REGIONAL CONFERENCE

On financing municipal development

What is the current status of negotiations on Croatian accession to the European Union and the Strategy and Coordination of EU funds?
The Fiscal decentralization and regulatory reform - Lessons learned in the region, was the main topic discussed by the mayors of Zagreb, Ljubljana, Budapest, Vienna and Prime Minister of Sarajevo Canton.  Regional Conference on Financing Municipal Development - Municipal Development Arena 2011, organized by Infoarena Group and co-organized by the European Bank for Reconstruction and Development (EBRD), was held on 22nd November, 2011, at the Regent Esplanade Hotel in Zagreb, under high patronage and participation of the President of the Republic of Croatia Dr. Ivo Josipović as well as by participation of H. E. Mr. Juha Ottman, the Ambassador of the Republic of Finland.

 

 

Co-organizer of the conference EBRD, has so far financed 537 projects in Croatian, Serbia, Bosnia and Herzegovina, Albania, Macedonia and Montenegro, having invested nearly 8 billion euros in projects related to municipal infrastructure and services, and the sustainable delivery of municipal services. Zsuzsanna Hargitai, the Regional Director of the EBRD was talking about an investment that financially supports projects worth 18.7 billion euros.

 

Municipal bonds

 

In addition to the investments of EBRD, bonds are one of the main ways of financing municipal development in the future. From financial standpoint, the meaning of municipal bonds is that investors by buying bonds lend money to local community, who agrees to repay the principal along with the corresponding interest depending on the time of issuing the bonds. A local authority shall issue such bonds in order to obtain additional financial resources for financing local needs.

 

 

Finnish Ambassador Juha Ottman

 

Municipal bonds are debt securities issued by local governments, or cities, counties, municipalities or other local government units. To increase the attractiveness of such bonds there is usually the offer of a range of benefits, and there are many forms of such bonds that offer special investment opportunities. Experience in many countries has shown that this instrument has wide applicability and many cities in Croatia like Split, Koprivnica, Zadar and Rijeka has released their municipal bonds.

 

Nokia Siemens Networks was general partner of the conference and a leading global manufacturer of telecommunications solutions and services, was presented at the conference by Nives Sandri, Board Member. Strongly focused to innovation and to the environmental and energy efficiency, Nokia Siemens Networks provides customers in 150 countries around the world with a complete portfolio of mobile, fixed and converged network technology, as well as professional services. Nokia Siemens Networks is active in Croatia since 2008 as one of the leading suppliers in the area of infrastructure and business solutions for mobile and fixed networks. In cooperation with operators, regulators and local innovative companies, Nokia Siemens Networks aims to introduce the most advanced technologies that will contribute to the development of local communities and sustainable development of society as a whole.

 

On Strategy and Coordination of EU funds

 

Suppliers of utility infrastructure services were talking about investment in this area and how to improve services for citizens and companies. Josip Šajnović, Head of the Department of Communications Networks, HAKOM (Croatian Post and Electronic Communications Agency) will talk about national experiences, and the experience from the EU will share with us Ms. Seija Sihvonen, Vice President of the biggest technological research organization in Northern Europe, VTT Technical Research Center of Finland.

Experts for the stated topic were presenting the current status of negotiations on Croatian accession to the European Union and the Strategy and Coordination of EU funds.
Mobilization of strategic operational capital and expertise - Public-Private Partnerships was discussed by Kamilo Vrana, Director of Croatian Agency for Public Private Partnership, Branimir Delić, Board Member of the Zagreb's Holding company and other experts.

One of the speakers, Mr. Tomislav Čorak, partner in A.T. Kearney's global Government, stated that entering in EU will bring more possibilities to use EU funds. ˝So far, Croatia wasn't successful in asking and obtaining financing from available EU funds, mostly for not preparing projects right or not preparing them at all. He compared projects with lottery tickets: ˝You can't win lottery without having a ticket.˝

 

 

Tomislav Čorak

 

Mr. Corak explained: ˝
˝Development of a strategy to manage and run a city uses classic tools for company management. One first needs to look at the situation city faces; what are economic trends (e.g. closing of industrial sites due to economic crises) socially critical areas (e.g. culture and education) and demographic trends (aging population, change in educational levels etc.) After looking at the overall situation a particular city faces, one should start formulating a strategy and vision for the city. Strategy should then be turned into action plans broken down by projects with clear goals and owners. After that individual projects should be consolidated into a master plan that will be used to define the budget, based on best practices. The advantages of project level planning are clearly defined goals and detailed practical implementation plan. All of that assures that city management implements adopted plans with higher likelihood of success and secures rapport with local community as well as new mandate on next local elections.˝