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Economic development of the Republic of Karelia in 2007

  Economic Policy

  Industrial Policy

    Industrial Policy

    Timber Industry

    Subsurface Use


    Agroindustrial Complex


  Natural Resources
  and Ecology


   Results of 2007


High position in manufacturing activity belongs to such kinds of activity as production of machines and equipment, ready metal articles, vehicles and equipment, electric equipment, electronic and optical equipment rendered by largest enterprises, such as Petrozavodskmash Corp., Onego Tractor Plant, Ltd., Onego Shipyard, Ltd., AEK, Ltd.

On the part of the Government of the Republic of Karelia the abovementioned enterprises were rendered practical assistance in modernization of production, introduction of modern technologies, competitive production output.

So, assistance rendered in formation and realization of a package of orders to produce paper-making and chemical equipment by Petrozavodskmash Corp., promoted growth of production outpot and further production modernization in 2007, including, introduction of modern melting complex in the Foundry. Due to means of the republican budgetary credit of Petrozavodskmash Corp., in 2007 have been taking measures on switching boilers into natural gas and automation of boiler equipment.

As a result of financial difficulties, in July, 2007 in Onego Tractor Plant, Inc., procedure of competitive production has been introduced and in September industrial activity of the enterprise has been stopped. Newly created enterprise Onego Tractor Plant, Ltd., was included in Tractor Factories concern and most of workers were hired back at the new enterprise. With a view of rendering assistance to released workers in their search for job Petrozavodsk city employment Center and Onego Tractor Plant, Inc., have signed a program of actions on assistance to employment. Dynamics of industrial parameters of tractor builders is positive. In 2007 it has been made 331 tractors and machines that makes 162.3% to the level of 2006. In 2008 the enterprise plans to make 360 units of equipment, to involve 73,9 million rbl. of investments into the fixed capital. Government of the Republic of Karelia will continue working with management of the concern on modernization of tractor production.

In 2007 positive dynamics of growth of production volumes of electric equipment and electronic production was kept.

Having completed construction project of 10 dry-cargo ships of Karelia type within the Modernization of Russian Fleet program, Onego Shipyard, Ltd., has concluded contracts and started construction of sea vesseld of the new project for a foreign shipowner.

Situation remained complex and astable on Avangard Shipyard, Inc., - the enterprise has reduced volumes of production of the goods and services, both as a whole, and on core buisness. Cooperation of the Government of the Republic of Karelia and the enterprise has allowed to develop the program of financial improvement of the factory in the shortest terms. Support in formation of a package of orders for 2008 and the next years will be rendered to the enterprise.

Work of the Government of the Republic of Karelia in the sphere of energy complex it is directed on maintenance of power balance of the region where priorities are: creation of new and modernization of generating capacities, creation of mini power facilities, introduction of energy saving technologies in production, transport and at consumption of power resources.

As a result of production increasing by Karelsky electric energy branch of TGK, Inc., the share of current consumption of own development has grown from 49% in 2006 up to 55.9% in 2007.

Deficiency of capacity of the Karelian power supply system becomes covered due to overflows from the next power supply systems, mainly from the Kola atomic power station.

With a view of increasing reliability of electrosupply of consumers of the republic actions on power engineering development for the period through to 2012 are realized.

In 2007 construction of the second Northern transit - a high-voltage 330 kilovolt line from the Kola atomic power station to Onda hydroelectric power station in Karelia proceeded. Total amount of investments into construction of all sites of the line will make more than 14 billion roubles. All construction works of the second circuit of Northern transit are planned to be finished in 2010. Cntinuation of construction of this line from Onda hydroelectric power station up to Kirishy state district power station, included in the Leningrad power supply system is considered in the long term. Realization of this project will allow to increase the overflow of capacity from the Kola atomic power station, to increase reliability of electrosupply of consumers of the Republic of Karelia considerably. Financing of construction is carried out due to means of Federal Network Company, Inc., and means of the federal budget.

For development of generating capacities directed on increase of generation of electric power in territory of the republic, expansion of Petrozavodsk thermal power station due to construction of power unit of 280 megawatt combined-cycle plant is planned, that will increase the established capacity of Petrozavodsk thermal power station by 200 megawatt. With a view of the project realization Government of the Republic of Karelia, Administration of Petrozavodsk and TGK, Inc., have signed the Agreement according to which the given project is to be carried out due to the investment program of TGK, Inc. Terms of the project realization is stipulated for 2012.

In 2007 the Scheme of perspective development of 35-110 kilovolt electric networks by Karelenergo, Inc., for the period till 2012 is developed and approved when due hereunder. The Scheme defines the scope construction works, expansion and reconstruction of electric networks of Karelenergo, Inc. Volume of capital investments according to the approved Scheme will make 9,5 billion roubles.

Priority projects for the nearest period in development of energy generating capacities of the republic are the following:

  • construction of Segozero hydroelectric power station with a capacity of 24 megawatt and generation of 76 million kilowatt-hour of electric power a year (there is a new feasibility report and business-plan);
  • completing reconstruction of Kondopoga hydroelectric power station with a capacity of 31,8 megawatt (capacity increase by 5,8 megawatt);
  • reconstruction of Hemäkoski hydroelectric power station with capacity increase up to 16 megawatt (Pitkäranta region);
  • construction of the 1st phase of diesel power station with a capacity of 1,5 megawatt on the island of Valaam for solution of prime problems of power supply of inhabitants of the island;
  • construction of mini-power stations with suction gas engines with a capacity from 500 up to 1000 kilowatt, working on wood fuel chips and sawing waste, for electrosupply of remote settlements (Reboly, Valdai, etc.), possessing independent diesel power stations.

Constructuion of power transmission lines is planned:

  • 110 kilowatt Karelia-Päozero power transmission line for provision of reserve electrosupply of consumers of Kalevala and Louhi regions;
  • 35 kilowatt power transmission line and 35/6 kilowatt switching substation for provision of the southern part of the town of Sortavala with electric power;
  • reconstruction of existing switching substations distribution substation-24 (220/110/35/6 kilowatt) in Suojarvi and switching substation-56 (110/10 kilowatt) in the settlement of Päozero;
  • construction and reconstruction of high-voltage line-10-0,4 kilowatt and transformer substations within the Countryside Social Development federal target program.

Continuation of realization of programs on introduction of boiler-houses working on local kinds of fuel is provided, that will allow to reduce volumes of purchase of expensive imported fuel and to reduce thermal energy generation expenses.

Major tasks, Government of the Republic of Karelia is facing in the sphere of industrial policy for 2008 are:

  • assistance to introduction of high-end technologies and increase of the level of competitiveness and innovative potential of operating sectors of economy;
  • attraction of investments into creation of new enterprises and workplaces;
  • modernisation of enterprises for production of competitive production, decrease in power consumption and consumption of materials of productions, increase of labour productivity;
  • increase of efficiency of using natural resources;
  • expansion of output of processing enterprises focused, first of all, on processing of timber and manufacture of wooden products, pulp-and-paper production, metallurgy and production of ready metal articles.
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Created: March 24, 2008. Last updated: April 21, 2008.
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