Projects of future

46 PROJECTS OF FUTURE – INVESTMENTS IN THE AMUR REGION THE AMUR REGION Blagoveshchensk city is the administrative center The area is 361,9 thousand square km Residential population is 801,8 thousand people REPUBLIC OF SAKHA (YAKUTIA)THE TRANS-BAIKAL Tunda TERRITORY THE AMUR REGION THE KHABAROVSK TERRITORY ÊCÈHÒIÀNÉA Swobodny Belogorsk Blagoveshchensk JEWISH AUTONOMOUS REGION

PROJECTS OF FUTURE – INVESTMENTS 47IN THE AMUR REGION THE AMUR REGION IN FIGURES The Amur Region is a near-border constituent territory of the Russian Federation. It islocated at south-east of the Russian Federation and is a part of the Far Eastern FederalDistrict. The territory of the Region is 750 km long from north to south and 1150 km long fromnorth-west to south-east. The area of the territory is 361.9 thous. sq. km. The Amur Region has border lines with 4 constituent territories of the RussianFederation and the People's Republic of China: in the south – state boundary with PRC (1234 km), in the west– border with the Zabaikalye Territory, in the north – border with the Sakha (Yakutia) Republic, in the east – border with the Jewish Autonomous Region and the KhabarovskTerritory. The administrative centre of the Region is Blagoveshchensk city. It is 7985 km remotefrom Moscow. In the Amur Region the state power is executed by: ∙ The Governor of the Amur Region, the highest official of the Amur Region; ∙ Legislative assembly of the Amur Region, the highest legislative authority of theAmur Region; ∙ The Amur Region Government, the supreme executive authority. Competitive position: - border with PRC, proximity to countries of Asia-Pacific Region; - central position in a transport system of the Far East and international transportcorridors; - availability of production areas which are provided with necessary engineeringinfrastructure; - climatic parameters favorable for development of agriculture; - the richest mineral and raw materials potential; - free generating capacities. As at 01.01.2017, the population amounted to 801,8 thousand people, includingurban population – 67%, rural population – 33%. Density of the population is 2.2 pers./ sq. km. Gross Regional Product per capita is 346,9 thous. rubles. Investments per capita are 160,2 thous. rubles. in 2016 1 place in the Far Eastern Federal District: - for soybean production; - for electricity generation 5th place in the Russian Federation for gold mining

48 PROJECTS OF FUTURE – INVESTMENTS IN THE AMUR REGION INVESTMENT CLIMATE Nowadays the Amur Region is one of the most beautiful and dynamicallydeveloping Far Eastern areas of Russia. The Region is investment-attractive due to itsimmense territory, rich raw materials potential, presence of large and acting export-oriented entities, advantageous geographical position and proximity to countries of Asia-Pacific Region. According to the rating of the investment environments held by “Expert RA” agencyin 2016, the Amur region was rated as the 3B2 region – reduced potential – moderate risk. The Amur region is interested in the attracting investments which are used fordevelopment of the present economical sectors and opening the new ones, creationresearch and production complexes as well as priority social and economic develop-ment areas. In 2016, 128.5 billion rubles were invested in the Amur Region for the development ofthe economy and social sphere, which is 14.2% more than in 2015. One of the main reasons for the growth of investments is the establishment of thepriority development areas and the implementation of investment projects, which areaimed to impulse the region economy. In the Amur Region, three territories for outpacingsocial and economic development were created: Belogorsk (agro-industrial orientation),Priamurskaya (industrial-logistic) and Svobodny (gas-chemical). The following items facilitate the development of investment activity based oninnovation decisions: - effective egislative frameworkwhich create maximally favored investmentconditions; - a system of State support measures for investors. In order to improve the investment climate in the Amur Region, the state program«Economic Development and Innovation Economy of the Amur Region in 2014-2020» hasbeen developed and approved of by the Decree of the Government of the AmurRegion no. 445 dated September 25, 2013. The Amur region annually participates in the National rating of the investmentclimate in the Amur Region, which assesses the conditions created in the region forconducting business and investment activities. The State support for the investment activity on the territory of the Amur Region isrendered in the following forms: - tax privilege and nvestments tax credit; - state guarantees; - provision of various types ubsidies; - information support. The Amur Region Government invites regions, financial institutions and businessentities for collaboration aiming at joint solving the major tasks of economicdevelopment. Dynamics of investment activities in the Amur Region 140 131,1 140 131,3 130 128,5 120 100 119,5 120 billion rubles 115,8 110 % 80 113,1 114,2 60 118,3 91,4 97,1 100 76,4 103,9 90 40 83,9 72,4 20 80 0 70 2010 2011 2012 201 3 2014 2015 2016 Permanent investment, billion rubles Index of actual volume of investment, %

PROJECTS OF FUTURE – INVESTMENTS 49IN THE AMUR REGIONFORMS OF STATE SUPPORT Name Regulations, description of a preferenceProfits tax privilege According to the Law of the Amur Region № 389-ОЗ on the reducedProperty tax privilege tax rate on profits subject to the regional budget dated October 4, 2010, the regional investment projects are exempt from income tax forThe forest plot lease payment 5 years.privilege Under the order № 266-ОZ «On property tax for the entities located atState guarantees on loans which the territory of the Amur Region» dated November 28, 2003 the entitiesare used for realization of which realize investment projects in compliance with taxpayers' typesinvestment projects stipulated by the order, are property tax-freeSubsidies to the producers If the investment project is considered to be a priority one the ratio ofincluding: subsidizing of interest 0.5 is set to the amount of rent payment for forest land usage under therates for bank loans; subsidizing of regulation № 102 «On priority investment projects in the sphere oflease payments; subsidizing of a forest exploitation» issued by the Amur Region Government on Aprilpart of production costs etc. 28, 2008Budget investment In compliance with State guarantees program which is approved byThe right to purchase a forest plot the law «On regional budget for next financial year» and in theon the privilege price procedure defined by the law of the Amur Region № 67-ОZ «On granting procedure of State guarantees of the Amur Region» datedLeasing of forest plots without a June 30, 2008bidding process beingconducted In compliance with the law «On regional budget for next financial year» and in the procedure defined by the Regional Government In accordance with the Law of the Amur Region dated 26.04.2013 № 181-OZ \"On the Investment Fund of the Amur Region\", budgetary investments are provided for the implementation of investment projects of regional and interregional importance, implemented on the principles of public-private partnership. According to the part 5 section 4 of The Amur region Act of agricultural lands usage dated December 11, 2003 year, individuals and legal entities, who are implementing priority agricultural investment projects in the region, can purchase forest plots on the privilege price if the amount of the deduction is less than the priority investment project costs. According to The Amur region Act of land matters regulation on the territory of the Amur region dated December 12, 2008 year, leasing of forest plots to legal entity without a bidding process being conducted for implementing large-scale investment projects is possible if these projects provide the construction of the items which can be constructed according to the Amur region priority investment projects terms.

50 PROJECTS OF FUTURE – INVESTMENTS IN THE AMUR REGION A LIST OF INVESTMENT PROJECTS TO BE OFFERED TO THE INVESTORS Transregional projects 1. Creating a mining and smelting enterprise in the Amur river region Fuel and energy sector projects 2. Ogodzhinskoe coal field complex development project 3. Erkovets TPP construction within high-profile electric energy export )from Russia to China) project 4. Complex development of Sergeevskoe brown-coal field. Coal factory construc- tion. Infrastructure projects 5. Moto-road over the Amur river bridge construction in the area of Blagoveshchensk Russia and HeiHe China 6. Construction of the bridge over the river Zeya 7. Construction of the multifunctional (intermodal) transport and logistics hub with combined cargo-and-passenger automobile checkpoint near terminal bridge cross the Amur river among Blagoveshchensk (Russian Federation) and Heihe (China) House construction projects 8. North residential area development in Blagoveshchensk 9. Develoment of the “Ignatyevskaya country estate” compound on the territory of the Plodopitomnik municipal district of Blagoveshchensk New manufactures development projects 10. Reconstruction of the pharmacological excipient arabinogalactan, dihydroquercetin and medication based on them production shed Lands with investment potential 12. Priority social and economic development area “Belogorsk” 13. Priority social and economic development area “Priamurskaya” 14. Priority social and economic development area “Svobodny” 15. Creation of the tourist-recreational complex “Golden Mile”

PROJECTS OF FUTURE – INVESTMENTS 51IN THE AMUR REGIONTRANSREGIONAL PROJECTSPROJECT: CREATION OF MINING AND SMELTING CLUSTER IN THE AMUR RIVERConcept of the Creation of an iron and steel enterprise complex which willproject have advanced processing of iron ore raw materials with creation of transport and energetic infrastructure objects including the ones of State importance on the territory of the Amur Region and Jewish Autonomous RegionStructure of the It is supposed in the project:project - to develop 5 iron-ore deposits; - to construct three ore mining and processing enterprises (Olekminsky, Garinsky and Kimkano-Sytarsky ones); - to create the Far Eastern integrated iron-and-steel works based on advanced technologies; - to create the infrastructure: Shimanovskaya – Gar railway spur, railway bridge crossing the Amur River near Nizhneleninskoye settlement and Tongjiang town. First step: Development of Kuranakh deposit and construction of Olekminsky ore mining and processing enterprise with the designed capacity of 920 thous. tons of iron-ore concentrate and 290 thous. tons of titanic iron ore concentrate. It is planned to produce titanium dioxide in future. Second step: Development of iron-ore deposits located at Jewish Autonomous Region and construction of Kimkano- Sytarsky ore mining and processing enterprise. The designed capacity of the enterprise is 10 million tons of ore and 3.2 million tons of iron-ore concentrate. Third step: Development of Garinsky iron-ore deposits and construction of an ore mining and processing enterprise the designed capacity of which is 10 million tons of ore producing 7.25 million tons of middling which will be transferred to Kimkano-Sytarsky ore mining and processing enterprise for deep concentration. Forth step: creation of the Far Eastern integrated iron-and- steel works

52 PROJECTS OF FUTURE – INVESTMENTS IN THE AMUR REGION Infrastructure The infrastructure planned for construction: Cost of a project Designing and construction of Shimanovskaya – Gar railway spur the length of which will be 148 km 121 billion rubles including: 65 billion rubles in the Amur Region Period of 2006-2021 realization Indexes of GNI – 19,7% effectiveness NPV– 13861.2 million rubles The investigation In 2009 the project has received the approval of the Investment level of the Committee of the Ministry of Regional Development of the Russian project Federation. The project is included: - in the list of priority investment projects in the Far Eastern Federal District; - the Program of Cooperation between the Regions of the Russian Far East and Eastern Siberia and North-East China (2009-2018); - the Strategy of social-economic development of the Russian Far East and the Baikal Region for the period up to 2025; - Strategy for development of Railway Transport of the Russian Federation until 2030; - Strategy of social and economic development of the Amur Region until 2025; - Program of social and economic development of the Amur Region in 2013-2017. Realization of project steps: First step: in 2010 Olekminsky ore mining and processing enterprise was put into effect in the Amur Region and the designed capacity is reached; Second step: The Kimkano-Sutarskiy mining and processing complex was launched in the Jewish Autonomous region in 2015; Third step: There are planning and surveying as well as geological prospecting works at Garinsky iron-ore deposit. It is planned to reach the designed capacity by 2021; Forth step: From its initial stage in 2018 the production capacities of the Russian Far East metallurgical complex will amount to 1.5 million tons of iron nuggets with the further increase of its volume up to 2.5 million tons per year. The possibility to create the production of steel and steel-rolling products is being considered now.

PROJECTS OF FUTURE – INVESTMENTS 53IN THE AMUR REGION Third step: There are planning and surveying as well as geological prospecting works at Garinsky iron-ore deposit. It is planned to reach the designed capacity by 2021; Forth step: From its initial stage in 2018 the production capacities of the Russian Far East metallurgical complex will amount to 1.5 million tons of iron nuggets with the further increase of its volume up to 2.5 million tons per year. The possibility to create the production of steel and steel-rolling products is being considered nowArea of Countries of Asia-Pacific Region, shipbuilding and aircraftdestination industry, machinery-producing industry of the Far EastCollaborationtype - private-public partnership; -federal budget means for construction of Shimanovskaya – GarPlace of railway spur;construction - investment including foreign investors;Initiator of the - contract agreementprojectInvestors the Amur Region, Mazanovo district, Tynda districtHead of the «Petropavlovsk» group of companiesentity realizing «Rubikon» LLCthe projectContact details «Petropavlovsk» PLC («Petropavlovsk-Ferrous Metallurgy» Ltd., «Rubicon» Ltd., «Amur coal» Ltd., «Kimkanoskoye & Sutarskoye (K&S) mining plant» Ltd., «Garinskoye mining plant» Ltd., «Sovetskaya Gavan Sea Trade Port» CJSC, IRC Ltd We are looking for an investor General Director of «Petropavlovsk – Ferrous Metallurgy» Ltd. Yury Makarov Postal address: Bld. 21/3, Stanislavskogo Str., Moscow city, 109004 Legal address: Office 113, Bld. 43, Lesnaya Str., Moscow city, 127055 Telephone: +7 (922) 238-64-33 E-mail: [email protected] Fax: +7 (495) 981-66-31 Site: http://www.petropavlovsk.net

54 PROJECTS OF FUTURE – INVESTMENTS IN THE AMUR REGION PROJECTS IN THE FUEL AND ENERGY SPHERE PROJECT: COMPLEX DEVELOPMENT OF OGODZHINSKY COAL DEPOSIT IN THE AMUR REGION Concept of the Complex development of Ogodzhinskoye coal deposit. project Structure of the It is supposed in the project: project - supplementary exploration of coal reserves within Gerbikano-Ogodzhinskoye coal deposit area; - 1 stage - the creation of coal mining production with the capacity of 5 million tons per year; - 2 stage - the creation of the coal mining production with the capacity of 30 million tons per year, the construction of Ogodzhinskaya TPP; - the construction of transport infrastructure Infrastructure - electrical network HVL 220 kV «Fevralsk-Rudnaya-Ogodzha»; - automobile road Ogodzha – Fevralsk; - electrified railways Gar- Fevralsk- Ogodzha; - a railway bridge over the river Selemzha Cost of a projec 3,6 billion USD

PROJECTS OF FUTURE – INVESTMENTS 55IN THE AMUR REGIONPeriod of The project implementation period: 2015-2022.realization 2015 - obtaining a license for the right to use subsoil for the purpose of exploration and production of coal at the fieldIndexes of (17.08.2015 LLC \"Ogodzhinskaya Coal Company\" issued aeffectiveness license BLG 15900 TR, valid until 31.08.2040); 2016 - development of the technical project \"Development of hard coal by the open-pit method in the subsoil section of the Sugodinsko-Ogodzha coal-bearing area. first priority\"; 2017 - approval of the technical design and geological exploration, additional exploration of reserves; Development of a feasibility study and design and estimate documentation for the project; 2018-2019 - the first priority construction of the coal-mining enterprise; 2020 - the first priority commissioning of the coal-mining enterprise; 2020-2022 - the second priority construction of the coal- mining enterprise, construction of the Ogodzhinskaya TPP; 2022 - the second priority commissioning of the coal-mining enterprise and Ogodzhinskaya TPP. Payback period – 10 yearsThe investigation Proposals for including the project into the Long-termlevel of the program for development of coal industry until 2030 has beenproject prepared.

56 PROJECTS OF FUTURE – INVESTMENTS IN THE AMUR REGION Area of The Russian Federation and destination countries of Asia-Pacific Region Collaboration - investment including foreign ones; type - contract agreement Place of project Selemdzha and Blagoveshchensk areas, the Amur Region realization Initiator of the «Ogodzhinskaya coal company» LLC project Investors «Ogodzhinskaya coal company» LLC Head of the General Director - Cheburkova Yaroslava Vladlenovna entity realizing the project Contact details 675000, Amur Region, Blagoveshchensk, 301 Zeyskaya st. Chief Accountant - Dorzhinimaeva Tsyndyma, Moscow, 2 Paveletskaya Square, bld. 2. Tel. (495) 407-06-28 ext 151; Mob. tel. 8-903-294-76-36; е-mail: [email protected] Investment Director - Vyacheslav Plyndin, Moscow, 2 Paveletskaya Square, bld. 2. Mob. tel. 8-985-979-038; е-mail: [email protected]

PROJECTS OF FUTURE – INVESTMENTS 57IN THE AMUR REGION PROJECT: CONSTRUCTION OF ERKOVETSKAYA THERMAL POWER STATIONWITHIN THE PROJECT OF LARGE-SCALE POWER EXPORT FROM RUSSIA TO CHINAConcept of the Construction of Erkovetskaya thermal power station, theproject capacity of which is up to 5000-8000 Mwatt at Erkovetskiy brown coalfieldStructure of the It is supposed in the project:project - construction of a coal-fired CHP; - development of a coal mine ; - construction of power output objects for EHV DC transmission from Russia to China; - construction of housing and communal infrastructure. Approximate capacity of the project is 5000 to 8000 MW.Infrastructure The infrastructure planned for construction: - energy infrastructure facilities; - industrial production buildings, office and welfare facilities; - housing objects.Cost of a project 289.84 billion rublesPeriod of 2017-2023realizationIndexes of GNI – 10.97 %effectiveness NPV – 43.2 billion rublesThe investigation The projects is approved by the Expert Board of the RFlevel of the Regional Development Ministry and is included into theproject program of collaboration between the Far Eastern regions, the RF Eastern Siberia and north-east of PRC (2009-2018). A preliminary study on the project feasibility has been conducted.

58 PROJECTS OF FUTURE – INVESTMENTS IN THE AMUR REGION Area of The Russian Federation, PRC destination Collaboration Creation of a joint enterprise type Place of Varvarovka settlement, Oktyabrsky area, the Amur Region construction Initiator of the «Vostochnaya energy company» OJSC («INTER RAO EES» project OJSC group) Investors We are looking for an investor Head of the entity Director General of realizing the «Vostochnaya energy company» OJSC project Mikhail Vadimovich Shashmurin Contact details h. 13/1, 50 let Oktyabrya str., Blagoveshchensk city, 675000, the Amur Region, tel./fax: (4162) 22-26-41, the city of Moscow, street Bolshaya Pirogovskaya, 27, building 1 tel. (495) 664-88-40, e-mail: [email protected]

PROJECTS OF FUTURE – INVESTMENTS 59IN THE AMUR REGIONPROJECT: COMPLEX DEVELOPMENT OF SERGEEVSKY BROWN COAL DEPOSIT. THE CONSTRUCTION OF THE COAL MINING COMPLEXThe idea of the The complex development of Sergeevsky brown coalproject deposit with the capacity of 1 million tons of ore, the construction of a coal plant for production of fuel oil,Structure of the gasoline, energy gas, coal briquettes on the basis ofproject Sergeevsky and Svobodnensky brown coal deposits The project calls for: - the creation of experimental-industrial plant of the extraction of mountain wax from the coal of Sergeevsky brown coal deposit; - the construction of the open pit mining (technopark, industrial park of the coal cut, power supply); - the construction of a factory of modular type for the processing of coal with the receipt of mountain wax and humic fertilizers; - construction of a coal plant for production of 60 thousand tons of fuel oil, 10 thousand tons of gasoline, 60 million cubic meters of energy-gas, 365 thousand tons of coal briquettesInfrastructure Planned infrastructure for the construction: - energy infrastructure (electric power lines with a length of 10 km; - the objects of transport infrastructure (automobile road with a length of 25 km)Cost of a project 1.700 million rublesPeriod of 6 yearsrealization 1 stage - preparation of the feasibility report of the project, design estimates of the project, obtaining the license, the organization of the production open pit mining (land and mountain taps, industrial site, technopark of the coal cut, energy supply), creation of experimental-industrial plant of the extraction of mountain wax from coal of Sergeevsky brown coal deposit.

60 PROJECTS OF FUTURE – INVESTMENTS IN THE AMUR REGION stage 2 - preparation of a platform under construction, and the construction of a factory of modular type for the processing of coal with the receipt of mountain wax and humic fertilizers. 3 stage - construction of a coal plant for production of fuel oil, gasoline, energy gas, coal briquettes Indicators of The effect from realization of the project involves the project efficiency manufacturing of the products new for the Amur Region on the basis of innovation technologies in brown coal processing, the creation of coal chemistry. The realization of the project will allow to increase the revenues to the budget system, as well as to create new jobs in the specified region The degree of The technology is protected by patents. elaboration of the A feasibility study is under development. project The investment proposal for the search of investors is Sales markets prepared Domestic market of the Amur Region Ways of - the creation of joint ventures, direct investments, investing, cooperation including at the expense of foreign investors The place of Blagoveshchensk district, Amur Region project realization Project initiator Institute of Geology and Nature Management, Russian Far Eastern Branch of the Russian Academy of Sciences Investors We are looking for an investor The head of the Director - Sorokin Andrey Anatolievich organization implementing the Bld. 1, Relochny Lane, Blagoveshchensk city, project Amur Region, 675000 Contact Tel./Fax: 8 (4162) 225-325 information

PROJECTS OF FUTURE – INVESTMENTS 61IN THE AMUR REGIONINFRASTRUCTURE PROJECTSPROJECT: CONSTRUCTION OF HIGHWAY BRIDGE ACROSS THE AMUR RIVER IN BLAGOVESHCHENSK (THE RF) – HEIHE (PRC) AREAConcept of the Interconnection of auto transport systems of Russia andproject China aimed at developing of foreign economic relations and formation of international trafficStructure of the It is supposed in the project:project - to construct a highway bridge crossing: bridge across the Amur river body (joint construction with PRC) – 1081 m, a bridge across the Kanikurganskaya duct – 278 m, access roads and embankment on Kanikurganskiy island – 1.8 km; - to construct an access road of 2nd category – 11.3 km; - construction of a border-crossing point for vehicles.Infrastructure The infrastructure planned for construction: - access road of 2nd category; - border crossing point; - transport and logistics complex.Cost of a project 19 billions rubles, including 14 billion rubles from the Russian side and - 5 billion rubles from the Chinese side

62 PROJECTS OF FUTURE – INVESTMENTS IN THE AMUR REGION Period of 2016-2019 realization Indexes of GNI – 12% effectiveness NPV – 4 billion rubles The investigation The development of design documentation for the level of the construction of the main bridge and access roads has project been completed. A positive conclusion on the technical part of the design documentation of the Federal autono- mous institution \"Glavgosexpertiza of Russia / Main state expertise of Russia\" was received. JSC \"Giprostroymost Institute\", Moscow, is developing project documentation for the construction of a pay point. On December 24, 2016 on the border river Amur the official ceremony of starting the construction of the border bridge took place on the main bridge. On March 29, 2017 the building permission was received. Technical conditions for technological connection to electric grids of the Far Eastern Distribution Company are being met.

PROJECTS OF FUTURE – INVESTMENTS 63IN THE AMUR REGIONArea of China, Russiadestination Concession agreementCollaborationtypePlace of Blagoveshchensk city, the Amur Regionconstruction the Amur Region GovernmentInitiator of theproject Limited Liability Company for the Development and Construction of the Amur (Heilongjiang) BridgeInvestorsHead of the The Amur region Minister of transport and constructionentity realizing Tyaglo Andrey Vladimirovichthe projectContact details 206, Zeyskaya Str. Blagoveshchensk city, Amur Region Russia, 675000 tel./fax: (4162) 22-39-48 , е-mail: [email protected]

64 PROJECTS OF FUTURE – INVESTMENTS IN THE AMUR REGION Project: The construction of the bridge crossing over the river Zeya in Blagoveshchensk Projects aim The construction of the bridge crossing over the river Zeya in Blagoveshchensk Projects body The project includes the construction of the following items: - right side crossing; - a bridge over the river Zeya; - left side crossing with 2 road interchanges Infrastructure Power supply items are planning to be built Project coast 12,8 billion rubles (In the prices of the 1st quarter of 2014) Project execution 42 months time Project success __ criteria Status of the The project documentation has been developed. Prior project approval from the General Board of State Expert Review has been received. The Land planning project has all the information about forest plots needed for the construction items of the present project.

PROJECTS OF FUTURE – INVESTMENTS 65IN THE AMUR REGIONMarket outlet RussiaCooperation By agreementmethodPlace of Blagoveshchensk, Amur region.constructionProject promoter The Amur region Minister of transport and construction, national public establishment «Amuruprador»Investors We are looking for an investorHead of theproject The head of the Amur region Minister of transport andexecuting constructioncompany Tyaglo Andrey VladimirovichContact The head of the national public establishment «Amuruprador»information Selin Alexander Valerjevich 675000, Amur region, Blagoveshchensk, Zeyskaya str., 206 ph./fax: (4162) 22-39-46, å-mail: [email protected]; ph. (4162) 22-16-10, å-mail: [email protected];

66 PROJECTS OF FUTURE – INVESTMENTS IN THE AMUR REGION PROJECT: CONSTRUCTION OF THE MULTIFUNCTIONAL (INTERMODAL) TRANSPORT AND LOGISTICS HUB WITH COMBINED CARGO-AND-PASSENGER AUTOMOBILE CHECKPOINT NEAR TERMINAL BRIDGE CROSS THE AMUR RIVER AMONG BLAGOVESHCHENSK (RUSSIAN FEDERATION) AND HEIHE (CHINA) Concept of the Construction of the state border automobile checkpoint is project planned for a operation of bridgework. In the bridgework and checkpoint surface area is construction of logistics hub in works. This project will create the largest intermodal logistics center on the Far East servicing freight traffic across Sino- Russian border by the new transport corridor “Amur 1” Project The following is planned by the project: description construction and equipment of the automobile checkpoint construction of transport-logistics center objects: storehouse with handling operations and railside platforms; checkpoint; administration house; container and customs terminals Infrastructure Needed infrastructure for transport-logistics hub and automobile checkpoint: 1. Electrical power supply: 10 kW electric lines feeder №16 from substation “Volkovo” (110/35/10) OJSC DRSK with 2,6 mW capacity. Electricity supply will be provided during realization of cross border terminal bridge construction. An investor needs to make provision for electric systems inside platforms. 2. Heat supply system. Construction of an autonomous boiler- house is needed. 3. Water supply. Construction of a water-well hole is needed. 4. Wastewater disposal. Construction of a pumping point and local purification works are needed. 5. Communication service. Optical fiber wire laying along the route of terminal bridge with connection of hub and checkpoint is planned by the following project. 6. Нighway transportation facilities. Service roads from the terminal bridge to automobile checkpoint are planned by the following project. Transport logistics hub, automobile checkpoint and terminal bridge are interconnected and have safety access.

PROJECTS OF FUTURE – INVESTMENTS 67IN THE AMUR REGIONProject costs Appraised value of hub and checkpoint construction is 7 823,7 mln. rub. (estimated in 2017) including transport logistics hub – 5Project deadline 977,9 mln. rub. and automobile checkpoint – 1 845,8 mln. rub.Performanceindicators 2018-2019Degree Payback period – 7,1 years,of readiness Discounted payback period – 8,5 years Net present value – 1 371 mln.rub Profitability index – 21% Internal rate of return – 11% Investment proposal, financial model and technical specifica- tions are preparedMarket Asia-Pacific Region, China, RussiaPartnershipConstruction Operating joint venture company, direct investment.location Advanced special economic zone residence for an investorProject initiator Two platforms: Kanikurgan (Blagoveschensk rayon), Rovnoe (Ivanovsky rayon) - Advanced special economic zone “Priamurskaya”. Under enacted by the Amur region government site planning for construction of transport and logistics hub a land plot with an area of 51,3 ha is given. (Extra territory 120 ha), for an automobile checkpoint construction – 39 ha. ANCO Amur Region Investment AgencyInvestors Finding investorsCEO of the project Puzanov Pavelcompany ANCO Amur Region Investment Agency CEOContacts 675000, Amur region, Blagoveshchensk, Shevchenko str. 46/2 Phone: + 7 41 62 772 608, +7 914 063 05 00 E-mail: [email protected]

68 PROJECTS OF FUTURE – INVESTMENTS IN THE AMUR REGION Project: Construction of the transborder cable railway over the river Amur between Blagoveshchensk Russia and HeiHe China Projects aim International tourism development in the region Projects body The project includes the construction of the following items: - three-cable railway; - 2 passenger terminals; - free zone shopping mall Infrastructure The following items are planning to be built: - power supply system; - water supply system; - sewer system facilities; - heat supply system Project coast 2,8 billion rubles Project execution 2016-2019 years time Project success GNI– 15,8 % criteria NPV – 604,0 million rubles Payback period – 8,2 years Status of the Feasibility study has been completed. The technical aspect of project the project has been agreed with the Chinese side. A variety of associating agreements have been signed by investor and HeiHe Heilongjiang province authorities. Market outlet People's Republic of China

PROJECTS OF FUTURE – INVESTMENTS 69IN THE AMUR REGIONCooperation - investing;method - contractual relationshipPlace of On the raised shore territory, built up within the “Shoreconstruction protection and the Amur river bank reconstruction” in Blagoveshchensk Heihe cross-border region.Project promoter «Z Development» LLCInvestors «Z Development» LLCHead of theproject Executive general manager «Z Development» LLCexecuting Zubkov Alexey BorisovichcompanyContact 675997, Amur Region, Blagoveshchensk, 235 Gorkogo St.,information bld. 2, office 502 е-mail: [email protected]

70 PROJECTS OF FUTURE – INVESTMENTS IN THE AMUR REGION HOUSING CONSTRUCTION PROJECTS PROJECT: DEVELOPMENT OF «NORTH RESIDENTIAL AREA» OF BLAGOVESHCHENSK CITY Concept of the The development of North residential area of Blagoveshchensk project city, the total accommodation area will be 1707 thous. sq. m. located at 237 ha; the population will be 40.7 thous. people. Structure of the It is supposed in the project: project - to construct five urban districts which will include: - sectional type houses with different number of floors Infrastructure (up to 17 floors) and different comfort level (from economy class up to elite housing); - infrastructure objects located at first two floors of houses; - office and hotel buildings; - social and engineering infrastructure Available infrastructure: - Circumference of water supply networks of capital construc- tion facilities is carried out; - the sewage collector has been reconstructed; - construction of main streets with outdoor lighting networks was completed (first priority - 50 October street from Koltseva street to Shkolnaya street). Planned infrastructure for construction: - reconstruction of the water intake of the Northern residential area; - reconstruction of sewage treatment plants in the Northern residential area; - engineering infrastructure; - construction of main streets. Cost of a project 98.8 billion rubles Period of realization 2007-2020 Indexes of GNI – 29.3 % effectiveness Payback period – 30 months

PROJECTS OF FUTURE – INVESTMENTS 71IN THE AMUR REGIONThe investigation The project is under implementation since 2007.level of the Construction of objects is carried out at the expense ofproject budgetary funds. The project is included in the Program of Cooperation between the Regions of the Far East, Eastern Siberia of the RF and the North-East of the PRC (2009-2018)Area of destination The Amur RegionCollaboration - share participation in construction of housing and commer-type cial property; - investment in social objects; - investment in infrastructure; - contract agreementPlace of Blagoveshchensk city, the Amur Regionconstruction Blagoveshchensk city AdministrationInitiator of theprojectInvestors The government of the Amur region, the administration of the city of BlagoveshchenskHead of the entity We are looking for an investorrealizing theproject Blagoveshchensk city mayor Kalita Valentina SergeevnaContact details 133, Lenina str., Blagoveshchensk city 675000, the Amur Region, tel./fax: (4162) 59-57-00, е-mail: [email protected]

72 PROJECTS OF FUTURE – INVESTMENTS IN THE AMUR REGION PROJECT: DEVELOPMENT OF «IGNATIEVSKAYA USADBA», THE TERRITORY NEAR PLODOPITOMNIK SETTLEMENT, MUNICIPAL UNIT OF BLAGOVESHCHENSK CITY Concept of the Development of the Plodopitomnik settlement territory project (Blagoveshchensk city) the total area of which is 338 thous. sq. m. located at 402 ha aimed for 13.3 thous. people Structure of the It is supposed in the project: project - housing construction – 338.5 thous. sq. m. (construction of multi- family housing, single family homes and townhouses for 13.3 thous. people; - construction of social infrastructure objects (3 children's pre- school institutions, 2 schools, cultural objects and sports facilities) - 43750 sq. m.; - construction of engineering infrastructure facilities Infrastructure The infrastructure planned for construction: - communal infrastructure; - auto roads; - objects of social and cultural as well as municipal-domestic service Cost of a project 12 billion rubles Period of 2010 - 2020 realization Indexes of GNI – 30.5% effectiveness NPV – 142 million rubles Payback period – 1.4 years The investigation The feasibility study and business plan are worked out; the site level of the planning is approved. The draft site planning is fulfilled. project Working documentation is ready and there is a permit for low-rise housing construction.

PROJECTS OF FUTURE – INVESTMENTS 73IN THE AMUR REGIONCollaboration The designing of high-rise housing and construction works oftype transport infrastructure are in progress.Area of The works on clearing and grubbing as well as road constructiondestination are in progress. The technical conditions for connection to electric network, heatPlace of and water supply systems are receivedconstruction The Amur RegionInitiator of theproject - share participation in construction of housing and commercial property;Investors - investment in social objects;Head of the - investment in infrastructure;entity realizing - contract agreementthe project Blagoveshchensk city, the Amur RegionContact details «Bureyazhilpromstroy» Limited Liability Company We are looking for an investor Director General of «Bureyazhilpromstroy» LLC Platonov Vyacheslav Viktorovich 159/1, Polytechnic str. Blagoveshchensk city 675003, the Amur Region, tel./fax: (4162) 42-11-83, å-mail: [email protected]

74 PROJECTS OF FUTURE – INVESTMENTS IN THE AMUR REGION NEW MANUFACTURES DEVELOPMENT PROJECTS Project name: Reconstruction of the pharmacological exipient arabinogalaktan, dihydroquercetine and medication based on these exipients production shed Projects aim Developing an up-to-day production line of the pharmacological exipient arabinogalaktan, dihydroquercetine and medication based on these exipients “Laviocard” Projects body Present project is aimed on the reconstruction of an old owned production building Infrastructure Utility infrastructure items are planned to be built Project coast 195,7 million rubles Project execution 2 years time Project success GNI - 53,2 % criteria NPV - 213,7 million rubles Payback period - 4 year Status of the Feasibility study and construction documents have been project prepared. The shed building and production line have been Market outlet bought. Now some general construction works are being carried out. Russian Federation, foreign countries

PROJECTS OF FUTURE – INVESTMENTS 75IN THE AMUR REGIONCooperation - investing;method - contractual relationshipPlace of The Amur region, BlagoveshchenskconstructionProject promoter «Amethyst» CCInvestors We are looking for an investorHead of the Executive general managerproject Ostronkov Vladimir SergeevichexecutingcompanyContact 675000, Amur region,information Blagoveshchensk, Naberezhnaya str., 68, ph.: (4162) 33-34-42, 33-11-99, å-mail: [email protected]

76 PROJECTS OF FUTURE – INVESTMENTS IN THE AMUR REGION AREAS WITH INVESTMENT POTENTIAL Name of the area: Priority social and economic development area «Belogorsk» (PDA «Belogorsk») Area's aim High-quality production and manufacturing development Projects body The project suggests: - development of agricultural processing production; - development of conversion of forest resources production ; - development of the construction materials production; - other manufacturing productions Location of the The Amur region, Belogorsk area: distance The area is located about 1327 m to south-west, Belogorsk 429 in km block 0,5 km – to highway Belogorsk-Blagoveshchensk, 2,5 km – to federal road «Amur», 5 km – to nearest cargo railway station of the Trans-Siberian railway Belogorsk-2, 120 km – Blagoveshchensk. Square area 678,58 ha with the possibility of enlargement to 1000 ha Infrastructure Available infrastructure: - transportation: the aria is located on the Trans-Siberian railway, there is a 1,5 km return dead-end (Russian Railway OSC), there is a federal road “Amur” along the area's border; - power supply: there is a power supply line 3 km to north-west from the PDA Belogorsk 220 kw;

PROJECTS OF FUTURE – INVESTMENTS 77IN THE AMUR REGION - telecommunication – there are telecommunication facilities 1.5 km from the area border. The equipment capacity is 960 numbers, 155 free number. MTC, Beeline and Megafon companies' lines networks cover the PDA Belogorsk area. Infrastructure to be built: - power supply items (transformer substation, power transmission line HV line 110 kw); - water supply system (elevated water tank, water well hole, inner water elevated line network); - sewer system facilities; - heat supply system (boiler house, inner heating main); - telecommunication items (telephone line and Internet fiber optic cable installation, increasing of the numbering capacity by 150 number) - construction of the road approach to federal roads and inner tracks.Project execution 2015-2085 yearstimeCooperation Gaining the resident statusmethods - public and private partnership; - investing by private Russian and foreign investors on the following terms: Registration on the territory of the municipal entity where PDA is situated; Signing the industrial production activities permit report on the territory of PDA.

78 PROJECTS OF FUTURE – INVESTMENTS IN THE AMUR REGION Residency Profits tax: federal part - 0% first 5 years; region part – 0% for 5 preferences years and 10% next 5 years. Property tax: 0% for 5 years and 1.1 % next 5 years. Market outlet Land-value tax: 0 % for 3 years. Management Non-budget funds deductions are reduced to 7.6% for 10 company years. Investors Free customs zone regime – duty-free and tax-free importation, usage and storage of foreign goods within PDA. Contact information Russian Federation and APAC countries «Far East Development Corporation» joint stock company Russian and foreign companies which conform to the federal act ¹ 473-FA “About priority social and economic development areas in Russian Federation” dated December 29, 2014 year. «Far East Development Corporation» management company 123317, Moscow, 8 Presnenskaya naberezhnaya, bld. 1, floor 7, capital group \"Capital City\", Northern Block; Tel. 8-800-707-55-58, e-mail: [email protected], site: http://www.erdc.ru. Representative of the Corporation in the Amur Region - Uvarov Andrey Ivanovich, tel. 89246705129, e-mail: [email protected]. Amur region Economic Development Ministry 675023, Amur region, Blagoveshchensk, Lenina str., 135, ph. (4162) 232-140, e-mail: [email protected]. Belogorsk city government: 676850, Amur region, Belogorsk, Gagarina str., 2, ph./fax (41641) 2-34-31, 2-03-51, e-mail: [email protected]

PROJECTS OF FUTURE – INVESTMENTS 79IN THE AMUR REGIONName of the area: Priority social and economic development area «Priamurskaya» (PDA«Priamurskaya»)Area's aim Manufacturing, transport and logistic and other productionsLocation of the The Amu region, Blagoveshchensk areaarea: distance 0,5 km - to road «Belogorsk Blagoveshchensk»,in km 2 km - Rovnoe village, 16 km - to future automobile bridge over the river Amur between Blagoveshchensk (Russia) and HeiHe (China) 19 km - Blagoveshchensk, 19 km - nearest cargo railway station Blagoveshchensk, 20 km - close-in port “Blagoveshchensk trading port” Cjc, 20 km - international boarder-entry point «Blagoveshchensk- HeiHe», 110 km - to federal road «Amur» Ð297, Ì58,Square area 855, ha with the possibility to enlarge to 1042,81 haInfrastructure There is no infrastructure available. Infrastructure to be built: - items of energy supply system, water supply system, sewer system, heat supply system, construction of the road approach to federal roads and inner tracks.Project execution 2015-2085 yearstimeCooperation Gaining the resident statusmethodsResidency Profits tax: federal part - 0% first 5 years; region part - 0% for 5preferences years and 10% next 5 years. Property tax: 0% for 5 years and 1.1 % next 5 years. Land-value tax: 0 % for 3 years. Non-budget funds deductions are reduced to 7.6% for 10 years.

80 PROJECTS OF FUTURE – INVESTMENTS IN THE AMUR REGION Market outlet Free customs zone regime - duty-free and tax-free importation, Management usage and storage of foreign goods within PDA. company Investors Amur region, Far East Federal District units, People's Republic of China Contact information Amur region, Far East Federal District units, People's Republic of China Russian and foreign companies which conform to the federal act ¹ 473-FA “About priority social and economic development areas in Russian Federation” dated December 29, 2014 year. «Far East Development Corporation» management company 123317, Moscow, 8 Presnenskaya naberezhnaya, bld. 1, floor 7, capital group \"Capital City\", Northern Block; Tel. 8-800-707-55-58, e-mail: [email protected], site: http://www.erdc.ru. Representative of the Corporation in the Amur Region - Uvarov Andrey Ivanovich, tel. 89246705129, e-mail: [email protected]. Amur region Economic Development Ministry 675023, Amur region, Blagoveshchensk, Lenina str., 135, ph. (4162) 232-140, e-mail: [email protected]. Blagoveshchensk district administration: 675000, ã. Blagoveshchensk, Zeyskaya st., bl. 198, ph. (4162) 22-16-90, e-mail: [email protected]

PROJECTS OF FUTURE – INVESTMENTS 81IN THE AMUR REGIONName of the area: Priority social and economic development area «Svobodny» (PDA «Svobodny»)Area's aim Priority social and economic development area is oriented towards the creation of industrial, gas chemical and other industries.Location of the Amur Region, Svobodnensky district and Svobodny cityarea: distance 2 km to Chernigovka village, Svobodnensky districtin km 11 km to the Svobodny city, 26 km to the federal highway \"Amur\" P297, 144 km to the international checkpoint \"Blagoveshchensk- Heihe\". Amur Region, Skovorodino city 3 km to the federal highway \"Amur\" P297, 3,5 km to Skovodorino city, 1.377 km to the nearest transport crossing of the Russian border Zabaikalsk - Manchuria and 1.166 km to Nizhneleninskoye - Tongjiang.Square area 69.9 hectaresInfrastructure Construction of the largest gas processing plant in Russia. Proximity to the Trans-Siberian railway and urban infrastructure (3-11 km.). Construction of social infrastructure at the expense of the federal budget.Project execution 2017-2087 yearstimeCooperation Gaining the resident statusmethods

82 PROJECTS OF FUTURE – INVESTMENTS IN THE AMUR REGION Residency Profits tax: federal part - 0% first 5 years; region part – 0% for 5 years preferences and 10% next 5 years. Property tax: 0% for 5 years and 1.1 % next 5 years. Market outlet Land-value tax: 0 % for 3 years. Management Non-budget funds deductions are reduced to 7.6% for company 10 years. Investors Free customs zone regime – duty-free and tax-free importation, Contact usage and storage of foreign goods within PDA information Amur region, Far East Federal District units, People's Republic of China «Far East Development Corporation» joint stock company Russian and foreign companies which conform to the federal act № 473-FA “About priority social and economic development areas in Russian Federation” dated December 29, 2014 year «Far East Development Corporation» management company 123317, Moscow, 8 Presnenskaya naberezhnaya, bld. 1, floor 7, capital group \"Capital City\", Northern Block; Tel. 8-800-707-55-58, e-mail: [email protected], site: http://www.erdc.ru. Representative of the Corporation in the Amur Region - Uvarov Andrey Ivanovich, tel. 89246705129, e-mail: [email protected]. Amur region Economic Development Ministry 675023, Amur region, Blagoveshchensk, Lenina str., 135, ph. (4162) 232-140, e-mail: [email protected]. Svobodnensky district Administration 676450, Svobodny city, 50 Let Oktyabrya st., bld.14, tel. (41643) 3-05-78, e-mail: [email protected]. Svobodny city Administration 676450, Svobodny city, 50 Let Oktyabrya st., bld.14, tel. (41643) 3-02-38, e-mail: [email protected]. Skovorodino city Administration 676011, Skovorodino, Pobedy St., Building 33, tel. (41654) 2-22-34, e-mail: [email protected].

PROJECTS OF FUTURE – INVESTMENTS 83IN THE AMUR REGIONPROJECT: CREATION OF THE TOURIST-RECREATIONAL COMPLEX «GOLDEN MILE»Concept of the Creation of an international level entertainment zoneprojectStructure of the The project assumes 5 functional zones:project - a zone of business, public, commercial purpose (8 hectares);Infrastructure - a zone of a cross-border cable car (5 ha); - a tourist and recreational center for active recreation (9.5 hectares); - cultural and recreational zone (11 hectares); - historical and cognitive complex (9 hectares) Planned infrastructure for construction: - development of an alluvial territory of 40 hectares; - power supply facilities; - water supply facilities; - water disposal facilities; - facilities of treatment facilities; - heat supply facilitiesCost of a project 12,28 billion rublesPeriod of 2014-2020realizationIndexes of The growth of the contribution of tourism to GRP from 0.05%effectiveness (2015) to 1.5% (2022)

84 PROJECTS OF FUTURE – INVESTMENTS IN THE AMUR REGION The investigation The concept of the project is developed. level of the The object of the providing infrastructure \"Reconstruction of the project sewage collector from the Northern residential area to sewage treatment facilities, Blagoveshchensk, Amur Region, 4th priority\" is included in the federal target program \"Development of domestic and incoming tourism in the Russian Federation (2011-2018)\" Area of destination Domestic, inbound and outbound tourism Collaboration - private-public partnership; type - land plots renting; - investment and (or) construction of infrastructure facilities; - investment and (or) construction of commercial purpose objects Place of Blagoveshchensk city, the Amur Region construction Initiator of the the Amur Region Government project Head of the Minister of Foreign Economic Relations, Tourism and entity realizing Entrepreneurship of the Amur Region the project Dmitrienko Sergey Mikhailovich Minister of Economic Development of the Amur Region Contact details Balova Svetlana Igorevna 675023, the Amur Region, Blagoveshchensk, 135 Lenina st. Ministry of Foreign Economic Relations, Tourism and Entrepreneurship of the Amur Region Phone / fax: (4162) 22-44-03, e-mail: [email protected]; Ministry of Economic Development of the Amur Region Tel.: (4162) 23-21-00, fax: (4162) 23-21-05, e-mail: [email protected]

DEAR LADIES AND GENTLEMEN! We have briefly presented you the investment projects which are both being realized and planned to be realized on the Amur Region territory. We hope for effective cooperation!We are ready to answer all the questions you have and to give you the additional information. OUR CONTACT DETAILS: Ministry of economic development for the Amur Region 135, Lenina str. Blagoveshchensk city, 675000, the Amur Region, tel. (4162) 232-100, fax (4162) 232-105 e-mail: [email protected], web-site: http://mer.amurobl.ruMinistry of external economic relations, tourism and entrepreneurship for the Amur Region 135, Lenina str. Blagoveshchensk city, 675000, the Amur Region, tel./ fax 8(4162) 22-44-03, e-mail: [email protected], web-site: http://www.vstamur.ru Autonomous non-commercial organization \"Investment promotion agency of the Amur Region” 675000, Amur Region, Blagoveshchensk, 46/2 Shevchenko st. Tel.: (4162) 772-608, 8914-063-05-00, å-mail: [email protected] Investment portal of the Amur Region: http://invest.amurobl.ru