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Japan plans to allocate 150 million yen to support implementation of economic and social reforms on Russia’s Sakhalin Island, a statement from Sakhalin’s administration reported Wednesday.

“The intention agreements were signed by Russian Foreign Affairs Ministry and Japanese Embassy in Russia on December 28,” Vice Head of Sakhalin region’s committee for international and foreign-economic relations Valentin Melnikov said, Ria Novosti news agency reported.

According to Melnikov, Sakhalin’s administration officials are to prepare a list of machinery and equipment to be purchased with the donated money. The file will then be submitted to the Japanese officials for approval. Japan provided the same amount of financial aid to Sakhalin in 2007.

The question remains though that if Sakhalin Island is a booming Russian region with multibillion oil and gas projects why it does not have enough funds to support its own development?

According to the Russian governmental development program for the territories of Sakhalin Island and Kuriles in the years from 2008 to 2010, the federal funding will consist of 70 billion rubles, or $2.9 billion. Will Sakhalin region continue to enjoy donations from Japan in the following two years as well?