INFRASTRUCTURE BONDS IN PROJECT FINANCING: WORLD EXPERIENCE AND OPPORTUNITIES TO UKRAINE

Abstract

There are many types of financial instruments used to finance infrastructure projects. In the world practice for the implementation of large-scale and capital-intensive projects for several decades actively used the mechanism of project financing with the use of various forms of borrowing, which are provided by income generated by the cash flows of the project. The focus is now on instruments that allow for financing, reducing risks and providing investors with certain incentives to attract investment. There is a great practice in the world space of application of different methods, ways and tools allowing solving such issue. In different countries, the use of financing forms through debt securities and this financing has own peculiarity and certain differences in each individual country. These features have determined by the specifics of the municipal promissory notes and corporate borrowing, as well as the system of state regulation. In particular, the issues concern the determination of interest rates, tax preferences, government support. The need to adapt the existing foreign experience in the Ukrainian reality is due to the fact that the existing system of local borrowing is not adequate to modern requirements, and infrastructure bonds are not used in Ukraine at all. Therefore, the purpose of this article is to study foreign experience of using infrastructure bonds in project financing, generalize it and find solutions to adapt this experience in Ukraine. In this context, the benefits of project finance have identified and these main objectives have defined. The mechanism of project financing has substantiated taking into account the use of debt instruments through the disclosure of their essence, purpose and application features. The current practice of issuing infrastructure bonds in countries such as the USA, India, Australia and Chile have analyzed. Based on the analysis, foreign experience is summarized and the characteristics of the mechanism for financing projects through the use of municipal and corporate infrastructure bonds have determined. The main directions of adaptation of foreign experience in Ukraine have proposed.