Kamyanets-Podilsky, Khmelnytsky Oblast, intends to issue municipal bonds and attract investments to improve the municipal infrastructure, the city’s mayor, Oleksandr Mazurchak, announced Wednesday at a news conference in the press center of LIGABusinessinform.
The long-term credit rating recently assigned to the city, uàÂÂ+, will allow the local government to finance the infrastructure development also through borrowing, not only sale of land, transfers from the central budget, and investments already made, as used to be the case, the mayor said. Moreover, he said the rating will help to attract additional investments to the infrastructure and more tourists to the city.
Kamyanets-Podilsky is one of Ukraine’s most popular tourist attractions. “We do have what to look at in the city, but we need appropriate infrastructure, hotels, restaurants and cafés, and entertainment complexes,” Mr. Mazurchak said.
Speaking about measures that the city has been taking for several years to enhance its investment appeal, Mazurchak cited the raised status of the Kamyanets Conservation Area up to the national level, implementing the Economic Development Strategic Plan and the ten-year Tourism Infrastructure Development Program, and restoring historical buildings.
As for money to be received from the bond placement, this will be channeled toward road repair and construction, energy sector development, pipes replacement, and city lighting, the mayor said.
Credit-Rating, an authorized independent rating agency, gave Kamyanets-Podilsky the highest speculative grade uaBB+ in May 2006. Evaluating the city’s creditworthiness, the agency took into account many factors. Those that supported the rating included:
- Grown city budget revenues over 2001-2005;
- Absence of direct obligations as of April 1, 2006;
- Growth of most economic development indicators over 2001-2005;
- Improvement in basic social development indicators over 2001-2005;
- Small business development over 2001-2005;
- Significant potential for tourism industry development in the city;
- Predominance of working-age population in the age structure; and
- Sufficient experience of the mayor and most municipal government officers, which facilitates implementation of the Economic Development Strategic Plan.
Olha Shubina, head of the Credit-Rating Municipal Ratings Department, told LED Monitor, “When we determine a rating, we look at five prior periods and the city’s plans for the future.” She said Kamyanets-Podilsky had provided its Strategic Plan to the agency. “We reviewed what the city development will be directed to, what priorities are set there… We almost never use indicators [from strategic plans] for calculations, but the very fact of strategic plan existence is a plus.”
Kamyanets-Podilsky Deputy Mayor for Economy Volodymyr Kazachuk confirms that the Strategic Plan existence was taken into account by the rating agency. “The Plan implementation has just started, and today it’s difficult to say about any specific results of its implementation,” he said. “In this case, we say about normal, sound, and transparent prospects.”
“We don’t consider the Strategic Plan a tactical tool for search of investors right now… The Strategic Plan is a tool for creating a normal investment climate. And if the climate is normal, then we feel an increase in inflow of investments and investors already today and certainly foresee the same in the future,” Mr. Kazachuk told LED Monitor.
The Kamyanets-Podilsky Economic Development Strategic Plan was drafted with assistance from the USAID LED project in February and approved by the City Rada in March 2006.
Information about the city can be found at Kamyanets-Podilsky page.