In the Verkhovna Rada of Ukraine, draft law No. 11238, which provides for the creation of the National Development Institution (NDI), has been prepared for the second reading. The Tax Policy Committee supported it and recommends adopting the document as a whole. The draft law aims to create a private law institution that will be responsible for managing international financial aid funds and their intended use.
According to the conclusions of the Main Legal Department of the Parliament, the draft law provides for the creation of favorable operating conditions for the NUR, which can turn it into a key player in the distribution of foreign financial income to Ukraine. In particular, the NUR will be able to control the use of funds from international organizations, foreign governments and other donors.
In addition to the Ukrainian state, international financial organizations, development banks, as well as international cooperation and development organizations from EU and OECD member countries are allowed to participate in the institution. The main goal of the NUR is to provide financial support for projects to restore the economy of Ukraine through cooperation with banks and financial institutions.
The national development institution will be engaged not only in lending and guaranteeing, but also in compensating interest rates, managing risks, conducting financial analysis and investment research. She will also accompany the projects, providing recommendations and consulting the participants.
To finance its activities, NUR will be able to attract funds from various sources, including the state budget, local authorities, foreign states and international financial institutions. This will enable the institution to use resources, in particular received within the framework of international grant programs, to support targeted state and regional projects.
NUR will be able to provide financial services, conclude derivative contracts and carry out other operations with financial instruments to manage investment risks. The procedure for its activity will be determined by the Ministry of Finance, and the National Bank, in agreement with the Ministry of Finance, will have the right to set requirements for the institution’s work.
This draft law can become an important step for the control and effective use of international financial aid aimed at the development and reconstruction of Ukraine’s economy.
