Russian government tightened conditions for obtaining priority investment project status

The Russian government has made changes in the rules of granting subsidies to the forest-based enterprises for implementation of investment projects. The corresponding regulation #862 dated 27 August 2014 was published on the official website.

Experts draw attention to two major innovations. First, state subsidies will now only apply to forest industry projects that involve borrowings of the Russian credit institutions as well as VEB (Vnesheconombank), a state bank.

Second, it introduces a minimum investment level to apply for the priority status. In the woodworking, it amounts to 500 million roubles, in the pulp and paper industry – to 3 billion roubles.

Discussions about necessity of more stringent criteria were held for quite a long time. This measure will definitely lead to a decrease in the number of new priority projects, but note also that for biofuel projects, the government is going to lower the entry investment level.