The State Land Bank is considering the possibility of issuing bonds, the collateral for which will be future revenues from the sublease of state lands. The development of a new financial instrument was announced by the Head of the State Property Fund of Ukraine, Dmytro Natalukha. According to him, the stability and predictability of lease payments make such securities a reliable asset for investors.
Today, the state owns hundreds of thousands of hectares of land, which are transferred for long-term sublease through a transparent auction system. Since the term of such contracts is 14 years or more, the state has a guaranteed income for the long term.
At current market rates of about 20,000 hryvnias per hectare per year, the total annual income from the land bank could reach 16 billion hryvnias.
“The state owns hundreds of thousands of hectares. They are partially or fully transferred to long-term sublease after a transparent auction process. We have an idea how to tie these thousands of hectares to financial instruments such as government bonds,” Dmytro Natalukha noted.
The bond issuance mechanism will allow the state to scale these revenues and raise funds quickly, without waiting for annual payments for decades. This creates an additional resource for the implementation of state programs today, using the potential of land resources as a financial lever.
“So far, the details are not for the press,” summarized the Head of the State Property Fund of Ukraine, refusing to specify specific areas of use of the attracted capital.
The introduction of such instruments indicates a transition to more complex methods of managing state assets. The successful implementation of the initiative could become a precedent for using other natural and infrastructure resources of Ukraine as a base for issuing highly liquid government securities.
