Investment attractiveness rating of Russian regions

“Investment Attractiveness rating of Russian regions” is an annual analytical study by the National Rating Agency (NRA). The information obtained as a result of such an assessment allows drawing conclusions about investment activity of regions, as well as calculating levels of investment attractiveness of regions against the background of created conditions for development of investment activity.

the National Rating Agency (NRA)

The National Rating Agency (NRA) is one of the oldest Russian rating agencies with more than 17 years of experience in the rating and analytical services market. Since 12 September 2019, NRA has been included in the Register of Credit Rating Agencies of the Bank of Russia. At the end of 2019 and beginning of 2020, NRA updated its methods for assessing the reliability and quality of services provided by professional securities market participants and credit methodologies.

At present, NRA ratings are used by investment market participants as one of the important criteria for assessing business efficiency and risks, and are also a tool for increasing transparency of the Russian financial market in accordance with the Bank of Russia Financial Market Development Strategy for 2019-2021.

Victor Chetverikov, NRA President

“The National Rating Agency is a professional team of analysts. Our goal is to develop the rating services industry in Russia. We hope that our experience will allow us to create objective ratings and provide comfortable working conditions for all our clients and partners” — Victor Chetverikov, NRA President.

When assessing the investment attractiveness of the region, the Agency takes into account the availability of natural resources and the advantageous geographical position of the subjects, their labor resources, infrastructure development, the potential of domestic demand, the stability of the socio-political environment, as well as the financial situation.

Methodology of assessment

The investment attractiveness of a region is determined taking into account a set of factors influencing the expediency, efficiency and level of investment risks in each region. These factors are an active background for all investment projects and affect the risk and profitability of these projects. Each of the factors taken into account can be assessed using a special set of indicators. The Agency considers seven key factors of regional investment attractiveness.

Factors of regional investment attractiveness

1. Geographical location and natural resources: convenience of geographical location of the region, main types of natural resources (including fuel and energy resources) availability in the region, level of environmental pollution, opportunities for sewage treatment and processing of industrial waste, energy intensity of regional economy.

2. Labor resources of the region: main characteristics of the labor resources of the region, including the number of economically active population, employment and unemployment rates, the supply of qualified labor force, as well as labor productivity.

3. Regional infrastructure: level of development and accessibility of both hard and soft infrastructure. The term “hard” infrastructure includes transport, energy, telecommunications and housing infrastructure. “Soft” infrastructure includes several components, of which in terms of investment attractiveness the most important is financial infrastructure.

4. Internal market of the region (regional demand potential): level of development of the internal market of the region (including the scale of retail trade and paid services sectors), disposable income and purchasing power of the region’s population.

5. Production potential of the regional economy: aggregate results and peculiarities of economic activity of enterprises working in the region (volume and dynamics of production, size of assets, their quality and efficiency of their use), sectoral structure of the regional economy, level of development of innovation branches.

6. Institutional environment and socio-political stability: expert evaluation of efficiency of regional legislation, which regulates an interaction between authorities and investors, expert evaluation of favorability of regional tax legislation (availability of tax benefits and possibility to receive them), level of social and criminal tension in the region.

7. Sustainability of the regional budget and enterprises of the region: state of public finances in the region (tax revenues amount, budget balance, regional public debt), as well as analytical assessment of the situation of enterprises of the region (profitability/losses of firms, state of accounts payable and receivable of organizations, availability of investment resources).


A set of 56 indicators was used to assess these seven factors of investment attractiveness. They can be divided into three main groups:

1. Statistical indicators are traditionally used to assess most of the factors of investment attractiveness of regions. The source of data for such indicators are official publications of statistical bodies as well as federal authorities. The NRA methodology uses data provided by Rosstat, Bank of Russia, Ministry of Finance, Ministry of Economic Development, Ministry of Communications and Mass Media, Ministry of Natural Resources and Ecology, General Prosecutor’s Office.

2. Surveys of the business community make it possible to assess investment attractiveness indicators that are not quantified. The NRA methodology uses the results of surveys conducted by Rosstat as part of the survey of investment activity of organizations, as well as other organizations, including the Strategic Initiatives Agency and leading business associations.

3. Expert assessments are used to study the factors of the region’s investment attractiveness, for which statistics are not maintained or published in the public domain. In the NRA methodology expert opinions are used to assess a region’s resource potential, quality of the institutional environment and level of social and political stability. Expert assessments are made by NRA analysts and independent experts using a standardized score scale.

In developing the methodology for assessing the region’s investment attractiveness, a survey of experts — representatives of the investment and scientific community (specialists in the field of direct and portfolio investments with experience working with investment projects in Russian regions) — was conducted. The purpose of the survey was to determine the relative importance of certain factors in the final assessment of investment attractiveness. According to the results of the survey, the factors of the regions’ investment attractiveness were assigned weights, which remained unchanged in order to ensure comparability of the results in the future.

Procedure of assessment

Assessment of the regions’ investment attractiveness level includes several stages:

1. Collection of data on each of the 56 indicators for all 85 Russian regions considered in the study. Input statistical, survey and expert indicators are converted into calculation indicators based on correlation of each region’s indicator value with minimum, maximum and average values among all subjects under consideration.

2. Aggregated estimates of all factors of investment attractiveness as well as the integral index of investment attractiveness for each region are calculated using expert weights.

3. On the basis of cluster analysis and identification of threshold values of the index, regions are distributed into three enlarged categories and nine groups of investment attractiveness.

Scale of regional investment attractiveness levels

The level of investment attractiveness of a region is assigned on a special scale divided into three large categories, within each of which three sublevels are distinguished:

Category “High level of investment attractiveness”
IC1 Group: high investment attractiveness — first level
IC2 Group: high investment attractiveness — second level
IC3 Group: high investment attractiveness — third level

Категория “Средний уровень инвестиционной привлекательности”
IC4 Group: average investment attractiveness — first level
IC5 Group: average investment attractiveness — second level
IC6 Group: average investment attractiveness — third level

Category “Moderate level of investment attractiveness”
IC7 Group: moderate investment attractiveness — first level
IC8 Group: moderate investment attractiveness — second level
IC9 Group: moderate investment attractiveness — third level