Importance The paper explores cash flows from taxes, including the taxes of industrial park resident enterprises, that are going into the regional budget. Objectives The objective is to prove the cost-effectiveness of investments made from the regional budget to develop an industrial enterprises' infrastructure. The hypothesis of the study is the assumption about payback of budget expenditures for industrial park creation funded with tax revenues of regional budget. Methods The study includes a forecast and analysis of cash flows from creation of a State industrial park at the expense of regional budget investments. The economic efficiency of resident enterprises, management company, and fiscal performance of the park are calculated under discounted cash flow method. A cumulative method was used to justify the discount rate. Risks were analyzed by evaluating the investment project sensitivity to changes in three variables. Results When underpinning the cost-effectiveness of the project, I show that the project may be efficient if tax credits are provided. All performance indicators meet the necessary criteria subject to a reasonable discount rate. Conclusions It is possible to create an industrial park funded with the regional budget money with a 6–7-year payback period.
Keywords: industrial park, budget financing, budget effectiveness, fiscal performance, investment
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