The town of Ungheni is borrowing 10 million lei to fix its roads — but not from a bank, in the usual way. The town is issuing municipal bonds: debt securities that anyone can buy — ordinary people or companies — and the money raised this way is paid back over time, with interest, from the local budget. Mayor Vitalie Vrabie presented the issue planned for 2026 at a dedicated national event, held in Chișinău on 1 July.
It is the first time Ungheni has turned to the capital market to finance itself. And at 10 million lei, the town becomes — from the publicly known figures — the largest municipal issuer in Moldova after the capital.
What a municipal bond actually is
A municipal bond is, in short, a loan split into small pieces. Instead of taking a single loan from a bank, the city hall issues securities of a certain value and sells them to investors. They put up the money now, and the town repays it later, paying interest periodically and, at maturity, the original amount. The difference from a classic loan is who provides the money: not a bank, but many buyers — including, in principle, residents of the town.
The procedure is regulated and passes through several filters. According to VictoriaBank’s explanatory material — the bank with which Ungheni City Hall signed the financial services contract on 12 May — a municipal bond issue requires an opinion from the Ministry of Finance on debt sustainability, a public offer prospectus approved by the National Commission for Financial Markets (CNPF), subscription through a professional intermediary, and registration of holders with the Central Securities Depository. Repayment is guaranteed by the city hall’s future revenues.
Not the first town, but among the largest issues
The instrument is not entirely new to Moldova. The first municipal bonds were issued in August 2021 by the town of Sîngera and the municipality of Ceadîr-Lunga, and the list of issuers has grown gradually since — Ceadîr-Lunga has reached a third issue, and Costești and Sireți have issued as well. Ungheni thus joins a club that already numbers around eight localities.
What sets it apart is the size. At 10 million lei, Ungheni’s issue exceeds those of Leova (9 million) and Ceadîr-Lunga’s third (8 million), also this year, and remains the largest of any town outside the capital. The only larger municipal issue so far was Chișinău’s, of 65 million lei, in 2022.
The Chișinău event, where the municipalities of Ceadîr-Lunga, Leova and Ungheni presented their 2026 issues, was organised by the Expert-Grup think tank, as part of a project supported by the Embassy of the Kingdom of the Netherlands. National Bank first deputy governor Petru Rotaru called municipal bonds an instrument with “low costs, transparent allocation and efficient monitoring of resources,” while Expert-Grup executive director Adrian Lupușor described them as an increasingly important means of financing local infrastructure.
Where the 10 million goes
The purpose of the money is set out in a decision of the Ungheni Municipal Council of 15 May. It approves a list of local roads to be modernised in 2026 — among them Burebista, Națională, Mihai Viteazu, A. Plămădeală, Arcașii lui Ștefan cel Mare and C. Stamati streets, Decebal lane, as well as the pavement on Ștefan cel Mare, already under construction. One of the document’s limits remains the same one we flagged when we wrote about the pavement on Ștefan cel Mare: the decision publishes only the total ceiling of 10 million, not how much each street costs.
Through municipal bonds, we invest today in the sustainable development of tomorrow’s Ungheni. Vitalie Vrabie, Mayor of Ungheni
Who pays and what the risks are
Borrowed money is not free: the interest and the principal are repaid from the local budget — that is, ultimately, from the contribution of the people of Ungheni. The 10 million represents around 4–5% of the municipality’s budget, which in 2025 had some 184 million lei of approved revenue and over 230 million executed. The law on local public finances caps a city hall’s annual debt service at 20% of budget revenue — a threshold that Ungheni’s issue comfortably falls under, and that is exactly what the Ministry of Finance opinion checks.
The instrument has its less comfortable side, too. Moldova’s secondary securities market is underdeveloped, so an investor who wanted to get their money back before maturity cannot always do so easily. The buyer base is narrow, and the loan remains, in the end, a debt that weighs on future budgets. On the other hand, the experience so far is encouraging: the first issues, in 2021, were fully subscribed within a few days and repaid on time.
What it means for an Ungheni resident
Beyond the streets that will be repaired, the issue also opens a direct possibility: residents can become the creditors of their own town. According to the economic press, Ungheni’s bonds are expected to carry an interest rate of up to 10% a year and a three-year maturity — on an investment of 10,000 lei, that would mean about 1,000 lei a year, more than a bank deposit. The exact terms — the interest rate, the subscription calendar, the value of a single bond — will be confirmed only in the public offer prospectus that the CNPF must approve.