First municipal bond, as new instrument for realization of significant projects in the municipalities, is expected to be issued in Spring next year, Vice Prime Minister and Minister of Finance, Zoran Stavreski, and Mayor of Skopje and President of the Association of the Units of Local Self-Government Koce Trajanovski announced at the conference for development of municipal capital market in the Republic of Macedonia.
 
First municipalities that can issue municipal bond are Skopje, Veles and Strumica, having greater fiscal capacity, already being awarded credit ratings, Mayor Trajanovski said, adding that Gostivar, Kumanovo, Stip, Gevgelija and Ilinden will also be granted such opportunity, which signed memorandums for obtaining credit rating today.
 
– As local authorities, we are aware that, despite the insufficient financing fro the municipalities, we have to realize certain capital projects which are needed and of great significance to the citizens. Providing clean drinking water, constructing sewerage infrastructure, asphalting streets in certain areas, building schools, hospitals, outpatient departments and similar require lot of funds, which unfortunately cannot be easily provided at once by the local authorities for the time being, Kocevski said.
 
According to him, by issuing municipal bond, many local authorities can provide capital to realize investment projects, and its issuance will contribute for major percentage of the unused capital within different Funds, to be made available, as well as for recovery of the securities market.
 
Minister Stavreski pointed out that the benefits from issuing municipal bonds are multiple, mainly because they provide additional funds for financing specific development projects. Large investments, as he said, will lead to improvement of the local economic situation, job creation, increased production and improvement of quality of life of citizens.
 
– Neither the block grants nor the government loans are a final solution for the financing need of the municipalities. Construction of infrastructure facilities, provision of effective public services at local level, improvement of services of utility enterprises and local public institutions in the field of education, culture, child care are the areas, on which the local authorities are focused, requiring attractive and new sources of financing, i.e. strengthening independence of municipalities in generating revenues, Stavreski said.
 
According to him, issuance of these bonds will mainly mean increase of the indebtedness of municipalities, however, it does not mean that debt increase will be at unsustainable level.
 
– Issuance of municipals bonds will continue to be seen as an alternative or perhaps as cheaper way, rather than taking loans and other borrowings, Minister said adding that, in such case, each municipality itself, as well as the Ministry of Finance will observe the prudent standards for borrowing by municipalities, since one of the standards for issuing municipal bonds is retaining the municipal credibility.
 
He expressed the Government support, stressing that the issuance of municipal bond is an important step forward in supporting the financial independence of municipalities and the economic development.
 
Director of USAID mission in Macedonia Michael Fritz pointed out that he encourages the Government in supporting the municipalities as regards issuance of municipal bonds, which, according to him, are long-term instrument for development. Government funds, as he said, will not be sufficient for the development of municipalities.
 
Expressing the importance for the development of municipalities, he said that their success will lead to success and development of the country as a whole.(MIA)
