The Regional Development Fund could be created at the initiative of the Russian Direct Investment Fund (RDIF). This request was made by the RDIF CEO Kirill Dmitriev to the Russian Minister of Finance at the Investing in the Region – Investing in the Future forum that took place in Moscow last Thursday.
According to Dmitriev, the future fund will allow for financing long-term investment projects starting with a 10-year investment horizon with the use of the federal budget. He believes that this will give investors a feeling of stability. Dmitriev also lamented that not all regional are ready to invite investors, though each of the Russian regions has its advantages and specialties, which could help attract investments. Thus, Governor of the Ulyanovsk Region Sergei Morozov said that “we are a small region, we do not have many natural resources, but we have vast intellectual potential. We are the country’s leaders in producing renewable energy.” Moscow Region Governor Andrei Vorobyov said that “in the Moscow Region, we are building an entire waste processing industry offering preferential rates. In addition, we will provide land for free to some investment projects.”
However, there are examples when regions are reluctant to welcome investors. According to Federation Council Speaker Valentina Matviyenko, “so there was an investor related with Chinese funds, and he said that he want to put money in a concrete region. I call the region’s Deputy Governor tell him that. And he says, “I am not going to receive investors because we do not have any projects to invest in, we have nothing to offer.”
Russian First Deputy Prime Minister, Finance Minister Anton Siluanov spoke about the initiatives related to the financial side of investing. “In order to promote investment activity in the Russian regions, we will be restructuring government-funded loans. We are speaking about big opportunities for lending money to regions, and we will provide such loans next year as well,” he said.
“We hope that the Regional Development Fund will be launched next year; we are currently working with the Finance Ministry on that matter,” Kirill Dmitriev told Invest-Foresight. “Everyone understands that if a project is successful, it will pay regional taxes. Therefore, regions could use part of these taxes to launch a new project. The problem is it would take seven years. And nobody can take such a risk for such a distance future. We believe that the Russian Direct Investment Fund, with the support of the Financial Ministry, could take this risk so that regions would be able to subsidize and support key projects,” Dmitriev said.