In which regions do investors invest money in 2023?

According to Rosstat, in 2022 more than half of the Russian regions increased the volume of investments. It reached almost 28 trillion rubles. In this year, the increase in financial injections amounted to 13.5%. Commercial real estate showed historical record, raising 291 billion rubles of investments just in the first half of 2023. We discussed which regions and projects develop the economy during a crisis, with Nikolai Bragin, founder of investment firm Bragin & Co, which invests funds to the real sector in the regions.

Photo: Center for the Construction of Large-Capacity Offshore Facilities (CCLOF) for the assembly of modules of gas liquefaction plants in Belokamenka (Novatek Company), Murmansk Region. CCLOF is a key facility for the LNG industry in Russia. Ilya Pitalev/RIA Novosti

In 2023, investment in fixed assets increased, compared to the past year. Business and the state spend money on development projects: buying equipment and transport, investing in construction and restoration buildings, counting on future growth in production and profits.

Investments help the regional economy to develop, as a result, improving the well-being of the population, the level and quality of life of the population. For example, investing in infrastructure not only makes the region more comfortable, but also attract business: good road surface contributes to business activity.

Investments in industry increase the number of jobs, reducing unemployment. Both incomes of the population and regional budget incomes from taxation are growing. People do not leave prosperous regions. On the contrary, residents of less promising areas are moving there – the population is growing.

How were investments distributed by region?

The top 10 regions in terms of investment attractiveness practically do not change over the past few years. The top list is headed by the capital regions, territories with developed economy, and commodity industry leaders (extracting regions).

So, according to the research company ID-Marketing, the largest volume of investments in fixed assets was recorded in Moscow – 16.3% of the total volume (in nominal terms). 33.8% of it fell on cars and equipment. 29.1% is share of investments in non-residential construction; 15.4% is share of investments in construction of residential buildings. These indicators are lower than the data for the same period of the last year, the situation is the same for many regions that entered the top.

Top 10 regions for investments

Region The volume of investments in billion rubles Increase in comparable prices, %
Moscow 756 -11,9
Tyumen region with districts 633 -10,2
Khanty-Mansiysk Autonomous district 317 +5,7
Yamal-Nenets Autonomous district 262 -25
Moscow region 224 -12,6
Krasnoyarsk Territory 172 +23,6
St. Petersburg 161 +5,1
Republic of Tatarstan 156 +9,8
Irkutsk region 127 +18,2
Krasnodar Territory 122 +5,5

An even more interesting picture is observed in regions that are not included in the top 10. They showed explosive growth in investments. Thus, the volume of investments in the Amur region increased by 55.3% compared to last year, and in the Rostov region – by 74%. In 2011, the 100 Governor’s Investment Projects program was launched for the region. At the beginning of May 2023, the volume of investments in it amounted to 534.53 billion rubles. The main areas here are agriculture and the fuel and energy complex.

Another example: investments in the Republic of Buryatia increased 2.5 times – by 96.2%. Most of the investments came from non-residential buildings (56.6%), machinery and equipment (37.2%), the transport sector, the energy sector, and mining. In Buryatia, the largest investment projects are developing, such as the Ozerny mining and processing plant (MPP).

Region The volume of investments in billion rubles Increase in comparable prices, %
Rostov region 118 +74
Republic of Altai 24 +64,2
Kamchatka Territory 14 +59,9
Kaliningrad region 31 +58,4
Volgograd region 46 +57,3
Amur region 121 +55,3
Republic of Mordovia 11 +47,7
Khabarovsk Territory 72 +45,6
Chechen Republic 17 +44,1

In which regions have investments fallen the most?

Several regions at once have set an anti-record for reducing investment in fixed assets.

Region Underinvestment in RUB billion compared to Q1 2022 Reduced investment in comparable prices,%
Karachay-Cherkess Republic 3 -43,1
Bryansk region 9 -42,4
Sevastopol 7 -38
Oryol region 8 -32,1
Republic of Karelia 10 -32
Sakhalin region 36 -31,2
Ulyanovsk region 16 -28,4
Kaluga region 18 -27,6
Murmansk region 34 -26,7
Novosibirsk region 47 -25,5

What do investors pay attention to when choosing a region?

  • By investing in a long-term project, investors consider:
  • Demographic characteristics of the region: population education, age, population increase or decrease, the number of people leaving and coming to the subject. The standard of living of the population, the social stability of the region also matters.
  • Formed supply chains. Investors are more willing to invest in regions with closely connected urban centers that simplify production and trade.
  • Availability of public programs and benefits for the subject. Partial financing from the state budget, subsidies, preferential loans, tax holidays, discounts on utility bills, etc. – all this increases the investment attractiveness of the region.
  • The scale of urban agglomerations. For investors, rich labor resources, developed logistics, and the availability of airports are important.
  • The presence of city-forming enterprises, industrial clusters, commercial real estate objects. Investors are attracted by the presence of the largest companies of leading industries  in the region.
  • Regional policy management. If the authorities are actively developing the region, then objects of culture, art and leisure are being built there: business centers, museums, parks, sports complexes, and entertainment centers. This makes cities attractive for investments.

Investment attractive industries

In connection with the sanctions, many companies had to rebuild logistics and technological processes, changing sales markets. Therefore, in 2022-2023, businessmen invested 5 trillion rubles in transportation and storage.

The construction industry also remains at the peak of investment attractiveness thanks to national projects and government support measures, for example: concessional lending, mortgages, partial compensation for capital construction costs, public financing of infrastructure construction. Thanks to them, the construction sector “added” 16% to the volume of investments. Raw materials production and mining also do not lose investment, despite the sanctions.

Most anticipated regional investment projects in 2023

  • The largest projects to which the attention of business and the state is drawn:
  • Resort “Manzherok” and the hotel complex Altay Wellness Village in the Altai Territory. Sberbank invested in the project. Several large projects are developing in the region at once, which led to a real investment boom.
  • Amur Minerals LLC launches an MPP on the basis of a copper deposit in the Khabarovsk Territory.
  • Complex of deep processing of oil raw materials and medium distillates, complex for the production of automobile gasoline of JSC Novoshakhtinsky Plant of Petroleum Products, residential area Suvorovsky of GK VKB and complex for deep processing of wheat grain and production of amino acids of JSC DonBioTech are developing in the Rostov region.
  • Mining and Metallurgical Plant “Udokan” in Transbaikalia. The company plans to process 12 million tons of copper ore per year.
  • Nadym – Pangody railway section in the Yamalo-Nenets Autonomous district. In 2022, the project raised investments in the amount of 43 billion rubles. Gazprom is one of investors. The 109 km long railway line will become part of the Northern latitudinal passage and will help connect the Sverdlovsk and Northern Railways.
  • at the Pavlik field in 2023 they plan to launch the second stage of the MPP. Teutejak mine plans to commission a gold mining plant. Both projects are developing in the Magadan region.
  • Railway in Yakutia and a port in the Khabarovsk Territory. The project raised 97.1 billion rubles of investments in 2022. The Elgaugol company is engaged in the construction of a railway line for the export of coal from the Elginsky coal deposit to the shore of the Sea of ​ ​ Okhotsk. Here the company is building a port, which will begin to receive the first ships in 2024.
  • Highland Gold Mining plans to launch a CIF in Chukotka to extract 800 thousand tons of ore per year.
  • Electric steelmaking complex in the Nizhny Novgorod region. The project of the company “Ecolant” raised investments in the amount of 150 billion rubles. According to the team’s plans, the environmentally friendly plant in Vyksa will start working in 2025 and will produce 1.8 million tons of steel per year.
  • The Coulstar company plans to start mining coal in the Bogatyr open pit in the Novosibirsk region. The company is significant for the coal industry: it plans to process 10 million tons of anthracite per year.
  • Ozernaya Mining Company is building an enrichment plant in Buryatia on the basis of a polymetallic deposit.

Also, the Krasnoyarsk Territory aroused special interest among investors. Large metallurgical projects are developing here, most of which are planned to be implemented by 2028. Together, there are more than 100 investment projects in the region, so the authorities expect an increase in investments in the economy by the end of the year at the level of 22.6%.

The Role of the State in Investing

The share of budget investments in 2022 increased from 18.3% to 20.2% and amounted to a little more than 4 trillion rubles. And in 2023 it should reach 29.7 trillion rubles. For many regions, public investment is the main source of funding. Here’s what’s known about plans of the state:

  • They plan to allocate a trillion rubles for infrastructure budget lending. This money will go to the construction and modernization of infrastructure, roads and other objects of social and engineering infrastructure in 83 constituent entities of the Russian Federation.
  • Regions will receive 180 billion rubles for more prompt commissioning of strategically important facilities.
  • Over 300 billion rubles will be allocated for the infrastructure of the regions. Also through budget loans.

Let’s summarize

In 2022, positive investment dynamics was noted in more than half of the regions of Russia. This year, this trend continues. The share of budget injections has also increased, which helps mitigate the effects of the crisis.

In some areas, such as commercial real estate, investor activity has grown several times. Experts predict investment growth in regions with stable economic development, as well as areas left by foreign competitors: agriculture, light industry, tourism, transport and logistics. In these areas, business does not plan to curtail investment projects. However, export-oriented industries may suffer today.

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