Three mayor’s offices of the Republic of Moldova benefit from assistance in issuing the first eve municipal bonds in Moldova. These are the Chisinau City Hall, the Sângera mayor’s office and the mayor’s office of Ceadâr-Lunga municipality. The assistance is provided by experts of the Independent Think Tank “Expert-Grup” in the framework of the project “Local governmental bonds as a measure to increase local autonomy,” that is implemented with financial support from the Embassy of the Netherlands in Chisinau, IPN reports.
“Expert-Grup” executive director Adrian Lupușor said that this is a new instrument for the Republic of Moldova, not yet for other countries of the region. “It is an instrument that offers an additional possibility to the local public authorities to mobilize financial resources for capital investments. This way, we aim to support, in a practical way, three mayor’s offices that were chosen at a contest to issue municipal bonds. We offer them support at all the stages of the process,” stated Adrian Lupușor.
The three mayor’s offices formulated investment projects that are to be financed with resources obtained as a result of the bond issue. Two of them, the Sângera mayor’s office and the Ceadâr-Lunga mayor’s office, already completed the stage of choosing, by an open contest, the financial intermediary and of signing a contract with this. This is the commercial bank “Victoriabank” SA. The Chisinau City Hall, for its part, is holding the contest to select the financial intermediary.
Viorel Furdui, executive director of the Congress of Local Authorities of Moldova, said that this financing instrument for developing the local public authorities matches the public administration reform that is aimed at strengthening local self-government, local public authorities’ capacities and decentralization. “In our opinion, we should adopt a diversification and flexibility principle so as to offer the local authorities, regardless of their size, more opportunities for employing different development instruments,” noted Viorel Furdui.
Valeriu Popa, the mayor of Sângera town, said the issue they plan is worth 5 million lei. The money will be used to finance the construction of a water supply system in an area with over 300 households that do not have access to water. They also intend to issue other bonds for other projects. They aim to engage more people from the town so that they purchase bonds and feel that they can contribute to financing the project and in several years will be able to recoup the investment, with the project being also implemented.
The mayor of Ceadâr-Lunga municipality Anatolii Topal said that this instrument is very useful in developing localities. With the own resources, this is rather difficult as these are limited. They aim to implement a project to rehabilitate a number of local road sections and to develop infrastructure so as to become more attractive for the investment community.
In Moldova, even if the legislation allows the local public authorities of all levels to issue municipal bonds, no entity took such a step so far. According to the experts, there are many legislative, investment and even financial infrastructure causes for such a state of affairs. On the one hand, the interaction with the capital market necessitates special financial and economic forecasting capacities from the local public authorities. On the other hand, the current legal framework does not seem favorable for issuing and for investing in municipal bonds.
