On 7 July 2011, the Verkhovna Rada of Ukraine approved Budget Code amendments that take into account proposals initiated by IBSER to improve the capacity of local governments to implement development project through borrowing.
In order to facilitate the elaboration and accelerated approval of these amendments, IBSER provided them for consideration under the MFSI Project at the Financial and Economic Forum and took part in the meetings of working groups at the Verkhovna Rada Budget Committee.
The approval of these amendments will significantly strengthen the capacity of local governments to implement infrastructure projects at the expense of borrowed resources and provided guarantees. In particular, from now on, cities will be able to grant guarantees for obtaining credits from international finance organizations without any restrictions, and can borrow amounts up to double that in effect previously, i.e. at 200% of the municipality’s development budget.
In addition, the provisions included in the legislation provide for:
- better protection for creditors, in particular, by inclusion of indicative forecast indicators of local and guaranteed debt into the local budget forecast; and
- improved budget transparency, in particular, through the inclusion of information on local debt and the provision of local guarantees, including their total amount, into State budget execution statements .
Glyanec