Ukrainian communities have simplified issuance of municipal bonds

Ukrainian communities have simplified the procedure for issuing municipal bonds, with the help of which local authorities can attract private capital for large and long-term projects. This concerns, in particular, transport infrastructure, water supply, housing, own electricity generation, and modernization of heating networks.

This was reported by the National Securities and Stock Market Commission.

Previously, local councils had to undergo a full procedure of borrowing approval and issue registration for each series of municipal bonds. Now, if a community plans several public offerings, it can approve a single base prospectus.

After that, new series of bonds can be issued by drawing up a separate decision on the issue and final terms for each series, without re-approval of the base prospectus.

At the same time, the total nominal value of issued bonds may not exceed the amount of borrowing agreed with the Ministry of Finance for the respective year.

What communities will be able to raise money for

Municipal bonds are debt securities: investors provide funds to the community for a specified period, after which it must return the invested amount and income stipulated by the terms of the issue.

Unlike domestic government bonds, where the borrower is the state, the issuer of municipal bonds is a local self-government body.

Such an instrument allows attracting significant resources from several investors at once for projects that are difficult to fully finance within one budget year.

Funds may be directed, in particular, to construction and modernization of roads and transport infrastructure, water pipelines, housing and heating networks, as well as to creating own electricity generation and energy storage systems.

Lviv is already being considered as one of the potential pilot sites for applying the new mechanism. The NSSMC also held consultations on municipal bonds with communities of Ivano-Frankivsk region.

Number of potential investors is growing

The development of such an instrument is also facilitated by the increase in the number of private investors in Ukraine. As of August 1, 2026, there were 271.3 thousand of them - almost 12 times more than at the beginning of 2022. Since the beginning of this year alone, the number of investors has increased by another 43.3 thousand.

At the same time, municipal bonds will have to compete for investors' funds with domestic government bonds. Government securities, in particular, have tax advantages for individuals and are traditionally considered more attractive to banks in terms of risk.

The NSSMC has identified the development of municipal bonds as one of the priorities of the Ukrainian capital market for 2026-2027.