NSSMC and local communities: capital market instruments for financing development

Oleksii Semeniuk, Chairman of the NSSMC, held a working meeting with representatives of the “EU Strategy for the Danube Region” Association. The discussion focused on practical mechanisms for raising funds for projects in Odesa and other Ukrainian local communities through capital market instruments.

Municipal bonds became one of the key areas.

Given the limited availability of budgetary funding, local communities need to seek additional sources of funding for housing construction, utility network upgrades, infrastructure restoration, and the implementation of energy projects.

Municipal bonds could become one such instrument, allowing communities to raise funds from investors to finance specific development programs. At the same time, the use of such a mechanism requires responsible debt burden planning, a transparent project structure, and terms that are clear to investors.

Separately, the meeting participants discussed a housing project implemented by the city of Mariupol in Bila Tserkva. The first phase of the project involves the construction of 1,200 apartments for internally displaced persons. One of the key tasks is to develop a financing model that will allow the implementation of both the first and subsequent phases of the project.

In this context, we examined the opportunities presented by the law on securitization and covered bonds passed by the Verkhovna Rada.

In particular, for social rental housing projects, a model could be developed to attract investment based on future contractual payments, combined with budgetary or donor support. This approach has the potential to align the investor’s interests with the primary social goal — keeping housing affordable for people.

Such mechanisms may be relevant not only for housing projects. During the meeting, the sides agreed to continue exploring opportunities for using capital market instruments for projects in Odesa, Ivano-Frankivsk, Chernivtsi, cities along the Danube, and other local communities.

“Our goal is to ensure that capital market instruments work not only in theory but also help finance specific projects: housing, energy, infrastructure, and community development. To achieve this, it is important to work with cities to move from the need for funding to a well-structured project that is understandable to investors. This is exactly the kind of practical dialogue we are building today,” said Oleksii Semeniuk, Chairman of the NSSMC.

The NSSMC continues its dialogue with local communities and market participants regarding the use of new financial instruments and the creation of practical models for attracting long-term capital for Ukraine’s recovery and development.