investment events in the Russian capital.
Moscow became one of the pilot cities that developed and approved the investment declaration as part of the implementation of the Fast Track for Investment in the Regions initiative of the Ministry of Economic Development of the Russian Federation. The project provides for the creation of a unified system for launching and supporting investment projects, involves the introduction of an investment map in the regions and the development of a mechanism for interaction between investors and authorities.
"Moscow remains the most investment-attractive region of the country, the capital accounts for almost 19% of all-Russian investments in fixed assets. Thus, the volume of investments in the three quarters of 2021 alone amounted to RUB 2.5 trn, which is 21.9% higher than in the same period of 2020. Thanks to the implementation of the declaration and other measures of the federal initiative, we expect that by 2030 investments in the city's economy will grow by 70% compared to 2020, when they amounted to RUB 3.8 trn," said Vladimir Efimov, Deputy Moscow Mayor for Economic Policy and Property and Land Relations.
The document establishes Moscow's investment commitments, which will ensure a further increase in the inflow of investments. In particular, the city undertakes to preserve the conditions for the implementation of investment projects on the territory of the capital, to ensure a competitive allocation of resources, to provide investors with various preferences and to disseminate information about state support measures.
"Moscow is actively developing the practice of public-private partnership, which makes it possible to solve important infrastructure problems with the help of investors' funds. Due to the agreements signed with the business last year, projects worth more than RUB 100 bn will be implemented. Among them are 52 life cycle contracts for the supply of medical equipment and the renewal of urban transport, 4 concessions in the field of ecology, education and social support for the older generation, as well as an offset contract for the supply of medicines," said Vladimir Efimov, Deputy Moscow Mayor for Economic Policy and Property and Land Relations.
According to the concession agreements signed in 2021, investors will put a total of about RUB 3 bn rubles in the creation of a geriatric center and an innovation school in the Skolkovo Center. Two more agreements with a total investment of more than RUB 35 bn were concluded in housing and communal services: within the framework of the first, the concessionaire will build two plants for the environmentally friendly processing of sewage sludge, according to the second, the first facilities in Russia for the removal of nitrogen from wastewater and the extraction of phosphorus.
Due to life cycle contracts, Moscow is updating the rolling stock of public transport and acquiring modern medical equipment for medical institutions. "In 2021, the volume of LCC in Moscow exceeded RUB 60 bn. Thus, the city signed 15-year contracts for the supply and service of 400 electric buses, the total price of the contracts is more than RUB 24 bn. In addition, he signed 48 contracts for RUB 26.7 bn, providing for the supply of about 760 units of the latest models of medical equipment to medical institutions in the capital. The winners of the competitions were, among others, such well-known global manufacturers as Siemens and General Electric," said Alexander Prokhorov, Head of the Moscow Investment and Industrial Policy Department.
Last year, the first PPP agreement was signed in the capital for the collection and processing of out-of-order electronic and electrical equipment for its subsequent disposal, and the city also signed an offset with the Moscow Endocrine Plant, the contract price was RUB 1.1 bn.
Moscow signed a concession agreement in the field of housing and communal services, according to which the investor will build facilities for the extraction of nitrogen and phosphorus compounds from wastewater.
"The agreement with the concessionaire was signed for 27 years. In two years investor will build the facilities, and the next 25 years he will carry out their operation, maintenance and overhaul. The project will be implemented entirely at the expense of the investor, which will significantly save budget funds. At the same time, the constructed objects will become the property of the city from the moment of their launch. And the investor will be able to receive income within the framework of exploitation," said Vladimir Efimov, Deputy Moscow Mayor for Economic Policy and Property and Land Relations.
Similar installations are widely used at the largest utilities enterprises around the world, including in Europe and the USA. Such a technology will be innovative for Russia.
"The Moscow government signed a concession agreement, under the terms of which the investor will put RUB 8.4 bn in the modernization of treatment facilities. The project provides for the use of advanced, widely used technologies for the removal of nitrogen from sewage sludge and the extraction of phosphorus for its subsequent processing into fertilizers. The concession will be implemented as part of the third stage of the ongoing reconstruction of the Lyubertsy treatment facilities," said Alexander Prokhorov, Head of the Investment and Industrial Policy Department.
According to Artem Barashev, director of the City Investment Management Agency, Moscow concluded seven concession agreements in such areas as healthcare, road construction, off-street transport, housing and communal services, social services and education.
"The city handed over to the investor a building in Mozhaisk district with an area of 3,000 sq. m. Here the company will create a world-class geriatric center within the framework of a concession agreement signed last year. The center is designed for at least 100 places for living and permanent care of the elderly. It will be fitted with all the necessary equipment, taking into account the peculiarities of life, health and needs of elderly people. Investments in the creation and equipping of a boarding school will amount to more than RUB 600 m," said Vladimir Efimov, Vice Moscow Mayor for Economic Policy and Property and Land Relations.
The project will be implemented within the framework of a concession agreement signed last year with Senior Group PM LLC for 20 years. In two years, the investor will reconstruct the facility, and over the next 18 years will provide patient care services. The project does not involve expenditures from the city budget, while the future geriatric center will remain owned by the city.
"The commissioning of the center is scheduled for 2023. The concessionaire will carry out the maintenance of the center, its current and major repairs. It is important that a new social facility of this type will appear within the city limits: this will allow relatives to save time on the road and visit their loved ones more often," said Alexander Prokhorov, Head of the Investment and Industrial Policy Department.
"Industrial technoparks will appear due to the agreements between the city and investors on the program for the creation of workplace associated infrastructure (WAI) outside the TTR which was concluded last year. The total volume of private investments in projects will amount to almost RUB 17 bn. Moscow will receive more than 8,400 new workplaces in four districts of the city," said Vladimir Efimov, Deputy Moscow Mayor for Economic Policy and Property and Land Relations.
Moscow has already concluded 17 agreements on the program for creating workplace associated infrastructure. According to them, developers will construct objects with a total area of more than 1 million sq. m. The total investment volume will amount to RUB 83.4 bn. After the implementation of the projects, 29,700 workplaces will be created in the city.
"The WAI program has already included large developers. Considering projects, the city analyzes the ratio of residential and commercial real estate in those areas where investors offer to create workplace associated infrastructure. Their shortage is observed in New Moscow and within the Moscow Ring Road - in Zyablikov, Maryina, Brateev. The choice of the district affects the amount of benefits that the Moscow government provides to the investor: it is greater where the imbalance between housing and workplace associated infrastructure is higher," explained Artem Barashev, director of the Moscow City Investment Agency.
The company will produce synthetic vessels, joint fluid substitutes, preparations for autoplasmotherapy and special packaging for sterilization and storage of endoprostheses. The products are oriented both to the Russian market and to export supplies.
"Production will be launched on the basis of an existing enterprise for the manufacture of medical test systems. It has recently received the status of the official resident of the SEZ Technopolis Moscow. It is planned to invest about RUB 70 m in the project. 30 workplaces will be created to launch the new line," said Vladimir Efimov, Deputy Moscow Mayor for Economic Policy and Property and Land Relations.
The first products will reach the Russian market in 2022. It is planned that during the year the company will produce 960,000 units of drugs for autoplasmotherapy and 240,000 units of packaging for sterilization and storage of endoprostheses. And in 2023, joint fluid substitutes and synthetic vessels will be produced here.
Moscow is the main Russian exporter of lighting equipment. January–November 2021, 35.7% of total Russian exports accounted for Moscow. During this period, Moscow exported USD 92.2 m worth of goods, which is a 71.8% increase as compared to the same period in 2020 with USD 53.67 m worth of exported goods and an 86.3% increase as compared to 2019 with the export turnover of USD 49.5 m. The increase in export volumes was achieved both due to the opening of new foreign markets (last year first deliveries were made to the Philippines, Jordan, Uganda, Morocco, Cameroon and Bolivia), and the strengthening of work in traditional export directions.
Main importers of Moscow lighting equipment include Kazakhstan (the country imported USD 22.52 m worth of goods), Belarus (USD 21.53 m), and the Philippines (USD 7.02 m). The top five importers also include Germany (USD 4.52 m) and South Korea (USD 4.22 m). In total, these countries take up 64.9% of Moscow’s lighting equipment export.
Compared to the 11 months of 2020, the export of semiconductors has increased by 118% up to USD 29.11 m, chandelier and lantern supplies have increased by 71.6% and reached USD 22.91 m. Moscow-based companies have also exported USD 16.16 m worth of light bulbs (+33.5%).
“According to the Central Bank of the Russian Federation, as of July 1, 2021, the accumulated volume of foreign investment in Moscow from the Scandinavian countries amounted to USD 1.2 bn. Of these, USD 912 m was invested by companies from Sweden (77% of total volume), USD 239 m — from Denmark (20%) and USD 41 m — from Norway (3%). In general, over the past 5 years, the accumulated volume of foreign investments from the Scandinavian countries has grown by 21%,” said Vladimir Yefimov, Deputy Moscow Mayor for Economic Policy and Property and Land Relations.
Scandinavian companies invest in financial and insurance companies, trade, industry and high-tech sectors, as well as real estate.
“The Scandinavian countries are an important economic partner for Moscow. For 11 months of 2021 the trade turnover between Moscow and Scandinavia increased by 25% compared to the same period last year and amounted to USD 2.8 bn. Moscow's exports to the Scandinavian countries increased by 27% to USD 1.35 bn, imports — by 23% to USD 1.45 bn,” said Alexander Prokhorov, Head of the Moscow Department of Investment and Industrial Policy.
"Moscow continues to develop new measures of financial support for industries. Over the past few months, four programs that allow companies to compensate for the cost of paying interest on loans for new equipment, get loans for the IT solutions’ implementation, pay for bond placement services and advance revenue have been launched. With the help of such a loan, enterprises can receive from RUB 20 m to RUB 50 m to compensate for deferred payments. The funds can be used to close the cash gap until the buyer pays for the delivered products," said Vladimir Efimov, Deputy Moscow Mayor for Economic Policy and Property and Land Relations.
The interest rate of the loan depends on the key rate of the Central Bank of the Russian Federation at the time of application, but it cannot be lower than 6% per annum. Due to the new support measures, enterprises will be able to manage debt on more favorable terms compared to existing factoring offers on the market.
"The product can be used for up to 180 days. To do this, the company needs to submit an application, identify the loan purpose and provide a delivery contract under which the company wants to close the cash gap. The main debt needs to be repaid after receiving payment from the supplier," said Alexander Prokhorov, Head of the Moscow Department of Investment and Industrial Policy.
Buying and renting real estate from the city is popular among citizens and companies. During the first month of 2022, 1023 objects were sold and leased, during the same period last year — 332 units. Parking spaces made up the majority of this year's lots - more than 700 of them were sold and leased at the auctions.
Overall, in 2021, more than 11,600 objects of city property were sold and leased at the auctions, which is 60% more than in 2020.
Moscow offers entrepreneurs to purchase non-residential premises for doing business with a total area of 26,300 sq. m. in nine capital’s administrative districts.
"The demand for real estate from the city for conducting and developing business continues to grow. By the end of 2021, 995 non-residential premises were sold at auctions. Now the city offers 113 premises, with the largest number of lots located in the Central and South-Western districts – 20 and 17 objects, respectively," said Vladimir Efimov, Deputy Moscow Mayor for Economic Policy and Property and Land Relations.
Companies, individual entrepreneurs, as well as citizens can participate in auctions to purchase non-residential real estate from the city.
There are 275 parking spaces for sale at multi-level ground and underground parking. Individuals and business representatives, including individual entrepreneurs, can take part in the auction. The auctions will take place in March and April.
In 2021, according to the results of the auction, 6,500 objects were sold, which is four thousand more than in 2020. The level of competition averaged four participants per lot. The area of parking spaces varies from 9 to 50 sq. m.
Most of the objects are located in the west of Moscow - 61 parking spaces. 39 parking spaces are offered in the Central, North-Eastern and South-Western Districts. The remaining lots are located in the Eastern District -37, the North-Western District - 24, the North District - 17, the South-East District - 14, the South District - 3, and in New Moscow - 2.
A new toll highway will appear in the west of Moscow
Department of Investment and Industrial Policy of the City of Moscow
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