Gov’t strengthens control over use of external debt

From May 1, 2022:

• in order to attract external debt and regulate its provision, state-owned enterprises will be automatically classified as “low-risk”, “medium-risk” and “high-risk” according to their financial condition;
• the amount of external borrowing will be reflected in the business plan of state-owned enterprises.

The measures are aimed at establishing control over the attraction and use of external debt by state unitary enterprises and business entities with a state share of 50% or more in the authorized capital and legal entities with a state share of 50% or more in the authorized capital.

The document states:

• the upper limit of external debt servicing costs (interest rate, commission and total remuneration) of enterprises with state participation will be set quarterly by the Republican Commission for Ensuring Openness and Transparency of Public Procurement;
• consideration of feasibility studies and other documents of projects financed by external borrowing of state enterprises in the competent authorities will be carried out after the submission of a positive opinion of the Republican Commission or documents confirming its notification.

The CabMin resolution approved the Regulations on the procedure for attracting external debt by state-owned enterprises. The Regulation regulates the procedures for obtaining permission from the Republican Commission to attract foreign loans and control the state and activities of state-owned enterprises.