Odesa City Council Spent Billions on Loan Interest

In mid-November 2025, the head of Odesa MVA, Serhiy Lysak, initiated a review of the feasibility of early repayment of a UAH 623 million loan. An analysis of decisions published on the city's official website since 2007 showed that: Odesa systematically used loans.

In order to understand how Odesa got to the situation with the loan, the Center for Public Investigations analyzed the history of city borrowing.

This refers to a loan that was approved in August under an accelerated procedure by former Odesa Mayor Trukhanov. At the same time, Lysak explained that the city has sufficient cash balances, so there is virtually no need to borrow. In his opinion, refusing to take out a loan will save on interest and make more efficient use of the budget.

During Eduard Hurwitz 's tenure as mayor, the city council regularly approved new loans. In 2007, a credit line of up to UAH 335 million was approved, in 2008 - up to UAH 300 million, in 2009 - up to UAH 250 million, and in 2010 - up to another UAH 80 million. The total amount of borrowings reached UAH 995 million, which at the then exchange rate was about USD 136.5 million.

During the period of Oleksiy Kostusev' s tenure, no new loans were raised - the city only paid interest on existing debts. At the same time, due to the lack of explanatory notes to the 2010-2011 budgets, there is reason to believe that in late 2010 or 2011 Odesa violated the debt repayment schedule. This automatically limited the ability to take out new loans for five years. An additional signal of problems was the downgrade of Odesa's credit rating.

With the return of lending activity after the election of Gennadiy Trukhanov, borrowing volumes increased significantly. In 2016, the credit line limit reached UAH 10.6 billion. In 2017-2019, loans of up to one billion were approved annually. In 2020, the amount was reduced to UAH 500 million, and in 2021 it was increased again to UAH 1.2 billion.

In 2022-2024, the city did not attract new loans, but this was not due to a change in approaches, but to martial law. Due to the restrictions on spending, Odesa's accounts accumulated significant balances, which allowed it to allocate more than UAH 1 billion in 2022 for early debt repayment.

Despite this, in 2025 the city council approved a new loan of up to UAH 623.4 million. In total, during Trukhanov 's tenure, the council authorized loans worth UAH 5 billion 334 million, equivalent to about $190 million.

In total, from 2006 to 2025, the city's loan burden amounted to more than UAH 6.3 billion. The loans cost the city not only the amount of the loan but also the interest paid from the city budget over the years. In 2006-2010, Odesa paid UAH 144.5 million for debt service, and in 2011-2013, another UAH 88.3 million. Under Trukhanov' s leadership, the amount of interest exceeded UAH 1.49 billion.

In total, over almost two decades, the city has spent more than UAH 1.7 billion on interest. The only year without such expenses was 2024. An analysis of borrowing decisions shows that the loans were used mainly for typical capital expenditures.

Some decisions explicitly stated that the purpose of the loans was to repay previous debts. At the same time, no large-scale infrastructure project that would justify multibillion-dollar loans was recorded in the documents. This practice was aptly characterized by MP Olha Kvasnytska, who called the 2025 loan "a loan to patch holes, not development."

Thus, Odesa has been living on credit for years without changing its approach to financing. The result has been significant interest costs commensurate with the city's annual development budget.

Loans are not a negative in themselves. In modern financial practice, loans are used as a development tool. However, in the context of a full-scale war, when the country's economy is working at the limit of endurance, any debt burden must be justified to the last penny. When budgets at all levels are overloaded and external and internal risks are growing every day, taking out a loan at high interest rates becomes a direct financial burden for the coming years.

Анна Бальчінос