Govt allocates funds to restore energy sector before heating season – Ukraine's PM

Ukrainian Prime Minister Denys Shmyhal said this at a meeting of the Congress of Local and Regional Authorities under the President of Ukraine, which was held in Ivano-Frankivsk under the chairmanship of Volodymyr Zelensky, Ukrinform reports, citing the government portal.

The event was attended by Verkhovna Rada Chairman Ruslan Stefanchuk, Head of the Presidential Office Andriy Yermak, government members, heads of regional administrations, representatives of local self-government, and community leaders.

According to the report, Shmyhal outlined three challenges in his speech: preparing for winter, implementing budgets at all levels, and accelerating Ukraine's integration into the EU and NATO.

He recalled that the government's headquarters for preparing for the heating season had been operating since May.

"UAH 10 billion has been allocated to the State Agency for Restoration alone to restore, repair and protect energy facilities. We are also receiving assistance from the United States worth $897 million, which includes funds for generators, gas turbine power plants, and transformers. The European Ukraine Energy Support Fund is also operating and has already received EUR 166 million. The money is available, it is crucial to carry out all the planned activities on time," Shmyhal said.

He noted that the Ministry of Energy had been set a clear task to add 1.7 GW of capacity to the power system by the beginning of the heating season. By the end of the year, in November-December, it is to add another 1.2 GW to the system. Activities to repair and protect power facilities are underway.

He also noted that 11.7 billion cubic meters of gas (80% of the planned volumes) were stored in Ukrainian gas storage facilities, and the country had accumulated 1.5 million tonnes of coal in storage facilities out of the planned 1.8 million tonnes.

"The second challenge is the implementation of budgets at all levels, financial sustainability, and prioritization of expenditures. In the first half of 2023, state budget expenditures amounted to UAH 1 trillion 786 billion. Of this amount, UAH 819 billion was spent on security and defense. UAH 264 billion was spent on social benefits. Healthcare, education, critical infrastructure, and rapid recovery are the next priorities for budget expenditures. We must all take a very responsible approach to projects financed from budgets of different levels. This applies to local authorities in particular," Shmyhal said.

He said that the government had allocated UAH 92 billion in transfers to local budgets over the first six months of the year. An additional 4% of personal income tax has been retained at the community level, which is an additional UAH 15 billion. The government has provided an additional subvention of almost UAH 24 billion for the regions where active hostilities are taking place, of which UAH 10.6 billion has already been paid. Over UAH 20 billion has already been allocated to the regions for rapid recovery.

Shmyhal said that local budget revenues for the first six months had increased by UAH 42.5 billion compared to the previous year. The balances on the accounts of local budgets and budgetary institutions for the first half of 2023 grew by UAH 54 billion and amounted to more than UAH 170 billion.

"With these resources, local governments will have the opportunity to continue to provide funding for priority and urgent needs at the local level. We emphasize the words 'priority' and 'primary' in the context of a full-scale war," he said.

The third challenge, according to Shmyhal, is the acceleration of integration into the EU and NATO. He noted that the European Commission highly appreciated the progress of Ukrainian reforms in the framework of the implementation of seven recommendations.

"We are doing everything we can to open pre-accession negotiations on EU membership by the end of the year. Simultaneously, we are preparing the so-called Ukraine Plan under the Ukraine Facility program announced by the European Commission," Shmyhal added.

Photo: Government portal