How to find money for the financing of an industrial construction
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Sources of financing of the industrial construction in 2018

Types of facilities for the financing of an industrial construction

It must be said that the financing procedure of the construction of the industrial facility, agreed upon by all Parties, is a process entailed by some paper red tape, to which it is necessary to prepare mentally. In terms of terminology, the financing of an industrial construction, or sometimes, it is also called “project construction”, since money is invested in investment projects and based on the company’s business plan, is the investment of funds for the construction of a new facility or the reconstruction, modernization of the existing enterprise. Before we determine the options for the financing of a construction, let’s go with the types of the industrial facilities.

  • Greenfield—this is literally an “open field”; since 2000 in Russia, this term means the construction of a new industrial facility on a plot of land. It should be noted that the option of the Greenfield is proposed by the authorities in order to improve the economy of a specific region. This allows to attract large industrial investors and provide residents with work.
  • Brownfield—this is the implementation of construction on the territory of the existing industrial zone, which is empty or does not work effectively. First, the investor will need to prepare a plot for construction and only then start the construction of facilities.

Accordingly, the procedure of drawing up the documents for the financing procedure of a construction of an industrial enterprise will be carried out in different ways.

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Sources of financing of construction of the industrial facility

As the main sources for the financing of industrial construction, it is possible to mention an investor as a private person, as well as an industrial investment fund, state target programs and banks that provide lands.

As tools of the financing of an industrial construction, we can name the following:

  • Leasing (finance lease);
  • Investment fund;
  • Direct investments in the charter capital;
  • State guarantees;
  • Concession agreement;
  • Syndicated loans.

However, the options for the financing for an industrial construction should be considered after the business plan has been agreed and the necessary permits have been collected.

Features of the budgetary financing of an industrial construction

Certainly, the authorities are interested in the appearance of more industrial enterprises on the territory of their country. As support measures, the budgetary financing of an industrial construction is provided. This is done through the federal purpose-oriented programs, through which the state regulates investment activities. These goals are adjusted annually, and the amounts of appropriations allocated are taken into account in the state budget. Thus, the budgetary financing of a construction of the industrial facilities is carried out as capital investments, and money is provided from the federal budget and the budgets of the regions of the Russian Federation. At the same time, the law provides for the financing of an industrial construction in two ways:

  • on non-refundable terms, that is, by providing gratuitously money for construction for the state needs;
  • on a repayable basis, that is, by providing a budget loan.

In addition, the Government can give state guarantees if investment projects have the social importance.