Investment Agency is ready to support entrepreneurs who want to start their own business in South Ossetia

Mon, 27/10/2014 - 10:46

Minister of Economic Development of South Ossetia William Dzagoev told reporters on the purpose of the Investment Agency to attract investments to the Republic. Its creation was the result of the joint work of Russian and South Ossetian counterparts to promote the economic development of the Republic.

According to William Dzagoev, it was established to support entrepreneurs who want to start or grow their business in South Ossetia with preference to business projects in the production and processing of agricultural products and industry. Dzagoev has noted that Ministry of Economy has start to consider the first business projects of the entrepreneurs interested in participating in this program, which starts in 2015.
"Ministry of Economic Development and the Investment Agency signed regulations on interaction. Participation scheme is as follows: the potential entrepreneur presents a business plan, which must undergo the appropriate examination and receive a positive decision that the project has an economic rationale and is viable. After that at least 10% of the cost of the project should be paid in by potential borrowers, 45% - by the Investment Agency on an interest-free basis. These two entities establish a joint venture, which the remaining 45% of the necessary funds will receive in the form of a bank loan at 10% per annum. Credit is given for 8 - 10 years, "- said the Minister.
In the future this company will work to repay the loan, and after some time, when the loan is paid off, it becomes an economic entity, further relations with the Investment agency will be regulated on a contractual basis.
Economy Minister has noted that the scheme is viable and can be implemented.
"There are already a few entrepreneurs who are interested in this program, they presented their projects in the field of processing agricultural products, dairy products. Currently, they are studying in Moscow, and I hope that next year we will see the first steps to become a good example for other entrepreneurs. They will see that this program can work ", - said Dzagoev.
He has stressed that Ministry of Economy is ready to provide assistance in preparation of business projects.
Dzagoev has suggested that many entrepreneurs at first with suspicion can take this, but in the future they will become more interested.
In an interview with reporters William Dzagoev has also said that the agency is working closely with the unions of entrepreneurs registered in the Republic.
"We cooperate and possibly contribute to the solution of their problems. Therefore, one cannot say that the government has moved away from the problems of entrepreneurs. For example, in 2008, when most of the entrepreneurs had lost their business, the government adopted a decree on granting soft loans for rehabilitation and further development. In 2010, 63 businesses were given loans at 3% per annum. I believe that this is a considerable help, while the bank rate is 18%. Only two of the 63 entrepreneurs were able to return loans.
However, the minister has assured that with the establishment of the Investment Agency, the issue of attracting foreign investments into the Republic will not be removed from the agenda. According to Dzagoev, Ministry of Economic Development together with the government is taking steps to attract investors in South Ossetia, and not only the Russian ones.
"Due to some political instability, businessmen from countries that do not recognize us, are cautiously watching the economic situation in South Ossetia. Despite this, we have contacts with many. Recently we were visited by businessmen from South Korea; it was already their second visit. The first study visit they made last year, for the second time they have come with real proposals and projects, which, according to them, we can put into practice, "- said Economic Minister.
He has stressed that when considering any projects in production, it is important that it does not pollute the environment.
"We work with Russian investors, which, in particular, are interested in the production of basalt; it is quite an expensive project. It should be noted that it is environmentally friendly production. It can also be created 450 jobs. At the moment negotiations are ongoing in this direction, "- said the Minister.
He has also noted some interest of entrepreneurs, immigrants from South Ossetia. For example, currently is under consideration the project for construction of the meat processing plant in the Republic. Proposal was received from the head of a major Russian agricultural holding "Evrodon" Vadim Vaneev.

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