2 2012
2012
Brief summary of investment inv estment program
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Երևանի ջերմատնային գոտու ծրագրի ներդրումների կատարման աջակցման մեխանիզմները
Brief summary of investment investment program
Program Description The Investment Program on the Construction and Development of State-of-the-Art Art Greenhouses G in the Vicinity icinity of the Yerevan TPP has been approved by the RA Government protocol decree № 17 of May 3, 2012 session •
In order to implement the program, the RA Government has allocated 69 ha area, area on which it is anticipated to build totally 50 ha greenhouse mainly for vegetable production;
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The land area has been preliminarily reliminarily divided into 9 lots each with 5-11 ha area. At the investors’ suggestion, the sizes of the lots may become smaller - up to 3 ha;
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The land is to be alienated to investors at 7000 AMD per m2 with full ownership rights including the amount of investment for main supply infrastructures, i.e. thermal and electric energy, water and gas supply, as well as water discharge infrastructures. infrastructures. The main supply infrastructures are to be built up to the marginal section of investors’ investors’ plots of land, after which, investors build the infrastructures;
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The program is funded through private investments;
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The investor is absolutely free in realising the products. The program management company will provide assistance in case if an investor wishes. wishes. It is anticipated to realize the major part of the products in foreign markets.
Government Support The program has been approved by the RA Government and receives the following state support: •
Land is sold not at market price, but on the cadastral value;
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The thermal energy of the TPP is provided in such tariff which results in reducing heating expenses by 40% compared with heating through boiler working with gas ;
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According to the RA Government decree it is possible to postpone the deadline for paying the VAT of the goods and equipment imported for the greenhouse construction for 3 years.
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In order to involve borrowings the government provides guarantee in the amount equal to 80% of the land value which makes up 135 000 USD per 1 ha;
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Obtaining favorable conditions for the realization of the products in foreign markets on the basis of intergovernmental agreements; agreements
Program Management Company The Armenian Harvest Promotion Centre CJSC, which is a public-private public private cooperation company 49% shares of which is owned by the government and 51% - by private sector, is entitled to be the program management company.. The Program management is authorized to provide investors with the following assistance:
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Երևանի ջերմատնային գոտու ծրագրի ներդրումների կատարման աջակցման մեխանիզմները
Brief summary of investment investment program
Facilitation of the relations with state agencies, including in the process of obtaining document permissions; In the process of attracting financal resources from foreign financial institutions or markets; In the process of the realisation of the grenhouse pruducts in foreign markets through creating the “umbrella” umbrella” brand and establishing cooperation with large buyers.
Main Financial Characteristics of the Program •
Investment for 1 ha will make up 1.4 - 2 mln USD;
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Profitability in terms of return makes up 50-60% in case of 100% funding from own equity;
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In case of a 6 ha greenhouse, payback period will be 4,5 years;
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Unlike the main competitor countries importing vegetable to the CIS countries (Turkey, China, Morocco, Iran, Israel, etc.),, import from the RA into the CIS countries is exempt from 15% customs duty;
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0 tariff is applied for the VAT in case of export of goods from Armenia.
Investment financing Program may be financed both by RA resident /non-resident financial institutions and through joint financing by the latters. As for the program implementation mplementation, payback may be guaranteed by the land area and real estate of the greenhouse, as well as pledged future cash flows, flows, emission of the shares of the financier and other possible financial mechanisms. The following funding conditions are considered for feasible and effective implementation of the program: •
Investment co-financing financing at the amount equal to 20-25% 25% of the total program price; price
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Interest rate of the involved borrowings - ≤ 7.5% including insurance and other costs;
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Financing period - at least 5 years;
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Grace period for payback- at least 1-2 years.
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Երևանի ջերմատնային գոտու ծրագրի ներդրումների կատարման աջակցման մեխանիզմները
Brief summary of investment investment program
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