Local Government Bonds – as a measure to foster the local autonomy

Donor: Embassy of the Netherlands in Chișinău

Project name: Local Government Bonds – as a measure to foster the local autonomy

Implementation period: 2020 - 2022 

About project: Through this project we propose to offer support to LPAs in using Local Government Bonds as a mean to increase their capacity to collect financial resources for development projects and offer support for an efficient management of this resources. 

The project goal: The project goal is to empower LPAs to raise funds for local infrastructure projects through issuance of local government bonds and management of these resources in a transparent, inclusive and effective manner, as a means to foster the financial local autonomy and contribute to local development.

The project objectives: 

1. Building capacities of a series of beneficiary LPAs in relation to local government bond issuance;

2. Supporting the LPAs in issuing local government bonds; 

3. Streamlining the legislation for local government bonds issuance.

The main project activities: 

- Holding discussions with commercial banks in order to understand their expectations about the local government bonds;

- Selecting 3 LPAs based on an open and competitive process;

- Organizing a training program for the beneficiary LPAs on issuing local government bonds;

- Supporting the LPAs in the consultative process regarding the priority area(s)/project(s) for channeling the raised funds;

- Preparing the necessary documents, together with the beneficiary LPAs, that are necessary for the bond issuance and facilitating the interaction of beneficiary LPAs with the brokers for bond issuance;

- Conducting a communication campaign at the local level in order to raise awareness and stimulate the local population to support this process;

- Formulating policy recommendations aimed at easing the procedures for issuing local government bonds; 

- Conducting policy advocacy and raising awareness about the need to streamline the legislation for local government bonds issuance.

Project impact: LPAs have access to an additional instrument of funding infrastructure projects – local government bonds – and have the necessary knowledge and capacities to use it in an effective manner.

Short-term impact: Increased financial autonomy of LPAs and reduced clientelism in raising funds for infrastructure projects.

Longer-term impact: Increased local development through modernized infrastructure.