Russia's Finance Ministry will expand measures allowing regional governments to write off two-thirds of their budget loan debts to support military operations in Ukraine.
Finance Minister Anton Siluanov announced the planned policy expansion in comments reported by Russian state news agency RIA Novosti. He said the ministry intends to broaden relief options for federal subjects that allocate their saved funds to tasks connected with the military operation.
Siluanov added that the Finance Ministry also plans to assist Russian border regions. Those border territories have incurred additional municipal expenses and budget strains due to the ongoing security situation along the frontier.
Budget loans in Russia are low-interest credits issued by the federal treasury directly to regional governments. Regional authorities rely on these federal loans to maintain local balance sheets, cover revenue shortfalls, and fund public infrastructure projects.
Redirecting funds to military costs
Under the new proposal, regional administrations can write off two-thirds of their debt obligations to the central government by directing freed-up money toward defense and security priorities linked to the conflict in Ukraine.
The announcement builds on a previous debt relief measure enacted by the Russian government. Prime Minister Mikhail Mishustin signed an order that wiped out two-thirds of budget loan debts totaling nearly 8.4 billion rubles for nine Russian regions.
The nine entities included in Mishustin's order were the Republic of Altai, Bashkiria, Chechnya, and the regions of Ivanovo, Leningrad, Orel, Saratov, Tambov, and Tver.
Infrastructure investment matching
In that previous round of write-offs, the amount of debt canceled for each subject matched the exact size of its investments in local modernization programs. Eligible projects included upgrading housing and public utility networks, rehousing citizens from dilapidated buildings, and acquiring new public transport vehicles.
Housing and utility infrastructure in Russia, known as ZHKH, represents one of the largest expenditure categories for regional budgets. By allowing regions to count investments in these public services toward debt cancellation, Moscow previously encouraged local capital spending.
The new Finance Ministry initiative expands that policy model to include military and border security expenditures. The ministry did not specify when the expanded write-off mechanism will take effect or provide an estimate of the total debt expected to be written off under the new rules.
