Russia Increases Far East State Development PPP Budgets

Russian Prime Minister Mikhail Mishustin has signed a decree increasing funding for projects aimed at developing economic growth centres in the Russian Far East by another ₽32 billion (US$360 million). The total amount available in the state budget is now ₽73.3 billion (US$830 million).

Mishustin said “This will ensure federal co-financing for projects implemented under the Far Eastern concession. The funds will be allocated from the federal budget and will be used to co-finance regional expenses under (Private Partnership Project) concession agreements that exceed the period of budgetary obligation limits.” The Far Eastern concession mechanism is one of the key tools for implementing plans to promote social development in the Far East’s economic growth centres. Through this mechanism, the government guarantees companies a return on investment and minimizes risks.

The increased funding will support projects such as constructing an embankment in Khabarovsk Territory, creating the Minny Gorodok park in Vladivostok, developing an innovative scientific and technological center on Russky Island, constructing a bridge crossing over the Bira river in Birobidzhan, reconstructing the Birobidzhan-Ungun-Leninskoye highway, and modernizing street lighting in the city of Svobodny in the Amur region and Chita in Transbaikal Territory.

The Russian Far East currently attracts about 1/3 of all Foreign Direct Investment into Russia, while the Vladivostok Special Economic Zone has been attracting Russia capital back into Russia where it is subjected to lower taxes provided the money is used in regional development.