Currently, Russia's biggest paper mill, which produces 20% of the country's pulp and more than 10% of cardboard, is located in the Irkutsk Region in east Siberia near Lake Baikal.
Environmentalists have highlighted damage the mill presents to the lake.
"We hope that each ruble from the budget would generate 4-5 rubles of private investment," VEB Chairman Vladimir Dmitriyev said.
Under current plans, budget funds will be used to build infrastructure including roads and power grids, while the mill itself would be built using private investor funds.
Krasnoyarsk Territory governor Alexander Khloponin said two Russian and four foreign companies had applied for participation in the project.
The Krasnoyarsk Territory Development Corporation, which has charter capital of 120 million rubles ($4.4 million), was founded by Bazovy Element, the regional administration, HydroWGC and Vneshekonombank in May 2006 to look for investment possibilities in the regional economy and to attract strategic investors.
