The outlines of the North Caucasus investment policy became clearer in September after the end of the summer dispute between the Federal departments supervising the issue at the Sochi Investment Forum demonstrated that the focus of state investment policy in the region is being shifted towards extra-budgetary financing. The North Caucasian republics are gradually accepting this new strategy.
According to the Regional Development Minister, Sergey Vereshagin, the total sum of federal investments in the North Caucasian Region's development reached 5.5 billion rubles, which already exceeds the previously expected sum by 2 billion rubles. This might seem surprising, as the Ministry of Finance has recently criticized all extraordinary allocations to any specific regions. However, Vereshagin explained that this increase in funding is constituted by private investors’ initiatives, and not by additional budgetary allocations. The investments were made not only in the actively-promoted tourism sector, but in energy production as well.
One of the major private investors – the ‘RusHydro’ company – is now funding the construction of a hydropower plant in Kabardino-Balkaria, plans to build two more and is prepared to invest 2.7 billion rubles. The plants are scheduled to be launched in 2013 and are expected to cover 20% of the republics demand for electricity.
This influx of company investments in the region is more likely the effect of local administrations’ efforts than those of the federal government.
By Novaya Gazeta.
