The purpose of adopting the new regulation is to streamline the processes of budget lending, replacing the previous regulation that was in effect since 2022 and has been rendered invalid.
Under the new Regulation, the provision of budget loans is regulated:
- from the republican budget;
- based on other sources to be determined by Cabinet decisions;
- including leasing and material resources.
The main goal of budget lending is to support sustainable economic growth, develop infrastructure and utility systems, as well as ensure national, energy, and food security.
Budget loans will be provided based on the following principles:
- targeted use;
- repayability and timeliness;
- payment;
- collateral and the borrower's creditworthiness.
Interest rates will vary:
- 1–3% per annum for projects related to social significance and infrastructure, as well as for projects in the field of national security;
- 4–5% for infrastructure initiatives of state enterprises and companies with a state share of 50% or more;
- from 6% for commercial projects;
- for international and external loans — no lower than the rates specified in the relevant contracts.
The resolution also specifies particular features:
- financing of strategic startup projects (provided that the applicant's own contribution is at least 30%);
- provision of budget loans to the Deposit Protection Agency of the Kyrgyz Republic — without collateral and creditworthiness assessment requirements in case of insufficient funds in the Deposit Protection Fund.
The new regulation also details:
- banking support for budget loans;
- annual monitoring of borrowers;
- conditions for debt restructuring, which may extend up to 15 years depending on the amount of debt;
- the procedure for early collection and enforcement both in judicial and extrajudicial manners;
- mechanisms for recognizing debts as uncollectible and writing them off.
Additionally, the rules for enforcing claims on property, its sale, and the allocation of the received funds to the budget are clarified.
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