The Ministry for Communities, Territories and Internally Displaced Persons of Ukraine is developing a concept for reforming the State Fund of Regional Development (SFRD). The concept involves creating a modern and flexible financing tool for regional development, capable of attracting international resources.

The concept proposes transforming the SFRD from a budgetary programme into a separate institution. It is envisaged that the institution will be able to attract not only funds from the state budget, but also international aid, charitable donations and, in the long term, reparations.

To manage the institution, plans are in place to establish a supervisory board and an executive directorate. Their role will be to ensure transparent decision-making and the effective use of resources.

The updated SFRD will also serve as a tool to support communities in attracting loans and engaging with European programmes.

New procedures for the use of SFRD funds have already been approved for 2026. According to these procedures, the Fund's resources will be channelled towards the implementation of medium-term plans for priority public investments in regions and communities. Such projects should comply with:

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

‘Minrehion, jointly with international partners and experts, is developing an updated model for the operation of the SFRD. Many consultations and joint efforts lie ahead. It is also important to find a shared vision with the Ministry of Finance and to work together to develop an effective model,’ said Vitalii Bezgin, Minister for Communities, Territories and Internally Displaced Persons of Ukraine.

As envisaged by Minrehion, the updated State Fund of Regional Development should become a comprehensive tool for implementing state regional policy and should direct resources towards the development of communities and regions.