Representatives of the Federal Agency for Fishery (Rosrybolovstvo), the Ministry for the Development of the Russian Far East, the Ministry of Industry and Trade, the banking sector, participants of the presidential program “extra fishing quotas in exchange for investments in newbuilds”, representatives of associations and industry experts assessed the results of the first stage of the application of the new instrument of state support, expressed opinions and suggestions on the continuation of the program, the Federal Agency for Fishery said.
The purpose of the meeting is to compare positions on key issues in the development of Russia’s fishery sector and prepare for constructive dialogue at the key sectoral session of EEF2021.
In his opening remarks Gadzhimagomed Huseynov, First Deputy Minister for the Development of the Far East and the Arctic said that the industry was able in five years to increase the volume of investments fivefold. “In my opinion, this is one of the most interesting topics on the EEF2021 agenda. The fishing industry in the Far East is one of the main ones, where a significant amount of investment is attracted, where a large number of the population is employed,” the official said.
Khasan Likhov, Deputy Head of the Federal Agency for Fishery highlighted the importance of the investment quotas mechanism which initiated and gave a significant impetus to attracting investments in the fishing industry. In 2020, the volume of investments surged by 51.3% and reached RUB 68.1 billion. “The mechanism of ‘investment quotas’ should ensure sustainable development of fisheries, increase the economic efficiency of the sector. We see that the environmental agenda is coming to the fore in the international arena. Ecology is becoming an instrument for regulating the economy, including in terms of requirements for newbuilds. If we do not comply with new trends, we will lose our competitive advantages and will not be able to secure the leading positions of the Russian fish industry,” Khasan Likhov was quoted as saying.
The Deputy Head of the Federal Agency for Fishery presented interim results of the first investment cycle in the industry. To date, 17% of the 20% of the TAC allocated for ‘investment quotas’ have been allocated, the remaining 3% is to be distributed in 2021-2022.
Rosrybolovstvo conducted 9 application campaigns and considered 121 projects with 91 approved projects and 79 signed contracts. The remaining 12 projects are at the selection stage, and there are also investors’ refusals to sign the contract.
The volume of investments under the signed contracts is estimated at RUB 213 billion, of which almost 88% – in the fleet renewal (25 vessels for the Northern Basin and 30 vessels for the Far East). The newly built boats joining the fishing fleet will make it possible to renew production capacities in the North-West by 80% and 40% in the Far East.
Construction is underway at 9 shipyards with only five newbuilds having been delivered to fishing companies by July 2021. The last vessel in the first investment cycle is scheduled for completion in 2025.
In the area of onshore processing, the first stage program is progressing more intensively, but it does not end there. Three more projects for the construction of low-capacity plants in the Far East are currently being selected. Of the 24 plants under construction, 20 have already been commissioned: 10 enterprises in the Far East and 10 in the North. The remaining four are nearing completion: one is already ready for acceptance, the three remaining factories are scheduled for completion in 2022.
In addition, in 2019 – 2021, Rosrybolovstvo 50% of the TAC for crab quotas through auctions with investment obligations: 1 lot – 1 crab ship. In total, 41 lots were allocated, respectively, each one involves the construction of a crab catcher, of which 15 vessels will be built at the Far East-based shipyards.
The total investment in construction will amount to about RUB 60 billion. As a result of the auction, about RUB 145 billion were transferred to the state budget.
The deputy head of Rosrybolovstvo drew attention to the fact that the cash proceeds from the sale of crab quotas made it possible to start the construction of a research vessels fleet necessary for the development of domestic fisheries, including outside Russian waters.
“This year we are laying keels for a pair of RVs. We plan to build modern vessels for an unlimited navigation area, including for the Arctic zone. This became possible thanks to crab quotas auctions,” said Khasan Likhov.
Roundtable participants discussed a wide range of issues. First of all, what turned out to be the most serious challenge for fishing companies when working with the investment quotas mechanism: a complex regulatory framework, an auction procedure, obtaining bank guarantees and debt financing, the conclusion and execution of shipbuilding contracts, the cost and conditions of construction of fish processing vessels/equipment supplies.
The proposals that were developed on the round table discussion results will become the basis for further discussion at the EEF, which will take place on September 2-4 in Vladivostok.
