On 8 July, the Government approved the new Procedure for the Use of Funds from the State Fund for Regional Development (SFRD) and the Procedure for the Assessment and Prioritisation of Medium-Term Plans for Priority Public Investments by Regions and Communities.

The relevant decisions were developed by the Ministry for Development of Communities and Territories of Ukraine. Important to note is that the approval of these documents is in line with the European Commission’s recommendations set out in the Report on Ukraine’s Progress within the framework of the 2025 EU Enlargement Package.

The approved procedures establish a transparent and clear system for the use of SRDF funds, as well as a mechanism for selecting and prioritising projects to be financed by the Fund.

‘The State Fund for Regional Development is one of the key tools for financing the development of communities and regions. The new rules provide a transparent mechanism for channelling funds to implement the medium-term plans for priority public investment in regions and communities. Moreover, the updated funding approach will also bring the public investment management system closer to the principles of the European Union’s cohesion policy,’ emphasised Oleksii Kuleba, Deputy Prime Minister for Restoration of Ukraine – Minister for Development of Communities and Territories.

The Law of Ukraine “On the State Budget of Ukraine for 2026” allocates UAH 2 billion to finance the State Fund for Regional Development.

In 2026, the Fund’s resources will be directed to the implementation of medium-term plans for priority public investments in regions and communities that comply with:

• the State Strategy for Regional Development and the Action Plan for its implementation;
• regional development strategies and action plans;
• strategies for the development of communities and their implementation plans.

In accordance with the approved procedure:

• 30% of the resources of the State Fund for Regional Development will be allocated to the implementation of projects that ensure the fulfilment of the objectives of the State Strategy for Regional Development;
• 70% will be allocated to projects identified in regional development strategies and strategies of communities.

The new procedure also establishes a clear delineation of responsibilities among all participants in the process of preparing, evaluating, and prioritising investment plans, and introduces a unified methodology for their assessment based on socio-economic development indicators and defined criteria.

This decision is an important step in implementing the reform of public investment management and will contribute to the more efficient use of budget funds, regional development, and the alignment of Ukrainian regional policy with European approaches.