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IBI-Rating upgrades investment attractiveness rating of Khmelnytskyi city territorial community

28.10.2021
National rating agency ІВІ-Rating informs on upgrading of investment attractiveness rating of Khmelnytskyi city territorial community (CTC) to invАА– grade.

Such rating grade reflects the excellent investment attractiveness.

Upgrading of investment attractiveness rating was due to changes in legislation aimed at strengthening the operational capacity of local governments in working with investors, and the activity of local authorities to create favorable conditions for entrepreneurship, investment climate and investment, which is confirmed by:

• receiving international awards for efforts in European integration, economic development, energy management and international cooperation;
• active participation in tenders for investment projects and positive experience in implementing projects with funds from foreign investors;
• availability of a web resource for investors "Khmelnytskyi Investment Portal" and constant promotion of advertising and image products;
• significant level of entrepreneurship development due to comprehensive support: low level of local taxes, information and consulting support, holding events to promote local producers within the strategy "Buy local (Khmelnytskyi)!";
• support for the introduction of innovations: an innovation and entrepreneurship support center has been established; Khmelnytskyi IT Cluster and a coworking center operate in the city, interest rates on loans raised for investment and innovation projects are reimbursed from the city budget; financial support is provided on a competitive basis to implement innovative business ideas;
• works on development of industrial park are carried out;
• active development of modern infrastructure for the provision of administrative services in Khmelnytskyi CTC creates conditions for fast and free business registration, obtaining permits for construction work and other services;
• local authorities continue to work on improving energy efficiency.

Were taken into account:
1. Socio-economic development and budget support of the community
Khmelnytskyi CTC has a diversified economy, the basis of which is trade and processing industry. The community is characterized by the active entrepreneurship development. As of July 1, 2021, 13.5 thousand enterprises - legal entities and more than 24 thousand persons-entrepreneurs are registered in the community. Revenues to the community budget from small businesses in 2020 amounted to 52.8% of the local budget's own revenues. A number of indicators of socio-economic development are higher than in Ukraine as a whole, in particular: the volume of housing commissioning per 1 inhabitant, retail turnover per 1 inhabitant, the share of the working population. According to the results of 6 months of 2021, the volume of industrial products sales amounted to UAH 9.1 billion, which is 41.3% more than according to the results of the same period in 2020. The foreign trade turnover of goods amounted to USD 266.03 million, which is 43% more than in the same period of 2020, but the balance of foreign trade in goods remains negative.

Khmelnytskyi CTC is well provided with its own revenues - their weight in the total budget revenues in 2020 amounted to 78.50% (against 63.44% in the budget revenues of Khmelnytskyi in 2019). The amount of own revenues of the community budget for 2020 per capita is higher than in Ukraine as a whole (UAH 7.6 thousand in Khmelnytskyi CTC against UAH 7.5 thousand in Ukraine).

The current balance of the local budget in 2020 amounted to UAH 34.2 million, in the first half of 2021 - UAH 12.5 million. Direct debt credit burden is low - the amount of direct debt on loans as of 01.07.2021 is equal to 1.17% of the own revenues of community budget for 2020.

2. Natural and geographical potential and availability of material base for business development

Competitive advantage for business development in Khmelnytskyi CTC is territorial proximity to promising foreign markets and good transport links (the city is located at the intersection of two European highways and a route of general national importance, has a developed railway transport system).

The community has a developed business infrastructure: free production, trade, office space and land that can be used for business development, work on creating an industrial park is underway, programs are being implemented to improve energy efficiency.

3. Community business environment and investment policy of local authorities
The community is characterized by the transparency of the city authorities and the quality of communication with potential investors. There is experience in the successful implementation of investment projects, including ones with the involvement of foreign resources. Local authorities are actively developing new investment projects and submitting them to participate in tenders for funding. The information content of the Khmelnytskyi Investment Portal resource is constantly supported.

An effective industrial and investment policy is being pursued - it aimed at the development of small business, the introduction of innovations and the expansion of international cooperation. In particular, there is an Entrepreneurship Support Center, which provides entrepreneurs with information and advisory services; iHUB Innovation and Entrepreneurship Support Center was founded. The Business Support Center within the framework of the EU4Business Initiative operates on the basis of the public organization "Public Movement "New Economic Policy", which helps entrepreneurs to develop and enter the European market. The activities of the Center are financed by the European Bank for Reconstruction and Development and the European Commission. There is a public association "Khmelnytskyi IT Cluster" and a coworking center. Entrepreneurs are provided with financial support by partial reimbursement from the budget of interest rates on loans raised for the implementation of investment and innovation projects. Innovative business ideas are financed on a competitive basis.

On the city council official website, a section "For business" has been created, one of the divisions of which is "Support for Entrepreneurship". On the open data portal of the city council, registers of vacant premises and land plots are published. The "Resident's Cabinet" has prepared the possibility of providing electronic services for business, provided in the Central Control Center, and ensured a quick transition to state electronic services. Work is underway to create and maintain an information and consulting resource for business.

In 2020, as a part of the strategy for promoting the brand "Buy local (Khmelnytskyi)!" completed the development of a multifunctional web portal to popularize local producers. There are pages "Buy local (Khmelnytskyi)!" on instagram and facebook. A large-scale promotion of local products is being carried out by labeling local products in retail chains.

In order to conduct the analytical research the materials obtained from Khmelnytskyi City Council have been used, including: indicators of the social and economic development, statistical data, treasury statements, program materials, other necessary internal information, as well as the information from the public sources, which the Rating agency considers credible.

Municipal department
For more information please contact:
Press service of IBI-Rating
(044) 362-90-84
press(at)ibi.com.ua