Residents of the Russian Arctic will be able to get loans at a reduced rate, and companies operating in the Russian Arctic will partially reimburse the cost of creating infrastructure

Residents of the Russian Arctic will be able to get loans at a reduced rate, and companies operating in the Russian Arctic will partially reimburse the cost of creating infrastructure

Recently, Russian Prime Minister Mikhail Mishustin signed several documents aimed at stimulating the socio-economic development of the Arctic. The relevant regulations with the rules for providing infrastructure subsidies and concessional lending are posted on the website of the Government of the Russian Federation and will come into force on January 1, 2021.

Legal entities that have passed a special selection can apply for a Federal subsidy for the creation or reconstruction of infrastructure facilities, as well as technological connection to electric and gas distribution networks as part of the implementation of an investment project in the Arctic zone of the Russian Federation.

As indicated on the Government's website, the subsidy is provided for both under construction and ready-made facilities on the basis of an agreement between the company and the Ministry for the development of the Far East. The minimum cost of an investment project under which compensation is paid is fixed at the level of 300 million rubles.

Loans will be issued for projects in industries that will be determined by the Presidium of the state Commission for the development of the Arctic, with the exception of logging, fishing and mining.

The cost of the investment project should be from 10 million to 2.5 billion rubles, and if it is implemented by several companies applying for a loan at once, the upper limit rises to 5 billion rubles. The document also States that the applicant must invest at least 30% of their own funds and ensure the creation of new jobs.

The concessional loan rate will be lower than the market rate by one and a half times the Central Bank's key rate (currently 4.25% * 1.5 = 6.375%), but not less than 2% per annum.

Investors applying for subsidized rates must have an official status of a resident of the Arctic zone.

According to the approved rules, applicants for the provision of infrastructure subsidies and concessional lending can not be in the process of liquidation or bankruptcy, as well as have overdue debts to the Federal budget.