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17 August 2020

CREON Group joins launch of the first SEZ in Perm Krai

The Government of Perm Krai, Creon Capital and Creon Energy Asia (both companies are part of the CREON Group) signed the agreement to develop a special economic zone (SEZ) in the region. Tax preferences for companies willing to invest in own production in the SEZ will remain in force for 49 years. The special economic zone will be created at the industrial hub in Osentsy.

The agreement was signed by Dmitry Makhonin, acting Governor of Perm Krai, Ruslan Zaidan, Financial Director of Creon Capital (a management company of Luxembourg-based Creon Energy Fund), and Nikolai Asatiani, CEO of Creon Energy Asia. Under the signed agreement, the parties shall enter into negotiations with potential investors.

The residents of the special economic zone shall be granted preferential taxation regulations for 49 years: full exemption from land tax, property tax, transport tax, and a minimal rate of profit tax at 2%. Such measures are intended to reduce the investment cycle, to shorten the payback period, and to improve margins. Currently, over 80 large industrial investment projects are being implemented in Perm Krai, with total investment of 1.6 trillion rubles.

“Special economic zone is an effective tool for companies that are ready to invest in own production. This type of support, involving preferential taxation, is new for Perm Krai. I am convinced that it will be of interest not only for the large corporations, but also for small and medium companies. The special economic zone regulations will remain in force for 49 years. This is an opportunity for businesses to implement large investment projects with lengthy cycle”, noted Dmitry Makhonin, acting Governor of Perm Krai.

“CREON Group has immense experience in attracting international financing into projects in Russia, and the expertise of our companies covers the real sector of the economy. Our core competence lies in petrochemical and power projects, including renewable energy. Without doubt, the special economic zone project in Perm Krai is within our interest, – said Fares Kilzie, Chairman of the Board of CREON Group. – It is gratifying to know that the key partner is this project is SIBUR, a leader in the petrochemical industry in Russia”.

The launch of the special economic zone is planned for 2021. The SEZ will be located in Gamovo rural community, covering 200 ha of land. The area of the future SEZ is neighboring with enterprises of LUKOIL-Permnefteorgsyntez and SIBUR; the latter has already approved participation in the development of the zone. It is planned to construct an additional exit road from the industrial hub to reduce the transport pressure on the locality. Negotiations with Russian Railways are underway to provide railroad infrastructure to the SEZ.