Tatarstan authorities begin to prepare for agreement conclusion on protection and promotion of capital investments

Tatarstan authorities begin to prepare for agreement conclusion on protection and promotion of capital investments
Photo: realnoevremya.ru/Maksim Platonov

Cabinet of Ministers of Tatarstan has approved three resolutions

Tatarstan authorities are beginning to prepare for agreement conclusion on protection and promotion of capital investments. The Cabinet of Ministers of the republic has approved several resolutions in this area at once.

Firstly, the Tatarstan authorities have approved the procedure for evaluating the investment project, in respect of which it is planned to conclude an agreement on the protection and promotion of investments, for the effective use of the republican budget funds. The document states that it is not used to check investment projects for the effectiveness of the use of regional budget funds allocated for capital investments, as well as for investment projects implemented in accordance with the legislation on concession agreements and public-private partnerships.

Applications and all necessary documents of organisations that implement investment projects are submitted to the Ministry of Economy of Tatarstan. After that, within two days, the agency must send the documents received from the applicant to the Ministry of Finance of the republic for the preparation of a reasoned opinion, which contains information on the possibility of Tatarstan providing state support measures specified in Article 15 of the Federal Law “On Protection and Promotion of Investments”, and on the compliance of the project with the criterion of sufficient budgetary efficiency.

Photo: realnoevremya.ru/Maksim Platonov

Secondly, the Republican Cabinet of Ministers approved the rules for concluding, amending, and terminating agreements on the protection and promotion of investments, to which Tatarstan is a party and Russia is not. According to them, the document can be signed only with a Russian legal entity that meets the characteristics of an organisation implementing an investment project (they are listed in paragraph 8 of Part 1 of Article 2 of the Federal Law “On Protection and Promotion of Investments” — ed.). Applicants must provide reliable information about themselves, including information from the Unified State Register of Legal Entities, confirming that they are not in the process of liquidation or a decision has not been made regarding his upcoming exclusion from the Unified State Register. Bankruptcy proceedings should not be opened against them.

A fairly extensive list of documents must be attached to the application, starting from the draft agreement on the standard form, ending with a certificate of the absence of arrears in the payment of customs and other payments. The list also includes the financial model of the investment project, which includes data on the type of cash flows, interim forecast data, internal rate of return, debt service ratio, and so on.

Photo: realnoevremya.ru/Ilya Repin

Thirdly, the Cabinet of Ministers of Tatarstan has approved the procedure for monitoring the implementation of the terms of the agreement on the protection and promotion of investments and the conditions for the implementation of the investment project in respect of which such document is concluded, including the stages of its implementation.

Monitoring includes verification by the Ministry of Economy of the Republic of Tatarstan of the information provided by the organisation implementing the investment project, information on the fulfillment of the terms of the agreement on the protection and promotion of investments and the conditions for the implementation of the project in respect of which it was concluded, as well as the preparation by the agency of a free report on the results of monitoring, including on the basis of certificates on the results of monitoring. Its purpose is to collect, systematise and record data on the implementation of the agreement and the conditions for the implementation of the investment project, as well as to identify circumstances indicating the existence of grounds for termination of the document.

The main tasks of monitoring the authorities indicated continuous monitoring of the progress of the investment project, ensuring compliance by participants with the obligations assumed for its implementation, timely identification of risks affecting the possibility of project implementation, preparation of proposals for measures to eliminate them, formation and consolidation of data on the progress of investment projects, ensuring effective interaction and coordination of the activities of project participants, as well as rational and efficient targeted use of state or municipal support measures in the process of its implementation.

Practice was announced in early October

Last week, Deputy Minister of Economy of the republic Oleg Pelevin stated that next year the Government of Tatarstan will put into practice the conclusion of agreements with investors on the terms of the federal law “On the protection and promotion of capital investments”.

Deputy Marat Galeev raised the issue of restarting the new mechanism for stimulating investments at a meeting of the Committee on Economy, Investment and Entrepreneurship of the State Council of Tatarstan. He recalled that in September 2022 Russian Prime Minister Mikhail Mishustin signed a decree to resume the conclusion of agreements on the protection and promotion of capital investments (SZPK). This mechanism plays an important role in restarting the investment cycle, as it offers reimbursement of part of infrastructure costs and compensation for interest payments on loans and borrowings.

Photo: realnoevremya.ru/Oleg Tikhonov

The regions of Russia have been granted the right to prepare conclusions on investment projects. In turn, the authorities will ensure the stability of the legal regime for the implementation of the project.

Oleg Pelevin did not voice Tatarstan's requirements for the volume of investments for the signing of the regional SZPK. The federal norm assumes that the minimum investment should be 750 million rubles for projects in the fields of healthcare, education, culture and sports, as well as the construction of apartment buildings. For projects in the field of agriculture, tourism, food and processing industry — 1,5 billion rubles.

Tatyana Demina
Analytics Tatarstan
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