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  • 1. The Ukrainian Municipal Credit Market Development V.G. Кozyr Ex e cutive Director of the Ukrainian Municipal Development Fund
  • 2. Brief information about Ukraine
    • Ukraine is an Eastern European country
    • The population of Ukraine is about 48 million people
    • The area of Ukraine is 604 square kilometers
    • Kyiv is the capital of Ukraine
    • There are 30,000 localities in Ukraine
    • There are 1,340 towns in Ukraine
  • 3. The main objective of the Project:
    • Creation of sustainable local borrowing system for the investment requirements of the local self-goverment bodies (BLSG) financing and the development of a Municipal Credit Market in Ukraine
  • 4. The main targets of the Project
    • Improvement of the intergovernmental fiscal policy arrangements
    • Improvement of the regulatory and legal framework for local borrowing
    • Providing technical assistance to the BLSG during the borrowing process
    • Providing technical assistance to the commercial banks - the BLSG lenders
    The Ukrainian Municipal Credit Market Development
  • 5. Principles of the Project arrangement
    • Transparency and openness
    • Creation of the conditions to the BLGS development based on market principles
    • Provision of technical assistance to the BLGS to improve their financial position
    • Improvement of the regulatory and legal framework for local borrowing
    • Encouragement for Ukrainian banks to enter a new line of business - BLGS lending
  • 6. The main objectives of the Ukrainian Municipal Development Fund (UMDF):
    • Providing the access to the long-term funds
    • Improving of the BLSG’s solvency
    • Improving municipalities’ use of strategic planning and their budget and project management
    • Increasing of the commercials banks safety and interest in providing long-term loans for the BLSG and enterprises providing municipal services to the population
    • Preparing reforms to the regulatory and legal framework that provide for the creation of a more favourable environment for the BLSG financing of priority public projects
  • 7. UMDF Organizational Chart Supervisory Board Executive Director Assistant to ED Regions Coordinator Financial Management Specialist Procurement Specialist Banking Specialist Chief Accountant
  • 8. General arrangements of the Project World Bank Application to determine eligibility Ministry of Finance of Ukraine UMDF US$ 150 million Loan ФРМУ Commercial banks ФРМУ Cities (towns) Lending Lending Selection Recommendation of eligibility Technical assistance
  • 9. Project ideology :
    • Creation of a Municipal Credit Market as the financial basis of the economic growth at the local level
    • Quality improvement of the municipal financial management and the implementation of the responsible financial policy
    • Economic growth stimulation at the local level
    • Co-financing of the investment projects:
    • - local budget (20%)
    • - lending (80%)
  • 10. Project ideology (continuation)
    • Foreign exchange risk
    • Credit risk
    The Ministry of Finance of Ukraine Commercial banks
  • 11. Eligible selection criteria for municipalities:
    • The availability of a technical project and feasibility study f or the project
    • Adherence to the legislative limitation as to loan size and total debt outstanding
    • Project confirmity with priorities of the municipal strategical development plan
    • Budget parameters meet minimum standards for consideration of additional debt
    • Eligible projects for financing under the project framework
    • Local authorities positively dispos ed to new approaches to debt finance and project implementation
    • Proper practice of the BLGS of qualitative financial management
  • 12.
    • Water and Waste Water Collection
    • Treatment and Distribution Systems
    • District Heating
    • Electricity
    • Metering Systems
    • Urban Transport
    • Rehabilitation of Local Roads
    • Recreative objects
    • others
    Eligible Capital Investment
  • 13. Directions of the technical assistance provision for municipalities
    • Training programs for conducting a feasibility study of the investment projects
    • Implementation of the full functional system of the fiscal management
    • Transition to the strategic budget planning
    • Development of the responsible debt policy
  • 14. The main difficulties of the project implementation
    • No experience with previous loans to local authorities for capital investment
    • Imperfection and unpredictability of the intergovernmental fiscal arrangements between the state and local budgets
    • Re cent re duction of revenue for local budgets as a consequence of income tax reform
    • Augmentation of the salary expences in the local budget structure and reduction of capital expences