Kamchatka Region: Development Energy

Vladimir Ilyukhin, Governor, Kamchatka Region:

"Nowadays the global economy experiences more and more attraction to the Asian-Pacific Region. Development of the Russian Far East is also in process.

The Kamchatka Region has a colossal investment potential. Huge water biological resources of the region provided that it is called a main fishing shop of Russia. Mineral resources depots became a basis for many industry sectors. Krai natural assets promote development of all types of tourism. Kamchatka is one of the few places on the globe where nature with all its treasures was preserved undisturbed. Unforgettable natural landscapes, volcanoes, geysers, thermal and mineral springs, glaciers and slopes covered with snow - all that creates a specific and unique image of Kamchatka.

I would like to underline that economics development and attraction of investments into the region development is one of the key focuses of Kamchatka Government. We are always willing to provide all necessary assistance in realization of all enterprises from creation of favourable conditions for business operation on out to supporting of investment projects.

I wish all summit participants a fruitful work and constructive cooperation!"

July 1, 2012 is a date when five years ago Kamchatka Region was formed as a single subject of the Russian Federation. Koryaksky Okrug and Kamchatka Oblast united together their efforts to put the region to positions of stable development. At present nobody doubts that the Administration has chosen the right direction: the Region is developing, the well-being of its inhabitants is growing, the flow of investments to various economy sectors - agriculture, construction, infrastructure and power industry - is increasing. Economy development and attraction of investments to the Region is one of the challenges of the Kamchatka Region Government, which is willing to provide all necessary assistance in realization of all enterprises from creation of favourable conditions for business operation on out to supporting of investment projects. At present the total potential of the Kamchatka Region investment market amounts to RUB 113.26 billion.

Great interest of Russian and foreign investors is generated by the project of modern water supply and disposal system development in Petropavlovsk-Kamchatsky and Elizovsky District. The project involves development and deployment of Bystrinskoye Water Deposit and modernization of the existing water supply system in Petropavlovsk-Kamchatsky, Elizovskaya agglomeration. Bystrinskoye Water Deposit is located higher than the Region capital, thus allowing gravity water supply and power saving of 15 thousand kW per annum. As for the further project development it is expected to establish production of bottled water.

One more line of regional Government investment policies is presented by low-height housing construction. The necessity to develop low-height construction in Petropavlovsk-Kamchatsky and other settlements in the Region was discussed during on-the-spot visit of Russian Prime-Minister Dmitry Medvedev to Kamchatka in July 2012. Today it is one of the perspective projects. Within the Program of Housing Seismic Resistance Improvement many houses which seismic resistance enhancement was considered not advisable will be demolished. The free land plots are planned to be used for low-height construction. That will help to create comfortable and safe living conditions for people.

As to agricultural projects, it is worth reminding that only several decades ago efforts of Kamchatka farmers allowed to fully supply the Peninsula with potatoes, cabbages, carrots, table beet root and other cold-loving vegetables. Nowadays actions aimed at rehabilitation of agricultural production are included into the long-term regional special purpose program Development of the Agriculture and Administration of the Agricultural Products, Raw Materials and Food Market in the Kamchatka Region. Revival of the greenhouse business for growing vegetables on the basis of geothermal sources in Thermalny settlement of Elizovo District and Esso village of Bystrinsky District is deemed as a perspective regional investment project. Fresh vegetables from Thermalny may be delivered to the southern areas of the Peninsiula including the Region center, Petropavlovsk-Kamchatsky. The supplies for Bystrinsky District may go to the North, to ex-Koryaksky Okrug districts.

An entrepreneur from Esso who has already started deployment of his project has been paid RUB 207,524 from the Federal and Region Budgets as reimbursement of some portion of interest payable for loans from Russian credit institutions. About one million more the entrepreneur has received as support for equipment purchase. According with the project planning as early as next year two greenhouses 500 sq. m each will be brought into operation. These were manufactured in Russia and are of frame-type polycarbonate construction with watering, heating and supplement lighting systems.

The Regional Government believes energy economy as one of the key focus areas for Kamchatka Region development. Territorial remoteness of the region is a main reason for high cost of power supplied to Kamchatka. That is what Governor of the Kamchatka Region Vladimir Ilyukhin says: “We need to fully revise approaches to regional power sector development. We need to search for alternative electrical power sources which will allow supplying the Region with affordable power in 10-20 years”.

Construction of the water power station on the Zhupanovo River is among the most perspective projects. Realization of the project was scheduled back in the Soviet time. Three hydroelectric power chains had to be built up the Zhupanovo River. This area does not have a reproductive value, since the salmon practically does not reach it. The capacity of hydroelectric station should have been 415 MW, payback period being only three years. However difficult times of the USSR collapse and transition period made to suspend and to bury later on the project.

At present Kamchtka Region Governor Vladimir Ilyukhin and RusGidro management renewed the idea of water power station construction at the Zhupanovo River and resumed efforts to attract investments for the project.

Government of Kamchatka RegionMinistry of Investments and Business DevelopmentTel:

(+7-415-2) 42-37-34Fax (+7-415-2) 42-37-34

Е-mail: business@kamchatka.gov.ru

www. kamchatka.gov.ru

Svetlana Pogozheva