*Description of the investment proposal

Project description

Attractiveness

Project readiness

Cost

Creation of multisectional recreation park with the purpose of: Development of professional and amateur cycling; Promotion of active and healthy lifestyle among the local community; Creation of the recreation park for the residents of nearby districts.

Great population size of the city (as of 01.10.2013 року - 656,0 thousandpeople). The city ranks 8th in Ukraine by its population size.

Average wage in the city is 3780,0 UAH (as of 01.10.2013 р.) that is in 3,3times more than the level of average minimum wage provided by the state.

A possibility of using the land plot for location of the specialized cycling park.Active position of the cycling NGOs.Support of the Project by the local government. Implementation of the Program of the cycling infrastructure development in

the city of Kryvyi Rih during 2013 – 2015.

The estimated cost of the Project is 221 826,93 UAH, payback period is 4,2year.Project implementation resources – investor’s own funds.

The Project requires design estimates for construction and building works.

1

2

The focus of the Project

Current situation

A part of the land for location of the cycling park is being now used as a sport arena by thecyclers of the "Velokryvbas“ NGO. Using their own resources, the activists of the organizationhave created one of the best cycling road in Ukraine and held there 7 All-Ukrainiancompetitions during 2009-2012. Besides Ukrainian cyclers, there were also amateur athletesfrom neighboring countries (Russia and Moldova).

The only one cycling school is functioning in Kryvyi Rih where one can be trained the only onecycling discipline – road one while more than 20 cycling disciplines are widespread today. Therehas been functioning a school based on SC “Bogatyr" since Soviet times. The schools are lack offunding; the children are being trained to achieve the Olympics results using the bicycles datedsince the 80’s.

In Ukraine there is the only one cycling park «Bukovel Bike Park» (operates seasonally), locatedin the Bukovel tourist complex. At present a cycling park of total area 40 thousand m2 is underthe construction in Yalta.

Creating of the multisectional cycling park will enable to concentrate a set of specializedservices in the field of cycling sports and recreation at one place.

The cycling park will be a base for training and holding competitions at different kinds of cyclingof different levels: road, bmx-Supercross, fourcross, dirt jumping, pamp-track, cross-country.

Construction of the cycling park will take place in the geographic center of the city, that willmake it accessible for the residents both from the northern and southern parts of the city.

In several years the territory of the park will enable to wide a range of services by new trends ofactive rest based in the cycling park.

Comments:

70%

30%

Territorial demarcation, %

For development of professional and amateur cycling

For creating a health and recreation park

Cycling roads. Available mountainous terrain allows toconstruct the cycling tracks of different complexity levelsfor as many cycling disciplines as possible..

Elevator.

Cycling school.

Cycling track.

Alley of Health.

Rope parks and sport climbing walls.

Recreation park.

Territory for winter rest. The place for location ofthis structural object has a natural slope formanagement of winter rest. The projects like this havealready been implemented and are popular in Kharkiv,Kyiv and Dnipropetrovsk.

Aqua zone. Zhovtnevyi Granite Quarry is theclearest water basin in the city. The depth of the basin ismore than 35 m.

3The combination of all the above-mentioned structural objects of the cycling park will provide the city residents withthe opportunity to go in for different kinds of sports as well as to have active and diverse leisure time.

Location Ukraine, Dnipropetrovsk Oblast, Kryvyi Rih, Zhovtnevyi District

Owner Zhovtnevyi Granite Quarry – DVP «Dniprorudkom;

Nearby territory (farmland) –Novopilska Village Council(Novopillya village).

Main characteristics:

Geographical position The land plot for locating of the cycling park is situated in the geographical center of the city.

Area (ha) Zhovtnevyi Granite Quarry – 54,5 ha.

Transport infrastructure Availability of the auto road (needs renovation of asphalt coating ).

Availability of Tube Stations: «Industrialna» (at 4,8 km distance from the Granite Quarry) and«Vovnopryadylna» (at 2,5 km from the Granite Quarry).

The construction of the Tube Station «Vovnopryadylna» is in progress.

Distance to the Kryvyi Rih International Airport is 34 km.

Distance to the railway station Rokuvata – 10 km.

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5

Indicator Unit Value

Discounted Payback Period, DPP year 4,20

Net Present Value, NPV Thousand UAH 42 470,79

Internal Rate of Return, IRR % 21,1

Profitability Index, PI 1,19

Budget (own capital) Thousand UAH 221 826,93

-250000,00

-200000,00

-150000,00

-100000,00

-50000,00

0,00

50000,00

100000,00

150000,00

200000,00

1st year 2nd year 3rd year 4th year 5th year

EBIDTA FCF DCF

Indicator 1st year 2nd year 3rd year 4th year 5th year

EBITDA 36 543,88 59 241,73 87 614,16 134 310,80 157 033,39

FCF 33 014,14 54 457,99 80 676,34 122 278,10 143 717,10

DCF (cumulative) -188 812,79 -134 354,80 -53 678,45 68 599,65 212 316,75

Thousand UAH

- 221 826,93 thousand UAH

Initial investments

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Construction of the cycling road and the Alley of Health

Construction of the cycling track and cycling school

Purchase of the elevator

Construction of the rope park

Construction of rock climbing walls

Labor costs0,61

0,16

0,06

16,0

200,0

5,0

221,83

млн. грн.

INITIAL PROJECT COST,Total, mln UAH.

Key budget items

7

ElevatorCycling road, cycling track, cycling school

Income,thousand UAH

Expenses,thousand UAH

13244,0218611,69

28499,69

53791,1759101,40

0

10000

20000

30000

40000

50000

60000

70000

1st year 2nd year 3rd year 4th year 5th year

725,83 751,67

1036,53

1306,891402,14

0

200

400

600

800

1000

1200

1400

1600

1st year 2nd year 3rd year 4th year 5th year

363,98439,51

530,71

640,83

773,8

0

100

200

300

400

500

600

700

800

900

1st year 2nd year 3rd year 4th year 5th year

191,27

252,95

334,53

442,41

585,09

0

100

200

300

400

500

600

700

1st year 2nd year 3rd year 4th year 5th year

+ 346 %

+ 93 %

+ 113 % + 206 %

8

Rope park Rock climbing walls

Income,thousand UAH

Expenses, thousand UAH

2993,023493,22

3991,584487,83

4981,67

0

1000

2000

3000

4000

5000

6000

1st year 2nd year 3rd year 4th year 5th year

1095,94

1690,75

2282,54

2870,87

3455,23

0

500

1000

1500

2000

2500

3000

3500

4000

1st year 2nd year 3rd year 4th year 5th year

81,3893,58

107,62

123,77

142,33

0

20

40

60

80

100

120

140

160

1st year 2nd year 3rd year 4th year 5th year

133,82153,89

176,98

203,53

234,05

0

50

100

150

200

250

1st year 2nd year 3rd year 4th year 5th year

+ 66 %+ 215 %

+ 74 % + 75 %

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PU “KRYVYI RIH CITY DEVELOPMENT

INSTITUTION” (CDI)

Address: 50038, Ukraine,Dnipropetrovska Oblast, city of Kryvyi Rih, Metalurgiv Avenue, 28.

Tel.: +38 056 492 98 48+38 056 492 98 28+38 056 492 98 66

Fax: +38 056 492 98 66

E-mail: irm_kr@i.ua

Web: www.irm.kr.ua