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.
“Investments in the fixed capital of Moscow from January to March of 2022 amounted to RUB 713 bn, which is 4.8% more than last year’s figures. Moscow accounts for 17.8% of the total Russian investments. Moscow companies mostly invest in machinery and equipment – 37.6% of the total investment in fixed assets,” said Vladimir Efimov, Deputy Mayor of Moscow for Economic Policy and Property and Land Relations.
The growth in the volume of investments in the fixed capital of the city is due to the support measures, which Moscow provides to business. Companies, which have received the status of a technopark, industrial complex, anchor resident of technopark, can reduce the regional tax burden by 17-25%. The volume of investments of companies with these statuses amounted to RUB 112,8 bn in the last 5 years. Analogical support mechanism operates on new investment projects. Today, 137 Moscow companies are entitled to various benefits: 64 industrial complexes, 42 technoparks, 18 anchor residents, 13 investment priority projects.
“The Moscow government announced a competition to select an investor who will reconstruct a city building constructed in 1840 in Serebryanichesky Lane into a hotel and will be able to operate it in the future. The project will be implemented under the concession at the expense of the winner. Its term will be 49 years. The ownership of the object of the agreement belongs and will belong to Moscow,” said Vladimir Efimov, Deputy Mayor of Moscow for Economic Policy and Property and Land Relations.
According to the terms of the competition, the concession hotel after renovation must have at least three stars. The investor is expected to complete the design and reconstruction of the building within a period of less than two years.
“The concessionaire will equip the facility with new equipment, inventory and furniture. Subsequently, the investor will provide hotel services in the building. He will also maintain the hotel in proper condition, carry out current and major repairs at his own expense, and cover maintenance costs,” said Vladislav Ovchinsky, Head of the Moscow Investment and Industrial Policy Department.
To date, major concession projects are being implemented in Moscow in such areas as health care, road construction, housing and communal services. According to the director of the Moscow Investment Agency Artem Barashev, the total volume of investments under the capital’s concessions amounted to almost RUB 115 bn.
“Within the framework of the St. Petersburg International Economic Forum, Moscow and the National PPP Center entered into an agreement that will allow the transfer of work on the preparation and implementation of investment initiatives to a digital format – to the Rosinfra platform. It is planned to optimize business processes, form a methodological base, develop uniform requirements for documentation and structure templates that are necessary for initiating, preparing and implementing PPP projects. This will further reduce the time of their launch,” said Vladislav Ovchinsky, Head of the Moscow Investment and Industrial Policy Department.
Cooperation will also contribute to increasing the openness of information about the capital's PPP projects and will allow access to potential market participants. The Rosinfra platform will also contain up-to-date information on the preferences that investors can receive in Moscow.
Experts of the National PPP Center will assist in the selection, evaluation and preparation of promising projects, attracting funding to them, and selection of optimal federal support measures.
Within the framework of the St. Petersburg International Economic Forum, Moscow and the DOM.RF Development Institute signed an agreement under which the parties intend to develop cooperation in the implementation of investment projects and consider financing the construction of urban infrastructure facilities.
“The agreement ensure an effective exchange of methodological, analytical and other information for further development of project financing opportunities. Investors implementing public-private partnership projects in Moscow can count on long-term financing on favorable terms,” said Vladimir Efimov, Deputy Mayor of Moscow for Economic Policy and Property and Land Relations.
For the fourth time, Moscow topped the National Ranking of the Investment Climate Situation in the constituent entities of the Russian Federation of the Strategic Initiatives Agency. Since 2017, Moscow has entered the top 3 regions with the most preferable investment climate.
The ranking evaluates the efforts of regional authorities in creation a favorable business environment and identifies the best practices. Its results stimulate competition for investments at the regional level.
“The capital accounts for almost 18% of the all-Russian volume of fixed investment and about a half of Russia’s foreign direct investments. At the end of 2021, the volume of investments in fixed assets increased by almost 19% and amounted to RUB 4,8 trn,” said Vladimir Efimov, Deputy Mayor of Moscow for Economic Policy and Property and Land Relations.
“At the end of 2021, Moscow rose to one place in the ranking of Russian regions in terms of the level of public-private partnership (PPP) development and again entered the top 3 list. The city consistently performing well in this area because of extensive experience in implementation of PPP projects and active work in the field of development mechanisms of cooperation with business,” said Vladimir Efimov, Deputy Mayor of Moscow for Economic Policy and Property and Land Relations.
The ranking is made by the Ministry of Economic Development of the Russian Federation based on assessment of three factors: the dynamics of project implementation in the reporting year, the experience gained in the previous period and the state of the regulatory and institutional environment.
“The aggregate volume of PPP contracts in the capital exceeds USD 1,1 trn. In 2021, the volume of PPP projects increased by more than USD 100 bn. There are 52 life cycle contracts, several concessions, an offset contract, and a PPP agreement among the signed contracts. Within the framework of one of the concession contracts, a modern school will be built on the territory of the Skolkovo Innovation Center. Within the framework of the other two concessions, investors will construct enterprises to process silt sludge of the Lyuberetsk and Kuryanovsk sewage treatment plants,” said Vladislav Ovchinsky, Head of the Moscow Investment and Industrial Policy Department.
According to the director of the Moscow Investment Agency Artem Barashev, in 2021 the city also signed the first PPP contract in the field of ecology - to collect and process failed electronic and electrical equipment for its subsequent disposal. The capital will hand over to the investor unused capital construction facilities, which he will reconstruct for collection points and equip with the necessary equipment. The project will help to reduce the adverse impact on the environment and to create a cycle of electronic scrap recycling.
Moscow concession project on construction of two enterprises on ecological treatment of silt sludge won in the nomination “The Best Public-Private Partnership Project in the field of Housing and Communal Services” of the ROSINFRA National Infrastructure Development Award. The award ceremony took place within the framework of the St. Petersburg International Economic Forum.
“The investor will invest more than RUB 27 bn in the creation of enterprises. The facilities will belong to Moscow from the moment of their commissioning. The concession agreement does not involve costs from the city budget for the implementation of the project,” said Vladimir Efimov, Deputy Mayor of Moscow for Economic Policy and Property and Land Relations.
The agreement became the first concession of the capital in the field of housing and communal services. It was signed in February of 2021 for 20 years: until 2024, the investor will build enterprises, and for the next 17 years, he will be carrying out their operation. Now the design of the facilities is underway, they will comply with global environmental standards. More than 70 people will be able to work at the new plants.
“As at October 1, 2021, the accumulated volume of investment from China to the capital of Russia is USD 912 m. USD 644 m of these funds belong to the capital of Moscow enterprises. Over 5 years, Chinese business investments have grown by 1,7 times. Trade between Moscow and China is also growing: in 2021 it amounted to USD 64.47 bn, which is 33.9% more than a year earlier,” said Vladimir Efimov, Deputy Mayor of Moscow for Economic Policy and Property and Land Relations.
The volume of Moscow’s exports to China in 2021 amounted to USD 30.37 bn. This is 14.7% of the total capital exports. By 2020, the growth amounted to 43.5%. Imports exceeded USD 34 bn, 26.4% more than a year earlier.
“In 2021, Moscow companies exported to 186 countries more than USD 33 bn worth of products from the non-resource non-energy sector. This is 25% higher than the 2020 results. At the same time, 56.9% of shipments – more than USD 19 bn – went to the markets of friendly countries,” said Vladimir Efimov, Deputy Mayor of Moscow for Economic Policy and Property and Land Relations.
The main importer was Kazakhstan, which purchased goods worth USD 3.4 bn. It is followed by Belarus, China, Algeria, India, Turkey, Iran and Vietnam. About 81.7% of all non-energy exports to friendly countries in Moscow were industrial products. Supplies of food products increased by 19.7%, to USD 166.4 m. In addition, the supply of footwear increased by 14.4% to over USD 152 m.
“Last year, Moscow industrial enterprises also supplied products worth USD 15.6 bn to other countries, of which USD 2.4 bn was for mechanical equipment and machinery. Exports of this category of goods increased by almost 48%. The volume of deliveries of electrical devices and communication equipment increased by 26.2% – almost USD 1.6 bn,” said Vladislav Ovchinsky, Head of the Moscow Department of Investment and Industrial Policy.
By the beginning of June, more than 16.5 thousand organizations in Moscow turned to the city for anti-crisis support. Of these, 4.5 thousand have already actually received assistance totaling RUB 19.8 bn. The planned volume of such support at the moment is about RUB 46 bn.
Moscow entrepreneurs have signed about 200 preferential factoring contracts worth RUB 12.6 bn. In total, more than 300 applications were approved for a total amount of RUB 18.7 bn. At the same time, the actual financing under the concluded factoring agreements amounted to RUB 4.26 bn.
More than 1.200 investors received anti-crisis assistance from the city in the property and land sphere. 105 tenants of land plots, for which the purpose of transferring from operation to construction had been changed, have already received a deferred lease payments for the second quarter in the amount of RUB 5.6 bn for 6 months. The same benefit was granted to 48 owners of 83 plots for which the type of permitted use for construction has been changed: they transferred contributions in the amount of almost RUB 3.4 bn. In addition, according to the appeals of 128 tenants of land plots issued for construction, the rental rate set within the progressive scale for 2022 will remain in 2023. The amount of such support exceeds RUB 2.2 bn.
Capital's developers returned bank guarantees for RUB 5.8 bn. This option was used by three owners of 15 land plots. The land owners have concluded agreements with the city on the creation of places of employment. Developers are building complexes in the west, north and north-west of Moscow – in Rublevo-Arkhangelsk and Molzhaninovsky districts, as well as in Khoroshevo-Mnevniki.
Among the anti-crisis support measures operating in the capital, preferential lending programs for businesses are popular, it have been used by almost 3.000 SME organizations. The total amount of subsidies are RUB 2.1 bn.
The capital has leased land plots to investors for 5 years at a preferential rate of one ruble per year for the construction of industrial facilities: a new building for an enterprise developing electronic components, confectionery production, an instrument–making complex and a complex for the manufacture of components for special fire equipment. The implementation of these projects will create more than 2.000 jobs. The volume of investments will exceed RUB 10 bn.
The city sold at auctions 3.600 objects in five months of 2022 with a total value of RUB 27.5 bn. The constant leader were parking places: during this period, auctions were held for 2.100 objects.
836 apartments, 540 non-residential premises, 34 land plots for various purposes, 50 non-stationary retail facilities were also sold at the city auction.
The city put up for auction non-residential premises ranging from 13.7 to 806.2 square meters in different districts of Moscow. Applications for participation can be submitted from 4th to 14th of July inclusive. Bidding will be held in the form of an open auction.
22 lots are offered in the center of the capital, 12 objects were put up for auction in Troitsky and Novomoskovsky administrative districts, nine in the north, eight in the east, six each in the west and southwest, five in the south, one each in the northeast , northwest, southeast and Zelenograd.
In the first 5 months of 2022, 416 lots were sold at the auction, and the average level of competition was 6 participants per object.
Department of Investment and Industrial Policy of the City of Moscow
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