Зарубіжний досвід використання муніципальних фінансових інструментів

Abstract

The municipalities and united territorial communities of Ukraine after the Russian aggression have a huge deficit of financial resources to reconstruct all the destruction caused to the infrastructure. One of the possible ways to obtain funding is to attract private resources. The best practices of other states show that it is possible through the municipal financial instruments, particularly the municipal debt securities. The purpose of the article is to analyze the best practices of attracting financial resources by the municipalities and territorial communities and establish the most efficient financial instruments for Ukraine. It was determined that the municipalities use several mechanisms to attract additional funding and they are evolving continuously. Depending on the purpose for the allocation of the resources and financial health of the territorial community the local authorities choose the best and the most cost-efficient way to issue the debt securities and determine their nominal value, maturity, coupon interest rate and backing. It was established that the maturity and the type of the coupon interest rates depend heavily on the economic situation in general and the volatility on the capital markets, so the local authorities prefer to issue short and medium-term securities with the variable interest rates. For the capital projects the municipalities tend to issue revenue bonds. It was substantiated that for Ukraine it is preferable to issue medium term revenue bonds as they do not require the international credit rating and depend on the quality and efficiency of the investment project they are to finance. The service of the debt is at the cost of the revenues from the project so it is not an additional burden for the limited local budget resources.