Question: What are the financing opportunities for investment projects?

product "Stabilization", provided by banks using the resources of OJSC "Development Bank of the Republic of Belarus" (hereinafter - the Development Bank) within the framework of Decree of the President of the Republic of Belarus of March 14, 2022 No. 93.

Procedure for allocation of funds:

1. The Development Bank provides financial resources to partner banks by placing a deposit or purchasing bonds.

2. Organisations apply to partner banks, which select borrowers according to criteria agreed with the Development Bank.

3. Partner banks assess the financial condition of selected potential borrowers and the projects intended for implementation, after which they make a financing decision.

4. Lending is carried out on the following terms:

financing in Belarusian rubles;

interest rate – 7.5% per annum;

maximum financing amount per client – 5.0 million rubles;

own share in the project – determined by the bank.

For reference. The loan is provided only to small and medium-sized enterprises (hereinafter – SMEs) provided that at least 50% of revenue is generated from the sale of import-substituting products.

1.3. Credit product "Import Substitution Support", provided by banks and leasing companies within the framework of the Financial Support Programme for Small and Medium-sized Enterprises of OJSC "Development Bank of the Republic of Belarus".

Procedure for allocation of funds:

1. The Development Bank provides financial resources to partner banks and leasing companies by placing a deposit or purchasing bonds.

2. Organisations apply to partner banks and leasing companies, which select direct borrowers according to criteria agreed with the Development Bank.

3. Partner banks and leasing companies assess the financial condition of selected potential borrowers and the projects intended for implementation, after which they make a financing decision.

4. Financing through partner banks is carried out on the following terms:

interest rate – the refinancing rate of the National Bank of the Republic of Belarus, increased by 2 percentage points (14% per annum);

maximum financing amount per client – 5.0 million rubles;

own share in the project – determined by the bank.

5. Financing through leasing companies is carried out on the following terms:

interest rate – determined by the leasing company;

maximum financing amount per client – 2.5 million rubles;

share of own participation in the project – determined by the leasing company.

For reference. Loans (financing under lease agreements) are provided to SMEs provided that they receive at least 70% of their revenue from the sale of import-substituting products.

1.4. Sectoral credit products of the Development Bank.

II. Modernisation of existing production facilities

Sources of financing – own funds of organisations, attracted and borrowed funds.

Financing instruments:

1. Own funds – share capital, cash flow generated during the enterprise's operations (net profit and depreciation charges), internal reserves (funds from the sale of decommissioned equipment, disposal of unused assets, etc.), additional share issuance.

2. Attracted funds:

- funds of the republican centralised innovation fund and local innovation funds in accordance with the requirements of Decree of the President of the Republic of Belarus No. 357 of 07.08.2012 "On the procedure for the formation and use of innovation fund resources".

- funds of the Belarusian Innovation Fund, allocated in accordance with Decree of the President of the Republic of Belarus No. 174 of 25.03.2008 at 0.5 of the refinancing rate of the National Bank.

- funds of extra-budgetary centralised investment funds, allocated for purposes and in the manner determined by the Resolution of the Council of Ministers of the Republic of Belarus No. 9 of 05.01.2013.

3. Borrowed funds – bank loans and borrowings, commercial loans (provided by suppliers of machinery and equipment, as well as contractors).

Investment incentive measures (including additional measures being developed within the framework of the Set of Measures for Launching the Investment Cycle and the Concept of State Policy for Regional Development of the Republic of Belarus):

1. For all types of territories:

conclusion of investment agreements with an expanded package of benefits for large projects – based on a Government decision;

implementation of medium and small projects with the provision of a basic package of benefits stipulated by the current Decree No. 10 – based on an executive committee decision;

introduction of a special

investment agreements, providing for incentive measures for product sales (mandatory purchases).

2. In industrial centres:

apply the mechanism of an investment deduction(increased from 2022).

For reference: For buildings, structures and their reconstruction – 20% of the initial cost (cost of investment in reconstruction). For machinery, equipment and vehicles (except for passenger cars) – 40% of the initial cost (cost of investment in their reconstruction).

3. In agro-industrial and agricultural regions:

a compensation package of measures for investors carrying out the construction of infrastructure facilities at their own expense (reduction of tariffs for electricity and heat supply, utility services, and others);

grant "tax holidays" for newly established enterprises during the first 7 years.

For reference. For example:

exemption from profit tax and property taxes (on real estate and land tax, rent for land plots owned by the state);

non-accrual of mandatory insurance contributions to the Social Protection Fund of the Ministry of Labour and Social Protection on the part of the income (payments) of employees of newly established enterprises exceeding one-time average wage of employees in the republic for the month preceding the month for which they are to be paid;

provision of state financial support to small and medium-sized businesses to reimburse expenses when concluding a lease agreement, as well as subsidies to reimburse economic entities for part of the expenses related to product certification.