Narva businesses are figuring out whether the new Just Transition measure is right for them.

2023-09-22 11:05:33

The seminar was held in front of a full hall. Photo: Tatyana Zavyalova

“Working on an application for financial support is not an exam, not a math test. You can come to our specialists with a fairly crude idea, with their help, refine it, and submit it in the form of a project to receive a subsidy…”

These words from one of the organizers of the information seminar for representatives of small and medium-sized businesses, held on Thursday, September 14, at the Vaba Lava center in Narva, will certainly give someone confidence. And it won’t hurt at all in such a matter: the opportunity to receive funds from the Just Transition Fund in today’s economic conditions is not only tempting for many Narva enterprises, but vitally necessary. In this case, we are talking, let’s define it right away, not about the everyday needs of the enterprise, but about supporting investment projects.

Four are already lucky
Let us recall that last summer a measure was opened to support large investments aimed at creating jobs in Ida-Viru County. The minimum benefit in this category is 500 thousand euros.

Since the fund’s support amounts to 25–45 percent of the cost of the entire project, and the remaining investment costs involve self-financing, it was already clear from the very beginning that only a few Narva enterprises would be able to apply for it. This is how things stand today: the fund has supported four enterprises in Ida-Viru County, two of them in Narva.

However, as Ivan Sergeev, coordinator of the Just Transition at the Ministry of Finance, notes, there is reason to believe that the measure for large investments “is beginning to loosen and gain momentum.”

First seminar: increased clarity
Two months ago, the joint institution of EAS and KredEx announced the acceptance of applications for the second support measure – for small and medium-sized enterprises. The minimum benefit amount under this measure is 30,000 euros, the maximum is 500,000 euros per project. The benefit share can be up to 45% of the total investment amount in the case of micro and small enterprises and 35% for medium-sized enterprises. All work planned under the project must be completed no later than August 31, 2026.

Quite expectedly, summer turned out to be only a modest prelude to this process. So far, EAS, according to Ivan Sergeev, has received 1 petition, and a couple more projects are on the way.

But with the onset of autumn, which was confirmed by information seminars held first in Jõhvi and then in Narva, local businesses began to show keen interest in the Just Transition investment benefits.

The organizers of the information seminar, EAS and IVEK, provided its participants with the opportunity to get answers to their questions, as they say, first-hand. The meeting in Narva was attended by Kaarel Lehtsalu, regional development adviser at the Ministry of Economic Affairs and Communications, Jaak Puistama, business consultant at the EAS benefit center, and Sten Silmet, an expert on EAS supply issues.

Efim Aleshkin: before a preliminary consultation at EAS, you can contact us at IVEK. Photo: Tatyana Zavyalova

A general overview of the topic was given by IVEK entrepreneurship consultant Efim Aleshkin and Just Transition coordinator at the Ministry of Finance Ivan Sergeev.

For some seminar participants, this is where the path to the benefit ended: here they were once again convinced that they did not meet the criteria for an applicant.

First of all, the company’s activities or its project must relate to certain industries based on the EMTAC classification. For example, the company that publishes the Narvskaya Gazeta will successfully pass this test, since it is included in one of the six required sections: “communication and information.”
The second level of selection is what the benefit will be used for. The editors could purchase machines or some other equipment, develop new products or protect their intellectual property, organize new processes that promise us additional profit… But, as they say, it became a small matter: the minimum allowance for small businesses is 30 thousand euros, 45 percent of the cost. We calculated: the editors should have added 66 thousand 660 euros to the benefit. No, not our case…

Half of the subsidy can be spent on project preparation
But Nevotex Narva OÜ, perhaps the only participant in the seminar with the status of “medium enterprise,” is more or less successful with self-financing.

The executive director of the plant, Yuri Sayya, answering a question from our publication, said that Nevotex would like to participate in the project competition. The company has been in need of a machine for some time, and now it could receive a subsidy to purchase it: the motivation is obvious. The company plans to apply for the minimum amount of benefits – 30 thousand euros.

However, there are a number of “buts”. The plant’s management believes that it will have to contact a consulting firm to prepare a package of documents and prepare reports.
– There is no special person for writing projects in small local enterprises, we are not a state or municipal structure. That is, there are no competencies, and most importantly, there is no time, since we are focused on our business,” explains the director.

How much could such a service cost? About 15 thousand euros, says Yuri Sayya, who already understands this topic. “In the case of low-budget projects, this kills its economic feasibility. We have already approached this type of competition several times and each time, having made calculations, we realized that the winnings are not worth the effort,” says the director.
If we talk about the practical side of the matter, then, according to him, a number of problems arise. For example, a long period of consideration of applications, despite the fact that new equipment “was needed yesterday.” This is also a difficulty when holding a tender for the purchase of equipment worth over 60 thousand euros: government procurement will already be required, which, let’s say, the supplier from China has nothing to do with.

Therefore, Mr. Director does not rule out that the owner of Nevotex will prefer to buy not a new machine with the help of the fund, but a used one, entirely at his own expense.

Yuri Sayya considers the chances of Narva enterprises to receive benefits to be quite high.

One page left
The head of OÜ Kivirand, Viktor Alekankin, had no hesitation at all about applying for a subsidy at the end of the seminar.

Victor Alekankin: our project was born in our thoughts a long time ago. Now the time has come to implement it. Photo: Tatyana Zavyalova

His company has been operating in Kohtla-Jarve for about 30 years and in some years it was included in the TOP of enterprises in the chemical industry of Estonia.
– Now I’m writing a project plan for preliminary consultation: it’s already page 10 out of 11.

Then I will translate it into Estonian and wait for the results,” Mr. Alekankin shared with the correspondent.

Reference:

More detailed information about the conditions of support measures can be found on the website of the joint institution EAS and KredEx:

Photo: Tatyana Zavyalova

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