INTERNATIONAL EXPERIENCE IN PROVIDING FINANCIAL SUPPORT FOR LOCAL INVESTMENT PROJECTS
The article underlines the prospect of studying international experience in the context of decentralization processes in Ukraine. Local authorities and self-governments solve problems of development of industrial and social infrastructure, expansion and modernization of means of production in the conditions of severe scarcity of financial resources. The purpose of the article is to summarize the European experience of financial support for local investment projects, in particular, energy efficiency of housing and communal services.
The experience of European countries on the financial support of local investment projects is explored. In the Western literature on financial planning, the importance of cash flow analysis is essential. The development of a cash flow model is performed using the following tools of discounted cash flow analysis, net present value (NPV), internal rate of return (IRR). Financial modelling is a key part of all projects. Drawing attention to strategically important calculations is one of the main tasks in the implementation process.
The basic approaches to risk management during the implementation of infrastructure projects are analyzed. Depending on the amount of information available, the risk can be assessed qualitatively or quantitatively. Quantitative risk analysis is performed to calculate risks in terms of cost and impact of time. Qualitative analysis is carried out on risks that have been prioritized for quality risk analysis and have a significant impact on the project. Public-private partnership agreements often do not fully take into account the interests of the financial sector. This limits the ability to attract funds from private investors, including international financial institutions, to local projects.
The types of budget financing of local programs are separately identified in the form of project subsidies, government guarantees and targeted investment tax benefits. The main forms of project finance loan can be an investment bank loan, targeted bond loans, equipment leasing and commercial project loan.
The experience of the Eastern European countries on the financial support of energy efficiency projects for housing and communal services is considered. The centres of energy efficiency centres or networks should become institutes for financial modelling of projects in Ukraine, according to the experience of Eastern European countries. Universities may be the starting points for such centres. Developing alternative models of energy-saving technologies or tariffs can be an information product and an example of creating a competitive environment in the housing and utilities system.
Limited possibilities of the state budget in the context of rising external debt, deterioration of the level and quality of life of citizens, increasing the complexity of business activities require the need for further theoretical alternatives using the experience of other countries, taking into account their own experience and achieving social consensus.
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