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Large-scale Forest & Agricultural Land Acquisition | 520.3ha | Round 4
100% Funded

100%
Need:0.00€
Interest rate:36%
Period:12 months
Target: 30 000€
Opens: 2021/10/11
Expires: 2021/11/11
Type: Specialized
Location: Latvia, Russia
Investments: 125

SUMMARY

CROWDESTOR is announcing a new investment opportunity - Large-scale forest and agricultural land acquisition  ǀ 520.3ha

The current investment opportunity offers CROWDESTOR investors to fund the acquisition of 4 785 hectares of abandoned agricultural land in the Pskov region of Russia for recultivation and further resale.

This round financing target is 30 000EUR, the loan term is 12 months, and the interest rate is 36%.

The total funds raised for the project in 6-8 rounds: 1 791 973 EUR.

FLTV is predicted to be 39%

The predicted future value is 4 545 750 EUR (950EUR/ha) after the cultivation and legal work.

The land will be sold for at least 3 409 312 EUR (Selling price 25% below the market price to ensure the fast closure of a deal. Average price 712,5 EUR/ha).

BUSINESS MODEL

The Borrower plans to purchase 4 785 hectares of abandoned agricultural land in the Pskov region of Russia. The land will be cultivated and repurposed:

After cultivation, obtaining a new status of the land, and preparing the land as "ready-to-use," we will receive 2871 hectares of forest land, 1674 hectares of agricultural land, and 239 hectares of farmland. Ready-to-use land is in great demand all over the world. Considering the country's new programs, huge investments, and a new opportunity to have a forest in private ownership, we will provide the market with a profitable product.

 

Before September 2020, forest land in Russia could not be legally owned by a private company or an individual. However, a new Russian government decree* will allow forestry, including timber harvesting, on abandoned agricultural lands. The decree drastically changes the forest management system in Russia, making private ownership on growing forest and private forest management possible, and creates a new potential resource base to mitigate the impact on intact forest landscapes.

As for the agricultural lands, the Borrower will be able to benefit from “State program 2021-2030 on the involvement of agricultural land in the turnover”. The program will grant a total of 16.5 billion EUR on purposes like melioration. 

Other favorable factors are the geographic position and convenient logistics. The land is well-connected with Moscow, St. Petersburg, Riga, Tallin, and Vilnius and major ports of Russia and the Baltic states.

LOAN

Borrower: Limited Liability Company ''Pskov-Agro-Forest' registration code: 1216000003064 (further referred to as the 'Company') The newly established company is a sister company of Limited Liability Company ''Pskov-Forest'', registration code 196027002764, and is represented by Ivanov Roman Sergeevich, that is Director of LLC ''Pskov-Forest''.
Maximum target: 30 000 EUR
Loan period: 12 months
Interest rate: 36% p.a.
Total funds to be raised  1 791 973 EUR
Repayment: The interest and the loan principal are paid in a bullet payment at the end of the Loan Term.
Collateral: Mortgage on a land plot
Location: Latvia, Russia

Remember - interest rate payments start calculating from the day you make your investment!

THE PROJECT

The Borrower plans to spend 374,5 EUR per hectare, including land purchase, taxes, legal fees, working capital, land reclamation, and the CROWDESTOR fee. 

The purchased abandoned agricultural land plots are located close to roads and railways connected to Moscow and St. Petersburg and the major ports of Russia and the Baltic states, making it favorable in terms of logistics. The borrower will also buy all the necessary equipment, bringing down land clearing and cultivation costs. 

Thus, the initial investment of  1 791 973 EUR will result in the ready-to-use forest, farm, and agricultural land worth 4 545 750 EUR ready for sale or business operations. 

The project's first stage includes purchasing 168 hectares of abandoned agricultural land in July 2021, melioration, shrub cutting, and plowing in the course of 2022, and the sale in December 2020. 

For more information, please see the presentation attached. 

MARKET OPPORTUNITY 

Before 2020, forest land ownership was illegal in Russia; forest land plots could only be rented from the state. However, with thousands of hectares of agricultural land overgrown with forest, the Russian government provided the opportunity to legally repurpose the overgrown agricultural land as private forest land by approving a decree “On the peculiarities of the use, protection, protection, reproduction of forests located on agricultural lands.” Thus, private forest land is a completely new offering on the Russian market, which has been anticipated by local and international investors alike. 

As for the agricultural lands, the Borrower will be able to benefit from “State program 2021-2030 on the involvement of agricultural land in the turnover”. The state program involves allocating subsidies for the preparation of land surveying projects from common land ownership, registration of unused lands with cadastral registration, and irrigation, cultural, agroforestry, and phytomeliorative measures and for liming acidic soils. The program will grant a total of 16.5 billion EUR on purposes like melioration. 

Other favorable factors are the geographic position and convenient logistics. The land is well-connected with Moscow, St. Petersburg, Riga, Tallin, and Vilnius and major ports of Russia and the Baltic states. 

THE BORROWER

The Borrower successfully engages in timber harvesting and processing in Russia and Latvia, cooperates with woodworking companies in Latvia and Estonia, and supplies finished products to the Riga commercial port. Since 2020, after introducing new rules, the Borrower provides the landowners in Russia with a full cycle of forest care. From seedling to timber and sale - we ensure sustainable and quality forest management.

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