How local authorities can obtain financial resources for development projects by issuing municipal bonds

Lack of financial resources is a main reason why Moldovan localities stagnate. Municipal bonds could fill the gap, yet no town hall in the country has used them so far. The process is complex, and potential investors are discouraged by a tax regime less favourable than for other financial instruments. Bonds could fund water supply and sewerage systems, treatment plants, household waste collection and paid parking.

The study proposes harmonising the tax regime for investments in securities, allowing bond issuance in foreign currency, raising the debt limit to 30% for certain local authorities, and developing a programme to promote municipal bonds. Officials from the Ministry of Finance, the Dutch Embassy, the Congress of Local Authorities of Moldova and the National Financial Market Commission backed financial autonomy for local authorities. Expert-Grup is also launching a competition to select three local authorities that will receive support with issuing and managing bonds transparently.