Possible Forms and Terms of Financing

Direct investment.

Joint venture with the investor.
Investment Project Initiator.

Committee of the Republic of North Ossetia−Alania on state regulation of

production and turnover of ethyl alcohol, alcohol, brewing products and soft

drinks.

362040, RNO−A, Vladikavkaz,

Dzhanaev St., 22,

Phone: (8672) 53−37−00, 56−32−31

E−mail: djanaeva@mail.ru

Tillage using together with restoring irrigation potential

Restoring irrigation system, tillage irrigation.

Grain, industrial and vegetable crops, setting up vine lands and gardens, and

food reserve.
Location.

The Republic of North Ossetia−Alania, Mozdok District.

Up to 15 thous. hectares of irrigated tillage.

Inspection certificates on irrigative system condition and resources necessary for system restoration.

125 mln. rubles.

Payback Period — 5 years.

Increasing of grain crop yield up to 40−60 centners per hectare.
Possible Forms and Terms of Financing.

Long−term rent of irrigated areas, integrated farm enterprise forming.

Joint venture with the investor is possible.
Investment Project Initiator.

Farming administration AMSU, Mozdok District.

AMSU Deputy Chief, Chief of Farming Administration —

Sergey G. Khabaev,

RNO−Alania, Mozdok, Tchkalov St., 2b,

Phone: (86736) 3−40−19, 3−28−61

District territory — 2014 km2, including:

• for agricultural production — 397.4 km2

• for industrial production — 7.5 km2

• for forestry production — 418.9 km2

• for settlement lands — 32 km2

• areas of preferential protection (sanatoria etc.) — 299 km2

• reserve lands — 858.2 km2

Population — 36.0 thousand people, including:

urban sector — 20.3 thousand people

rural sector — 15.8 thousand people

Administrative center — Alagir

Population density — 18.0 persons/km2
Industry

In Alagir district there are large−scale and medium−sized industrial enter−prises that

provide the following products:

FSUE "AZS" — resistors;

RSUE "Alagirsky DOZ" — furniture, cross−band veneer;

MUE "Alagirsky Zavod Stroymaterialov" — building brick;

Alagirsky Bread−Baking Plant — bread and bakery products;

JSC "Alagir" — dairy products;

LLC "Iriston−Alagir" — mineral water, soft drinks;

LLC "AST" — coast−protecting concrete structures;

MUE "AZhREU" — plastic windows and doors;

RSUE Alagirsky forestry and RSUE "Suadagsky leskhoz" — rough furniture sawing;

LLC "DDD" — alcohol;

LLC "Dagstroy", LLC "Stroyservis" — broken stone production;

Sadonsky Lead−Zinc Industrial Complex, SGU GRP, Sadonsk Mine Group JSC

"Electrotsink" — extraction of ore.

By July 1st, 2007 there have been 8932 telephone subscribers (including 64 telephone subscribers for the first half of year 2007). Density of telephone numbers for 100 residents — 24.81 (for comparison 28.0 — for the whole republic).

By the beginning of 2007 there were 8368 hectares of tillage, 447 hectares of perennial plants, 755 hectares of hayfields and 3085 hectares of pastures in−cluding farms.

12655 hectares of agricultural grounds in total.
For the purpose of national project "Agro−Industrial Complex Develop−ment" by the

theme "Accelerated Development of Cattle Raising", PAC (Production−Agricultural

Cooperative) "Gory Osetii" has got a loan in the amount of 10mln. rubles for reconstruction of cattle raising farm for 8 years. Estimated ca−pacity is 750 heads.
Climatic and natural conditions and availability of mountain hayfields and pastures make

it possible to breed and fatten the beef strains of cattle as well as to develop sheep

breeding. The large variety of high−quality plants on high−mountain alpine meadows

decreases the necessity to include expensive food additives in breeding ration.

It is supposed to build mountain recreation complex "Mamison" on the territory of

Alagir District based on the Federal Special−Purpose Program "Yug Rossii (2008–2012)".
In the project it is supposed to build tourist complex facilities (overhead rope−ways

and alpine skiing tracks, accommodation buildings, hotel system, service facilities).

sary condition of project implementation.

6.8 milliard rubles.

ment of hydropower engineering, production of inert building materials, and develop−

ment of cattle raising.
Employment

The number of unemployed citizens of Alagir District registered in the population

placement service on July 1st, 2007, is 995 persons. Average monthly wage of

employees is 6511.9 rubles (for the whole Republic of North Ossetia−Alania —

7354.7 rubles).
Housing Facilities:

Water supply system — 88.8%;

Sewerage — 87.7%;

Central heating — 76.8%;

Hot water supply system — 76.8%;

Baths (showers) — 76.8%;

Gas supply — 88.1%;

Floor standing fryers and electric cookers — 7.0%.

District territory — 377 km2, including:

• for agricultural production — 25809 hectares

• for industrial production — 1330 hectares

• for forestry production — 1236 hectares

Population — 27.8 thousand people, including:

urban sector — 16.9 thousand people

rural sector — 10.9 thousand people

Administrative center — Ardon

Population density — 73.9 persons/km2

In Ardon district there are large−scale and medium−sized industrial enter−prises that

provide the following products:

LLC "Kolos" — bread;

CJSC "Alpha", LLC "Master−Prime" — dairy products;

MUE "Ardonskaya Tipographiya" — forms, newspapers.

By July 1st, 2007 there have been 6589 telephone subscribers

(including 93 telephone subscribers for the first half of year 2007).

Density of telephone numbers for 100 residents — 23.7

(for comparison 28.0 — for the whole republic).
Industrial Agriculture Sector

By the beginning of 2007 there were 19448 hectares of tillage, 97 hectares of perennial plants, 893 hectares of hayfields and 1471 hectares of pastures in−cluding farms.

21909 hectares of agricultural grounds in total.
On the district territory LLC "Kadgaron−Agro" is located which has the corn sorting

factory that is going to be shut down and to be subject to insolvency.

fish and young fishes for trout farms based on current fish−farm with capacity 200 thousand pieces of young trout. The total area of ponds in the district is 64.4 hectares; area suitable for operation is 58.4 hectares. The number of ponds is 15 units. Ready−to−operate facilities of SPK "Rodnik" together with 5.5 mln. rubles of investments allows trout output to become up to 100 tones and selling up to 70 tones of fish a year in 2009.

successfully used for breeding geese for fluff and nutritious diet liver paste, as well as

ducks for fluff and meat.
Besides, a power process station is planed to be constructed that will allow working

plough−lands better and more effectively both inside and outside the district.

get domestic production milk in the amount of 50 mln. rubles.

commission a canning shop with capacity 10 mln. standard cans. In addition, it is

planned to produce soya−based milk up to до 5 thousand tones. The quality of pro−

duction is counted on. This shop will provide up to 40 work places.

The Ardon District has considerable reserves of underground water supply both clus−

ter and individual water supply points (95 running wells). Chemical analyses and

laboratory tests of underground waters approve water to be unique and conform to all

the sanitary requirements. Therefore, extraction and pouring of quality drink water is

an upcoming trend for investment activities.

proved by numerous springs and sources available which water is ideally suited for

raising trout as well as by ponds available in district farms.
In addition, investors are proposed to participate in the project on industrial engineer−

ing for gravel broken stone and sandy gravel on the base of operating en−terprise LLC

"Agroprominvest" (Ardon) with capacity 72 thousand m3 a year.
There are favourable conditions for agriculture.
Employment

The number of unemployed citizens of Ardon District registered in the popu−lation

placement service on July 1st, 2007, is 1077 persons. Average monthly wage of

employees is 4902.9 rubles (for the whole Republic of North Ossetia−Alania —

7354.7 rubles).
Housing Facilities:

Water supply system — 99.2%;

Sewerage — 97.9%;

Central heating — 95.7%;

Hot water supply system — 81.3%;

Baths (showers) — 81.3%;

Gas supply — 97.9%.
DIGORA DISTRICT
Description And Investment Potential of Digora District

District territory — 585 km2, including:

• for agricultural production — 208.3 km2

• for industrial production — 25.0 km2

• for forestry production — 40.0 km2

• for settlement lands — 138.2 km2

• areas of preferential protection (sanatoria etc.) — 60.4 km2

• reserve lands — 113.1 km2

Population — 20.2 thousand people, including

urban sector — 11.4 thousand people

rural sector — 8.8 thousand people

Administrative center — Digora

Population density — 34.7 persons/km2
Industry

In Digora district there are large−scale and medium−sized industrial enter−prises that

provide the following products:

Digorskaya Factory of Corrugated Cardboard Packages — corrugated pack−ages;

Digorsky Bread−Baking Plant — bread and bakery products;

LLC "Berd−Lavera", LLC "Ursdon" — alcohol, vodka, and wine;

LLC "Ir−les", MP "Digorsky Leskhoz" — wooden items.
Communication

By July 1st, 2007 there have been 4343 telephone subscribers

(including 91 telephone subscribers for the first half of year 2007).
Density of telephone numbers for 100 residents — 21.5

(for comparison 28.0 — for the whole republic).

By the beginning of 2007 there were 13548 hectares of tillage, 256 hectares of peren−

nial plants, 1371 hectares of hayfields and 2668 hectares of pastures in−cluding

farms. 17843 hectares of agricultural grounds in total.

theme "Accelerated Development of Cattle Raising" LLC "Rostok" and CJSC

"Vladimex" has got loans for building and reconstruction of cattle raising farms for

8 years. The works on the theme are being carried out.

make it possible to breed and fatten the beef strains of cattle as well as to develop

sheep breeding. The large variety of high−quality plants on high−mountain alpine

meadows decrease the necessity to include expensive food additives in breeding

ration.
River and pond resources together with investment activities may be successfully used

for breeding geese for fluff and nutritious diet liver paste, as well as ducks for fluff and

meat.
Investment Potential

There are explored sources of salubrious mineral water on the territory of Digora

District, therefore, development and building of sanatorium and resort medical treat−

ment facilities is an upcoming trend.

high−quality raw materials available in the area of settlement Dur−Dur for brick and

tile production. Total reserves of explored deposits are 30.6 mln. m3. This raw material

can be used for clay front brick of grade 150.

install gas−turbine expander plants on high pressure gas supply lines for electric

power generation and construction of midget hydropower plants on the Ursdon River.

Upcoming trends for district development are woodworking, agriculture, food industry

and canning production.
Employment

The number of unemployed citizens of Digora District registered in the population

placement service on July 1st, 2007, is 1167 persons. Average monthly wage of

employees is 5092.4 rubles (for the whole Republic of North Ossetia−Alania —

7354.7 rubles).
Housing Facilities:

Water supply system — 95.0%;

Sewerage — 91.1%;

Central heating — 88.4%;

Hot water supply system — 86.4%;

Baths (showers) — 86.4%;

Gas supply — 99.8%.
IRAF DISTRICT
Description And Investment Potential of Iraf District

District territory 1376 km2, including:

• for agricultural production — 457 km2

• for industrial production — 6 km2

• for forestry production — 227 km2

• for settlement lands — 144 km2

• areas of preferential protection (sanatoria etc.) — 208 km2

• reserve lands — 334 km2

Population — 15.2 thousand people

Administrative center — settlement Chikola

Population density — 11.1 persons/km2
Industry

In Iraf district there are large−scale and medium−sized industrial enterprises that pro−

vide the following products:

SE "Irafskaya Shveyno−Galantereynaya Fabrika" — working clothes;

LLC "Chiko" — mineral water, beverages, canned goods;

"Irafskaya Tipographiya" — forms and newspapers;

"Irafsky Mekhleskhoz" — furniture blanks.
Communication

By July 1st, 2007 there have been 3481 telephone subscribers

(including 28 telephone subscribers for the first half of year 2007).
Density of telephone numbers for 100 residents — 22.9

(for comparison 28.0 — for the whole republic).

By the beginning of 2007 there were 10 618 hectares of tillage, 123 hectares of peren−

nial plants, 4 164 hectares of hayfields and 9 220 hectares of pastures in−cluding

farms. 24 125 hectares of agricultural grounds in total.

theme "Accelerated Development of Cattle Raising" LLC "Iraf−Agro" has got a loan for

reconstruction and rebuilding of cattle raising farm (1 750 heads) for 8 years. These

days high yielders of cow population, 140 heifers of Ayshire breed, have been brought

from Finland. In total purchased pedigree cattle is 215 heads.
Climatic and natural conditions and availability of mountain hayfields and pastures

make it possible to breed and fatten the beef strains of cattle as well as to develop

sheep breeding.
The present−day enterprise JSC "Chiko" is specialized in production of high−quality

water "Irafskaya". Stable chemistry and good taste properties have been evaluated by

the gold quality mark. JSC "Chiko" is going to launch the pro−duction of fruit and

vegetable canned goods.

Iraf district is one of perspective districts for development of tourism and midget

hydropower engineering.
Based on the Federal special−purpose program "Yug Rossii (2008−2011)", it is sup−

posed to build facilities for production of ground limestone and construction materials

on the territory of the district. Investment project costs are 460.9 mln. rubles.

In addition, based on the Federal special−purpose program "Yug Rossii (2008−2011)",

it is supposed to form mountain−recreation complex "Digoriya" on the territory of the

district. This project includes reconstruction of motor road Chi−kola — Matsuta —

Komy−Art with access lane to settlement Galiat, gas supply for mountain−recreation

complex, electric power supply system, construction of hotel complexes and service

facilities. Total project costs are 5826.5 mln. rubles.
In the basin of Urukh River it is planned to construct 17 midget hydropower plants with

total power 240MW and annual power generation — 980 mln. kW•h. Total project

costs are 8.53 milliard rubles.
The specified projects will be implemented together with government support by

means of budget funds to be used for activities on infrastructure liberalization to

attract private funds in these economic sectors.
Employment

The number of unemployed citizens of Iraf District registered in the popula−tion place−

ment service on July 1st, 2007, is 1020 persons. Average monthly wage of employees

is 5534.4 rubles (for the whole Republic of North Ossetia−Alania — 7 354.7 rubles).

Water supply system — 97.1%;

Sewerage — 97.1%;

Central heating — 96.0%;

Hot water supply system — 96.0%;

Baths (showers) — 96.0%;

Gas supply — 99.1%;

Floor standing fryers and electric cookers — 0.9%.

District territory 411 km2, including:

• for agricultural production — 235.34 km2

• for industrial production — 5.42 km2

• for forestry production — 10.81 km2

• for settlement lands — 51.68 km2

• reserve lands — 2.36 km2

Administrative center — settlement Elkhotovo

Population — 26.9 thousand people

Population density — 65.5 persons/km2

In Kirov district there are large−scale and medium−sized industrial enter−prises that

provide the following products:

Canning factory "Elkhotovsky", LLC "Avangard" — canned goods;

LLC "Cardgin−LTF" — surgical tape;

LLC "Soyuz plyus", LLC "Kazar" — alcohol;

LLC "Yug−Kristall", LLC "RKZP", LLC "Imperiya", LLC "YUG", LLC "Kirovsky",

LLC "Lider", LLC "Oka" — alcohol;

"Kirovsky Leskhoz" — beech parquet.
Communication

By July 1st, 2007 there have been 4 573 telephone subscribers

(including 66 telephone subscribers for the first half of year 2007).
Density of telephone numbers for 100 residents — 17.0

(for comparison 28.0 — for the whole republic).

By the beginning of 2007 there were 13 795 hectares of tillage, 628 hectares of peren−

nial plants, 1 299 hectares of hayfields and 4 104 hectares of pastures in−cluding

farms. 19 826 hectares of agricultural grounds in total.

Favourable soil and climate conditions together with material support provide potential

heavy yields.
For the purpose of national project "Agro−Industrial Complex Development" by the

theme "Accelerated Development of Cattle Raising" agro−company "Kazbek" has got

loans for 8 years for reconstruction and engineering modification of pig−breeding com−

plex with capacity 15 thousand heads by 115 kg each or 1725 tones of meat on hoof a

year. In the third quarter, this year, high−efficient English breed of pigs (last generation)

will be brought that allows substantial reducing fattening time and decreasing current

expenses. German company "Weda−Dammann and Westerkampf" equipment is fitted.

In the district meat and diary unit for 1 700 heads of cattle with full fattening, keeping

and reproduction cycle is being constructed (reconstructed) and equipped based on

dairy unit SPK "Myasoprodukty" with estimated production capacity 5 thousand tones

of milk a year. In the end of 2006, 250 Schwyz heifers were brought that provided kin−

dles and marketable products.

successfully used for breeding geese for fluff and nutritious diet liver paste, as well as

ducks for fluff and meat.
Investment Potential

Important thruways of federal significance come through the territory of Kirov district:

Federal route "Kavkaz" and Northern−Caucasus railway. There are two railway stations:

station Elkhotovo and station Darg−Kokh (NCRW).

and woodworking on the base of free production facilities.

available.

The number of unemployed citizens of Kirov District registered in the population

placement service on July 1st, 2007, is 1463 persons. Average monthly wage of

employees is 5288.9 rubles (for the whole Republic of North Ossetia−Alania —

7354.7 rubles).
Housing Facilities:

Water supply system — 99.8%;

Sewerage — 84.9%;

Central heating — 100.0%;

Hot water supply system — 71.6%;

Baths (showers) — 70.8%;

Gas supply — 100.0%;
MOZDOK DISTRICT
Description And Investment Potential of Mozdok District

District territory — 1071 km2, including:

• for agricultural production — 859.8 km2

• for industrial production — 32.43 km2

• for forestry production — 97.72 km2

• for settlement lands — 5.247 km2

• reserve lands — 1.182 km2

Administrative center — Mozdok

Population — 87.2 thousand people, including:

urban sector — 41.3 thousand people

rural sector — 45.9 thousand people

Population density — 81.6 persons/km2

In Mozdok district there are large−scale and medium−sized industrial enter−prises that

provide the following products:

LLC "Fabrika karton Mozdoka" — corrugated package;

JSC "Mozdokskie uzory" — Lace curtain nets;

LLC "Mozdoksky kirpichnyi zavod" — building brick;

JSC "Mozdokskaya shveinaya fabrika" bed−clothes, dresses, gowns;

MUE "Mozdoksky khlebozavod", LLC"Kolos" — bread, bakery products, flour;

JSC "Konservnyi zavod"Mozdoksky" tinned food;

JSC "PZhBI" — reinforced concrete products;

JSC "MOEMZ" — steelworks;

MUE "Mozdokskaya tipografia" — printed output;

JSC "Mozdoksky myasokombinat" — meat and meat products, sausages;

JSC " Mozdoksky zavod biopreparatov" — agriculture biologicals;

RAIPO — cooked meats, bakery products, confectionary;

JSC "Pavlodolskaya GES"— power generation;

MUE "Mozdoksky gormolzavod" — dairy;

APK(IAS) — diary, cooked meat, flour.