MIL OSI Translation. Region: Russian Federation –
The decision was made on behalf of the President of Russia.
Russian regions will be able to get budget loans at 0.1% per annum to pay off debts on market borrowing. The rules for granting loans for these purposes were approved by Prime Minister Mikhail Mishustin. The adopted decision will allow the subjects to close their obligations more quickly, and will serve to strengthen regional financial systems.
Regions are free to issue bonds to attract market funding. A coupon is paid on these securities. Budget loans provided for by the signed resolution can be used to cover these obligations. They are also allowed to be used for payments on loans received from commercial banks or international financial organizations.
A soft budget loan can be obtained for a period up to 2029 and paid in equal installments from 2025 to 2029. The possibility of early repayment is also provided.
The loan is provided on the basis of an agreement between the regional authorities and the Ministry of Finance. At the same time, the region undertakes to limit the growth of debt – its share should not exceed 25% of the regional budget revenues.
Concessional budget loans are part of a set of measures to ensure the financial stability of the regions. A significant part of Mikhail Mishustin’s report to the State Duma on May 12 was devoted to this issue. Among the main directions of the upcoming work, he named the implementation of the measures announced by the President in his Address to the Federal Assembly. These include the restructuring of budget loans, the replacement of commercial loans with budget loans, the provision of infrastructure budget loans, and, in addition, the issue of infrastructure bonds that will allow attracting additional extra-budgetary funds for housing construction.
Earlier, the Government doubled the term for granting short treasury loans, approved the rules for restructuring debts, and adjusted the maturity of some restructured debts.
In addition, 300 billion rubles were allocated for direct financial support of regional budgets in 2020. These funds were used to fulfill social obligations to citizens, purchase medicines, support housing and communal services and social infrastructure.
The document will be published.
EDITOR’S NOTE: This article is a translation. Apologies should the grammar and or sentence structure not be perfect.