The Ministry of Finance proposed to postpone the construction of 25 Rostec garbage plants

The Ministry of Finance proposed to postpone the decision to finance the Rostec project for the construction of 25 more waste incineration plants until the first five are fully operational - in the Moscow region and Kazan. The cost of the new project is ₽1.3 trillion

The Ministry of Finance proposed to postpone the decision on state support for 25 new plants of Rostec's subsidiary, RT-Invest, for incineration of municipal solid waste (MSW) until the completion of construction and reaching the design capacity of the first five similar projects of the company in the Moscow region and Tatarstan. RT-Invest expects to launch them by the end of 2023.

The department's proposals are contained in a letter from Deputy Finance Minister Irina Okladnikova, which she sent on April 12 to Deputy Prime Minister Victoria Abramchenko (in charge of ecology). RBC has a copy of the letter; a federal official confirmed its authenticity.

The press service of the Ministry of Finance confirmed that together with the Ministry of Economic Development they analyzed the financial model of the new RT-Invest project and sent their position to the government. Abramchenko's spokesman Marta Galicheva said that the materials had been received from the departments, but refused to comment on their content: the letter would be studied at the government's site.

RT-Invest currently does not have information about the process of discussing the project, ”the press service of the company told RBC, refraining from other comments.

What measures of support did the "daughter" of "Rostec" ask for?

Since 2018, RT-Invest has been building five waste incineration plants with a total capacity of 3.35 million tons of waste per year for 180 billion rubles: four in the Moscow region and one in Kazan. In May 2020, the company agreed to build another 25 similar plants with VEB (financial partner) and Rosatom (technology partner) throughout Russia. Their capacity should be 14.6 million tons per year. In February 2021, it was reported that the cost of this project would be 1.3 trillion rubles, the planned revenue for 35 years was 3.3 trillion rubles, and the yield was 9.5%.

For the implementation of the new project, the subsidiary of Rostec asked for 320 billion rubles. subsidies from the federal and regional budgets during the construction of plants, as well as to finance the work of new enterprises for 100 billion rubles. due to agreements on the provision of capacity (CDA; provides for accounting in the price of electricity for investments in the creation of generating capacities) and almost 840 billion rubles. by means of eco-collection, which must be paid by producers of goods and packaging for disposal under extended producer responsibility (EPR).

The CDA mechanism is already being used for the construction of the first five plants of RT-Invest. But its use for 25 new plants was opposed by large consumers of electricity, as well as the Ministry of Energy and the Ministry of Economic Development. The head of the Ministry of Energy Nikolai Shulginov warned that this could lead to a doubling of the electricity tariff for some consumers. Representatives of business and specialized departments also opposed the use of EPR funds.

On February 19, the RT-Invest project was considered at a meeting in the government under the leadership of Abramchenko and Deputy Prime Minister Alexander Novak, who instructed to work it out without the use of PDA and eco-collection funds. The Ministry of Finance and the Ministry of Economic Development were supposed to analyze the financial model of the project and submit a position to the government by April 12.

Then Abramchenko called the plants of "Rostec" "platinum", and the Ministry of Finance assessed the requested measures of state support as "unprecedented."

Why the Ministry of Finance asks to postpone the construction of 25 factories

The letter from the Ministry of Finance explains why it makes sense to first complete the construction of the first five factories in the Moscow region and Kazan, and then start a new project.

The financial model for the construction of 25 plants without the use of CDA and eco-collection funds, presented by RT-Invest, is unprofitable, according to a letter from Irina Okladnikova. The internal rate of return for this project is minus 3.9%. This indicator of RBC was confirmed by the press service of the Ministry of Finance.

According to the Deputy Minister, in the presented options for financing the factories, there is “no justification” for the need to build these factories “as such”. At the meeting on February 19, Victoria Abramchenko also asked about the need to build such a number of factories. "Why do we need expensive electricity and gold waste?" She asked.

• The options for financing factories using CSAs did not take into account the lost budget revenues caused by an increase in the tariff for electricity consumed by companies, which will lead to a decrease in their tax base. “The application of CDA requires additional calculations and justifications,” a representative of the Ministry of Finance told RBC.
• The use of ecological collection funds, which is provided for in most of the financing options developed by RT-Invest, contradicts the reform of the EPR concept, which Abramchenko approved at the end of 2020. “The financial model provides for the direction of EPR funds to ensure the necessary gross proceeds of projects. [But] the approved concept of EPR provides for the direction of the ecological collection funds to create economic conditions to ensure the extraction of secondary material resources and their return to economic circulation, ”says a representative of the Ministry of Finance.
• The proposed financial models offer 100% refund of taxes from factories until the end of the project - for 32 years. The current support mechanisms, including the law on the protection and promotion of investments (SZPK), adopted in 2020, do not provide for such tax compensations, emphasizes in the letter Okladnikova.

At the end of March, RT-Invest CEO Andrey Shipelov confirmed to RBC that the company had sent new financial models of the project to the government. "In these models, we counted everything: [funding] with and without PDA." “There are no miracles. <...> If I am not provided with any support [in financing] capital expenditures, then it is necessary either to pledge more proceeds from the tariff, or to issue "green" bonds, "he said.

How RT-Invest substantiated the need for the project

A representative of RT-Invest previously told RBC that an increase in the number of waste incineration plants from five to 30 would help achieve the environmental goals of the state and reduce landfill disposal by 36 million tons of waste per year. According to him, this is about 50% of the volume of waste generated. in Russia.

Abramchenko admitted that by 2030, according to the decree of President Vladimir Putin, it is necessary to achieve sorting of all municipal solid waste (MSW), and the volume of garbage sent to landfills should be halved. “World practice suggests that one must be objective, that the“ tails ”are sent either to the sky or to the earth. That is, they are either burned or buried. But here I will say right away that our vision is to create a cyclical system, ”she said after the February 19 meeting.

30 factories will help close more than 200 old landfills, prevent the creation of 86 new ones and save about 46 thousand hectares of land, argued the representative of RT-Invest. The problem of landfills and landfills is very acute, 25 new incinerators are the right direction for the development of waste reform, said Maxim Khudalov, an independent expert on sustainable development. According to him, questions about their cost may be reasonable, since the calculations could be based on data from five pilot plants that use imported equipment and the design of which required large expenses. Reducing the cost of factories, and hence the tariffs for waste disposal and the price of waste electricity can be reduced, he concluded.

Source: https://www.rbc.ru