1. THE MURMANSK REGION INVESTMENT STRATEGY UP TO YEAR 2020 AND FOR THE PERIOD UP TO YEAR 2025

2. Ground for elaboration of Investment Strategy Shaping system of long-term objectives for investment activity as well as the most efficient ways of their achievement Amplification of principal provisions of the Murmansk Region Social and Economic Development Strategy up to year 2020 and for the period up to year 2025 Implementation of May’s Decrees of the President of the Russian Federation Implementation of the National Arctic policy of the Russian Federation, including The Strategy of Development of the Arctic Zone of the Russian Federation and National Security Protection for the period up to year 2020 Amplification of principal provisions of the North-West Federal District Social and Economic Development Strategy for the period up to year 2020 Implementation of the Standard of activities of the executive authorities of the subject of the Russian Federation on the provision of congenial investment climate in the region 2

3. Fixed capital investments behavior 3 Note: evaluated data used for the period of 2013.

4. Branch analysis of the Murmansk region development Aquaculture, fisheries and fish processing Priority economic activities Mining industry Tourism 4 Organizations’ fixed capital investments structure behavior (exclusive of small business entities) by economic activities (in percents vs total)

5. Murmansk region positions in the international and Russian ratings and in investment climate reports The 4th place in the North-West Federal District according to the 2012-2013 Russian regions investment-grade rating In the Russian regions investment attractiveness rating the region was referred to IC5 group (average investment attractiveness - second level) The 11th place among 39 Russian regions in the rating for the index of conditions for small and medium business development The 43rd place among 83 Russian regions in the rating of regions for development of private-public partnership (PPP) The city of Murmansk held the 26th place In the World Bank’s Doing business international rating 5

6. SWOT analysis of Murmansk region investment attractiveness 6

7. Scenarios of implementation of various strands of investment policy in Murmansk region (TOWS analysis) 7

8. Objectives and indicators of Investment Strategy Target description201620202025 Gross regional output per capita (th. rubles)4939822018 Murmansk region position in the Russian regions investment attractiveness rating by the National rating agency IC4 group (average investment attractiveness – first level) IC3 group (high investment attractiveness – third level) IC2 group (high investment attractiveness – second level) Murmansk region position in the Russian regions investment rating by the Expert RA (rating agency) «3B1 – reduced potential – moderate risk» group «3В1 – reduced potential – moderate risk» group «2А – average potential – minimum risk» group (top ten positions) Murmansk city position in regard of business environment in the Doing business international rating by the World Bank among first 15 citiesamong first 12 citiesamong first 10 cities Fixed capital investments volume (exclusive of budgetary funds, bn rubles) 98.4201.3469.5 8

9. Objective 1. Creation of institutional conditions for consistent growth and development (comprised of 24 tasks) Achieved by measures implementation towards: improvement of investment process management system; improvement of the regional investment legislation; developing regional programs and projects, and making changes in the existing programs; increasing the information transparency of the investment process; Improvement of cooperation among state, regional and municipal government’s mechanisms; reducing the administrative barriers; supporting small, medium and innovative enterprise. Target description201620202025 Implementation efficiency assessment of the introduced components of the investment Standard of activities of the Murmansk region executive bodies on the provision of congenial investment climate in the region on the part of the community of entrepreneurs (points) 788 Implementation efficiency assessment of the program for support of small and medium business in Murmansk region on the part of the community of entrepreneurs (points) 788 Turnover of the products and services produced by the small enterprises, inclusive of micro-enterprises and private entrepreneurs (% against total) 1241602.1 fold Number of small and medium business entities operating at the territory of Murmansk region (% against basic)112.4130150 Volume of direct foreign investments (% against basic)120130150 The ration between the national debt volume of Murmansk region and the total annual regional budget income volume (exclusive of the uncompensated receipts volume, % against basic) 807069 PPP development level (%)557788 9 Objectives and indicators of Investment Strategy

10. Objective 2. Infrastructure’s development (comprised of 16 tasks) Achieved by measures implementation towards: transport infrastructure power infrastructure; information and telecommunications infrastructure; social infrastructure; communal infrastructure. Target description201620202025 Index of the fixed funds replacement (%)6.56.514.316.4 Deadline for the consumers connection (up to 150 kW) starting with receipt of an application for utility connection and up to the date of signing a certificate on utility connection (days) 4540 Maximum number of procedures necessary for getting a building permit for a standard capital construction object for administrative and social use 1311 Maximum term of accomplishment of all of the procedures necessary for getting a building permit for a standard capital construction object for administrative and social use (days) 90565656 Maximum number of stages (procedures) necessary for utility connection to the electric-power infrastructure facilities 655 Objectives and indicators of Investment Strategy 10

11. Objective 3. Ensuring the human resources investment activity (comprised of 19 tasks) Achieved by measures implementation towards: implementationion of forecast & planning for regional labor market development; ensuring a balance in the regional labor market; human investment, retraining and enhancement of competencies of the economically active population 11 Target description201620202025 Proportion of students in the state (municipal) general educational institutions which have an opportunity to study according to the principal up-to-date requirements, against total number of students (percents) 889697 Proportion of full-time graduates of the professional educational institutions, which were employed within one year after finishing education in the obtained specialty (profession), against total number (percents) 51.155.956.4 Proportion of high-qualified employees against total number of qualified employees in the region (percents)30.633.336.6 Objectives and indicators of Investment Strategy

12. Objective 4. Providing innovation-based development of economy and social sphere of Murmansk region (comprised of 7 tasks) Achieved by measures implementation towards: creating and developing mechanisms of complex support of innovative activities at all stages of the innovation process; development of the innovative infrastructure, including the support infrastructure for small and medium enterprise; coordinating the regional cluster initiatives. 12 Target description201620202025 Proportion of organizations introducing technological innovations against total number of assessed organizations (percents) 11,513,714,5 A share of output from high-technology and science-intensive industries against gross region output (percents) 13.516,018,1 Objectives and indicators of Investment Strategy

13. Objective 5. Technical reequipment and modernization of priority sectors and development of newly created activities (comprised of 17 tasks) Achieved by measures implementation towards: mining complex fishing complex agro-industrial complex commercial exploitation of hydrocarbon potential of arctic continental shelf tourism and recreation Target description201620202025 Index of production associated with “Mining operations” activity (% against basic)111.51504 fold Index of production associated with “Metallurgical production and finished metal products manufacture” activity (% against total) 106.3130190 Index of production associated with “Production of transport means and equipment” activity (% against basic) 135.62 fold4.3 fold A share of newly created activities in the production structure (% against basic)--34.7 Volume of artificial fish breeding by fish-farming enterprises (th. tons)38.483.998.9 Growth rate of home and inbound tourist flow in Murmansk region (% against total)-156.42 fold Growth rate of volume of the fee-based tourism-associated services rendered to the citizens in Murmansk region (% against basic) 108.0122.8145.2 13 Objectives and indicators of Investment Strategy

14. Formation of clusters and allocation of industrial growth centers

15. Financial mechanisms for the implementation of the Investment Strategy government programs of the Russian Federation and Murmansk region private investments foreign investments Total financial costs on the implementation of the Strategy (including activities and investment projects) are 449 billions rubles, including costs from federal, regional and municipal budgets as well as extra-budgetary funds Financing sources: 15

16. Expected results of implementation of the Investment Strategy Murmansk region would play a leading role in realization of the national interests of the Russian Federation in the Arctic region Murmansk would strengthen positions of head scientific, skilled, cultural, business and financial center of the Arctic, as well as leading core of maritime activities service providing in the Arctic Zone of the Russian Federation The city of Murmansk would take place in first among first 10 cities of Russia in regard of business environment in the international and Russian ratings 16

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