Infrastructure Financing and Currency Risk Management for Municipalities in Ukraine

4 December 2019
EBRD Offices
46-46A, Antonovycha Street, Kiev

Municipal governments have received greater responsibilities in managing their finances. At the same time, an improving macroeconomic outlook and financial innovation have opened up new opportunities to finance infrastructure investments, such as for transport or energy efficiency. The conference brings together municipal decision makers and finance experts to discuss new concepts and instruments, while raising awareness to currency risk and the need to denominate more debt in hryvnia.

Municipal representatives to this conference include delegates from Kiev, Zhytomyr, Chernihiv, Zaporizhzhia, Kharkiv, Kryvyi Rig, Kropyvnytskyi, Odesa, Ivano-Frankivsk, Sumy and Vinnytsia.

Program
08:30 – 09:00Registration and coffee
09:00 – 09:10Introduction: New financing opportunities for municipal infrastructure – Brice Ropion, COO TCX
09:10 – 09:30Keynote speech – Yuriy Heletiy, Deputy Minister of Finance
09:30 – 10:30Panel discussion: Challenges in financing municipal infrastructure – the Mayors’ perspective.
Yuriy Butsa, Government Commissioner for Public Debt Management, moderates a panel of four Mayors, discussing the capacity of the municipalities to prepare projects, negotiate with IFIs and manage currency risk.
10:30 – 10:45Coffee break
10:45 – 12:00Panel discussion: How to expand local-currency financing for municipal infrastructure in Ukraine?
Harald Hirschhofer, Senior Advisor, TCX, moderates a panel of finance experts:
– Jean-Erik de Zagon, EIB Resident Representative for Ukraine
– Jason Brett Pellmar, IFC Resident Representative for Ukraine
– Amund Beitnes, Senior Investment Manager, NEFCO
– Oleksandr Isniuk, Director of Corporate and Transaction Banking, Ukrgasbank
The panel will discuss the positive developments in the government bond market and how this improves access to finance for municipal infrastructure. Innovative financing instruments and special programs will target rapid improvements of infrastructure in selected areas, including clean urban transport, water and sanitation, renewable energy, and improving energy efficiency of public buildings.
12:00 – 13:00Buffet lunch
13:00 – 13:45Panel discussion: Financing on the municipal bond market.
Ruslan Kilmukhametov, Head of Debt Capital Markets at ICU Asset Management, facilitates a panel which will look at the current status of the municipal bond market from multiple perspectives, in order to generate some insight into its possible development paths. The panelists represent different stakeholders, in order to discuss opportunities and obstacles in light of the more positive domestic regulatory environment:
– Konstantin Lykhytsky, Head of Treasury Insurance company ARX
– Oleg Kyrychenko, Head of the Investment and Share Capital Department of Ukrgasbank
– Maxim Libanov, Commissioner of the Ukrainian SEC
– Representative of Kharkiv city, TBC (Kharkiv issued local bonds in 2019)
– Representative of Lviv city, TBC (Lviv issued local bonds in 2018)
13:45 – 14:30Panel dicussion: Capacity building priorities at municipal treasuries.
Marco Sorge, IFC Principal Investment Officer, in charge of the Cities Program in ECA and Ukraine, leads a panel of experts discussing capacity building at municipal treasuries.
14:30 – 14:45Coffee break
14:45 – 16:00Panel discussion: The role of donors.
Christoph Kuhn, Director of Mandate Management, EIB, moderates a panel which will discuss how donors and the Government can scale up sustainable finance flows to Ukraine, while putting in place the right incentives to ensure high investment efficiency and the promotion of best international practices. The panel will consist of:
– Michelle Stone, IMF, Head of Public Finance Mission to Ukraine
– Timur Khromaev, Head of the National Security and Stock Market Commission
– Simone Raudino, EU Delegation, Sector Manager
16:00 – 16:15Wrap-up and next steps – Mark Magaletsky, EBRD Associate Director, Department Head, Ukraine SI
Contacts
  • EBRD: Grant Metcalfe-Smith, Director and Head of Client Solutions, EBRD Treasury Department, MetcalfG@ebrd.com
  • TCX: Harald Hirschhofer, Senior Advisor, h.hirschhofer@tcxfund.com, +31610286939
Biographies – in order of appearance

Brice Ropion is COO of TCX and joined the Fund in 2010. He is responsible for all non-commercial activities, including risk, compliance, back-office operations, legal, IT, HR, financial administration, accounting, audit, and reporting. Prior to joining TIM, he built a 20-year career at ABN AMRO Bank, including 12 years in commercial functions in the bank’s international division, and 8 years in portfolio and credit risk management for financial institution and public sector clients. He holds a Master in International Affairs from George Washington University and a Bachelor in Economics and Political Science from Cornell University.

Yuriy Heletiy graduated from Ivan Franko L’viv National University in 2001. He studied at the Faculty of international relations and obtained a diploma in international economic relationships and qualification of an interpreter. In 2002 he obtained one more degree at the Faculty of law – an expert in law. In 2013 Mr. Heletiy gained the Master of Science degree in economics at the Institute of Regional Research of the National Academy of Science of Ukraine. In 2002 Mr. Heletiy completed the course “European economics, integration and law” at the faculty of law, business and economics of Bayreuth University (Germany). After graduating Mr. Heletiy worked for the National bank of Ukraine from 2003 to 2015, where he overcame the steps from 1st category economist to the head of the unit in the banking supervision. From October 2015 to July 2018 Yuriy Heletiy worked at the position of Financial Policy Department Director of Ministry of Finance of Ukraine. In July 2018 the Cabinet of the Ministers of Ukraine appointed Mr. Heletiy as a Deputy Minister of Finance of Ukraine and on December 5th, 2018 as a Deputy Minister of Finance of Ukraine for European Integration.

Yuriy Butsa studied economy at the National University “Kyiv Mohyla Academy” where he obtained his bachelor degree (2005) as well at the Central-European University in Budapest where he received his master degree in 2008. Having finished his studies at Kyiv Mohyla Academy, Mr. Butsa started to work at the State Commission for Securities and Stock Market. In 2010, Yuriy Butsa was engaged as a coordinator at the Coordination Center for Economic Reforms where he was involved in the elaboration of legislation aimed to improve corporate governance at joint stock companies, to introduce new instruments on the financial market as well as to improve the operations of the banking sector and to improve the business climate. In 2015, Yuriy Butsa joined National Securities and Stock Market Commission. In May 2016, Yuriy Butsa was designated the Deputy Minister of Finance for European Integration. In 2019, Yuriy Butsa was appointed to the position of Government Commissioner for Public Debt Management.

Harald Hirschhofer is Senior Advisor at TCX. A trained macro-economist, he joined TCX at its beginning in 2008 to implement a macro-fundamental based pricing approach for currency hedging in small frontier markets. Today, he works on scaling up the development impact of TCX and on new strategic initiatives. Over the past years, a large part of his efforts has been dedicated to developing local currency financing solutions for renewable energy and other infrastructure investments in frontier and emerging markets. From 1994 to 2008, Harald worked at the IMF. Before that, he worked at the US House of Representatives in Washington and a London investment bank.

Jason Pellmar is based in Kyiv and leads the IFC’s investment and advisory operations in Ukraine, Belarus and Moldova effective since June 2017. He is responsible for managing a significant investment program – over USD 3 billion of long-term finance in Ukraine and approx. USD 300 million in Belarus and USD 200 in Moldova as well as an extensive advisory program focused on improving the business environment, expanding access to finance, promoting a green economy, modernizing supply chains and opening new markets. From 2014 to 2017, Mr. Pellmar was responsible for new business development in the infrastructure, agribusiness, manufacturing and services sectors in Myanmar, Southeast Asia. Previously, he was based in Istanbul, Turkey, where he led several landmark infrastructure transactions in Europe, Middle East and North Africa region. He holds a Masters Degree in International Finance and Russian & Eurasian Studies from Johns Hopkins, School of Advanced International Studies (SAIS) and was a Fulbright Scholar in St. Petersburg, Russia.

Amund Beitnes is Senior Investment Manager at NEFCO (Nordic Environment Finance Corporation). Amund has been working for over 10 years with private and public sector investments, with a focus on Ukraine for the last five years. Through the Energy Credits Facility, NEFCO is the only IFI offering local currency financing to municipalities. It is a revolving fund offering loans in local currency financing on concessional terms, where the main target group is small and medium-sized municipalities with no prior experience in lending.

Ruslan Kilmukhametov is Head of Debt Capital Markets at ICU Asset Management. Ruslan is in charge of debt origination and covers financial institutions. He has led bond issues for clients such as VTB, Prominvest bank (VEB), Credit Agricole, Pravex-bank (Intesa SanPaolo), ProCredit Bank, IMC Holding and Donetsksteel. Prior to joining ICU, Ruslan worked for UkrSibbank BNP Paribas Group as Head of Corporate Finance and was in charge of debt origination and corporate finance.

Marco Sorge is Principal Investment Officer at IFC in Vienna and heads the IFC municipal infrastructure team in Europe, Middle East and North Africa. His team helps leading cities in the region to develop and finance urban transport, water and other urban infrastructure investments with no need for sovereign guarantees. Marco’s team is responsible for selection of eligible investments, structuring and execution. In Turkey, Marco and team have lent over EUR300 million for urban transport and water projects in three cities. Recently, the team has moved to Vienna and diversified its focus of operations across Ukraine, Morocco and the Balkans. Marco is a financial economist by background and holds a PhD in economics from Stanford University.