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Yakutia: Awaiting investment breakthrough

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© AP Photo/Mikhail Metzel

The regional authorities say the investment potential is huge

YAKUTSK, June 8. /TASS/. Tomatoes on the permafrost, Arctic wind energy generators and modern incineration plants are the reality in Yakutia due to Japanese investments and technologies. Companies from the Asia-Pacific Region’s other countries plan bigger infrastructure projects in the region, including construction of a bridge across the Lena River.
The regional authorities say the investment potential is huge, it is about dozens millions of dollars - Asian companies see in Yakutia a promising market for investing in the energy, natural resources’ extraction and in construction of infrastructure projects.
The interest is fixed at the level of a few memorandums and talks. TASS writes about what the region has achieved with support from Asian investors and what the local authorities and people expect from APR investments.

Tests for equipment

Japan’s companies are not seeking commercial profits - they say that they are implementing technologies there to test own equipment in the Arctic conditions. They are absolutely correct in thinking the equipment, which passes the severe tests, is ready for use in other regions and countries. New Energy and Industrial Technology Development Organization (NEDO) is working on a wind farm in northern Yakutia’s Tiksi.
"In Tiksi, in storms the winds may be 60 mps, thus the equipment would be tested in most extreme conditions," the region’s Minister of Utilities and Energy Danil Savvinov said. Within a year, specialists will analyze how the equipment works and will see its economic effectiveness, he added.
The first wind generator (of 250 KW), which Yakutia received from Germany, was installed in a northern district back in 2007 - but it did not pass the test of severe Arctic winds. "Clearly, equipment for Arctic energy plants should be adjusted to the climate conditions there," the minister said.

Arctic greenhouse

Local fresh cucumbers and tomatoes are on sale in Yakutsk for the second year. Not far from the city, in the Kangalassy advance-development territory, Japan’s Hokkaido Corporation invested in a greenhouse’s construction and equipment.
The project, which uses technologies designed for Hokkaido, a region with cold climate, began in spring, 2016. In December, first vegetables were test planted there at 1,000 square meters. Further on, the greenhouse will take an area of 3.2 hectares.
"It is for the first time ever, that on the permafrost and in extremely low temperatures cucumbers and tomatoes grow, using the Japanese technologies," Kangalassy’s representative Dmitry Borisov said. "It is the first experience of growing vegetables in a region with frosts of minus 50 degrees."
The Japanese corporation has big plans. In May, it supplied an incineration worth about $100,000 - its capacity is about 500 tonnes a year. The corporation’s CEO Yukio Temma said the equipment was given to Yakutia for free.
"We value the experience of working with partners," he said. "In Yakutsk, we want to show effectiveness of our equipment and want to establish cooperation with other regions."
"Yakutia’s investment climate is good," he continued. "Our cooperation continues."

Investments in the Arctic energy sector

Japan is interested in investing in the Arctic region’s energy sector, which is based on local sources of small generation. For more than 140 power plants, Yakutia has to bring in every year about 70.000 tonnes of expensive diesel worth about 8 billion rubles ($128 million). "It is a huge market, and this is why it is interesting for the Japanese," the regional Deputy Minister of Energy Nikolai Durayev said.
Japan’s Komaihaltec and Mitsui&Co have been negotiating investments in renovation of diesel power plants in the region’s northern districts.
"They may be interested in these projects due to the big market here, and it is attractive for them, first of all, to keep busy their industrial facilities," the deputy minister said. The money may be allocated by the Japan Bank for International Cooperation (JBIC) - it finances major infrastructure projects abroad, including in Russia.
"Yakutia’s northern energy district needs renovation, as most of 144 power plants in those 13 northern and Arctic districts require modernization," the deputy minister added.
Hokkaido Corporation’s CEO Yukio Temma said the Japanese state-run corporation is interested in a project on LNG and its deliveries to the Arctic. "Japan produces natural gas, and we have technologies to deliver liquefied gas to far-away destinations and then to restore it right next to settlements," he said.

Awaiting a breakthrough

Despite Japan’s big plans, Yakutia’s main expectations are related to Chinese investors, who as yet eye the contract, worth billions, on construction of a bridge across the Lena River. Power China has presented a financial model and project documents with two options for the project’s implementation - either as a private concession or on the GtoG basis (intergovernmental agreement).
Yakutia’s authorities also negotiate with Singapore’s Asian Oil & Gas Pte Ltd hydrocarbons production at an Arctic license area. The company’s investments may be 178.85 billion rubles ($2.8 billion), the region’s ministry of investment development said.
According to Daryana Maksimova of the North-Eastern Federal University, Yakutia is awaiting an investment breakthrough, and its big hopes are for Chinese investments.
"The Chinese businesses are giving promises, some agreements have been inked," she said. "Expectations are high, though it is not easy to say how much they will come true."

More:
http://tass.com/economy/1008786