Denys Shmyhal: SRDF reform envisages the financing of projects according to the new principle

The Head of Government stressed that the new bill provides for the division of the fund into three parts. The largest State Regional Development Fund is an important tool to support the regions. For the Fund to be as effective and efficient as possible, it needs to be restarted. This was stated by Prime Minister Denys Shmyhal at a regular meeting of the Government on September 30.

On the outcomes of the session, the Cabinet of Ministers of Ukraine approved the draft law "On Amendments to Article 24 (1) of the Budget Code of Ukraine to improve the efficiency of the use of the State Regional Development Fund."

Denys Shmyhal noted that the amendments to the Budget Code propose to allocate resources to regional strategies with a tangible effect for communities, rather than locally supporting various projects without strategies from the State Budget.

"Currently, such local projects amount to about 60%. The programs financed from the Fund did not correspond to the State Regional Development Strategy rather often, thereby leading to the scattering of finances and suspended infrastructural projects. Everyone is familiar with the phenomenon when schools, kindergartens, hospitals and a number of other social facilities have been unfinished for years," said the Prime Minister.

The Head of Government stressed that the new bill envisages the division of the fund into three parts. The largest of those is 50% to finance exceptionally the projects of national importance for the implementation of the State Regional Development Strategy until 2027.

"These are airports, seaports, bridges, modernization of railways and other state and infrastructure development projects. As well as complex projects for the transformation of coal regions, projects for the transformation of production facilities, etc.," explained Denys Shmyhal.

According to the Prime Minister, a 30% resource will remain for the implementation of regional strategies, provided that projects aimed at socio-economic development are financed. "Another 20% will be used for community development and implementation of local projects: lighting, social facilities, equipment for utilities, etc. That will allow to support all communities, in particular those that will be established after the local elections and will function in full from next year," the Head of Government stressed.

Meanwhile, the Prime Minister noted that the draft State Budget for 2021 contains a record amount of UAH 9.4 billion for the State Regional Development Fund. "This bill is to ensure that these funds contribute to the development of the regions, strengthen their capacity and competitiveness," said Denys Shmyhal.