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Ukraine needs mortgage land bank – expert

The cost of a loan should not exceed 2.5% per annum.

Ukraine needs mortgage land bank – expert
Leonid Kozachenko
Photo: Max Levin

When implementing land reform, the government must take into account the proposals that have been developed by professional and public communities, the president of the Ukrainian Agrarian Confederation, Leonid Kozachenko, has said at the roundtable "Mechanisms for the introduction of farmland market in Ukraine" hosted by Gorshenin Institute.

In particular, we are talking about the creation of a mortgage land bank which will issue cheap loans to any business entity. "The cost of this loan should not exceed 2.5% per annum. Anyone will have access to this loan. It is absolutely realistic to create this instrument," he said.

Kozachenko noted that in order to create such a fund, it is necessary to attract foreign investors.

"Negotiations are being held with the world's top 10 largest mortgage banks to involve them, give them this tool to manage. Because many said that when a mortgage bank is created, there is no experience, money gets stolen, no-one knows how to manage second-tier financial instruments... So, we are finding the world's top 10 mortgage banks, we are negotiating with them and we are starting to transfer state land as mortgage (to this institution) and get a cheap resource that can be issued at 1% per annum," Kozachenko said.

He also considers it necessary to create two more funds for regional development through the transfer of state land to them. One of these funds should finance the construction of environment protection facilities.

"... There is enough land to make two more regional development funds: one of them is an environmental conservation fund. Ukraine is Europe's landfill No 1. We need to build more than a thousand enterprises, from the pyrolysis processing method to composting and gasification of waste, generation of heat and electricity. For this, we need at least $4bn. We are creating an environmental conservation fund for the regions at the expense of our state land, which is being transferred," Kozachenko said.

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