The Ministry of Economy proposes to write off debts of regions on budget loans to the center for technology parks

The Ministry of Economy proposes to once again expand the possibilities of writing off regional debts on budget loans in exchange for investments from the regions – until 2024, the center is ready to forgive 671.4 billion rubles, but the regions must use the funds to implement new investment projects. As Kommersant found out, the regions do not have time to exhaust the limit – so far the government has agreed to spend only 256.7 billion rubles on infrastructure for new investment projects. The Ministry of Economy proposes to soften the conditions and allow funds to be spent on the creation of technology parks in the field of high technology. According to experts, the changes can stimulate the innovative development of the Russian Federation – but the mechanism risks remaining unclaimed due to its less attractiveness compared to other measures to support regions.

The Ministry of Economy has prepared draft amendments to Government Resolution No. 1704 of October 19, 2020 on the rules for writing off debts of constituent entities of the Russian Federation on federal budget loans. Regions that are developing infrastructure to launch new investment projects in priority sectors (agribusiness, tourism, processing and mining of minerals, except oil and gas, housing and road construction) can count on this. The selection is carried out by the Ministry of Finance, the Ministry of Economy and line ministries.

As Kommersant was told by the Ministry of Economy, from 2021 to 2024 the government agreed to redirect the regions’ debt repayment of 671.4 billion rubles to infrastructure. However, as of November 2023, the regions had not exhausted even half of this capacity – 256.7 billion rubles were approved for restructuring. In order to expand the regions’ ability to access the remaining funds, the Ministry of Economy proposes to soften the conditions for access to them, allowing regions to pay for infrastructure for new projects not only in full, as now, but also in part. “Now it is generally impossible to finance a facility that began construction before 2021; the amendments will allow partially financing activities that are implemented after 2021, even if the construction itself began earlier,” the department explained to Kommersant. The selection of investment projects implemented by SEZ residents will also become easier: instead of a project summary and a special agreement, the SEZ resident only needs to provide a residency agreement. According to Nikita Khilimonchik, Deputy Head of the Ministry of Economy of the Orenburg Region, the changes will make it easier for new companies to enter the program. So far, over two years in the region, about 700 million rubles have been invested in creating infrastructure in the SEZ.

It is also proposed that regions be given the right to redirect the repayment of debts to the budget and for the construction of technology parks in the field of high technologies. The difference between them and other sites (industrial parks, industrial technology parks) is that they are created primarily to accommodate residents who are not involved in industrial production, the Ministry of Industry and Trade explains – for example, they can develop software, engage in research and development, or high-tech services to industrial enterprises. “If this proposal is supported, the regions will receive additional opportunities to develop infrastructure for high-tech businesses,” the department believes. The initiative is in line with the government’s ideas about reorienting budget support towards new state policy priorities – innovative economic development and import substitution.

Probably, as planned by the Ministry of Economy, spending on expanding the infrastructure of innovative technology parks will allow the regions to create the necessary basis for launching new investment projects, for the stimulation of which the government de facto reserved this money. This is not the first time the government has expanded the possibilities of writing off regional debts – previously this was allowed to finance projects that did not pass the investment phase (see Kommersant on August 7). At the same time, easing the requirements will reduce the burden on regional budgets – since the beginning of the Russian military operation in Ukraine, the debts of the regions have been steadily growing. If at the beginning of 2022 budget loans amounted to 1.4 trillion rubles. (55% of regional debt), then in January 2023 – almost 2 trillion rubles. (over 70%), by October the amount reached 2.4 trillion rubles. (78%).

However, the expansion of write-off opportunities has not yet had a noticeable impact on the activity of the regions. Among the reasons, Dmitry Zemlyansky, head of the research center for spatial analysis and regional diagnostics IPEI RANEPA, names the shortage of ready-made projects with clear tax effects and their focus on other instruments (infrastructure budget loans, loans from the territorial development fund, etc.), which provide the regions with significant amounts of additional funds (for example, IBC), while debt write-off is only expected. “The amounts written off are small. In October there was the first write-off for 12 regions for 8.2 billion rubles. These are incomparably small amounts compared to other forms of support; they are not capable of fundamentally changing the situation,” the expert notes.

Diana Galieva, Oleg Sapozhkov