EU and Nefco Initiative to Restore and Modernize Public Utilities in Ukraine's Northern and Southern Regions

Since Russia's full-scale invasion of Ukraine in February 2022, the country has faced a severe crisis with profound human and economic repercussions. In response, the European Union has launched a EUR 75 million grant-funded initiative, in collaboration with Nefco, to repair and modernize critical infrastructure in Ukraine.

The initial phase, funded with EUR 50 million from the EU and managed by Nefco, targets the reconstruction of essential municipal infrastructure in 12 communities in the Kyiv region. This phase focuses on water distribution, wastewater management, and heating infrastructure to ensure stable and reliable municipal services.

The second phase, currently in the procurement stage, allocates an additional EUR 25 million to new projects in five cities across the Chernihiv, Sumy, and Mykolaiv regions. This phase addresses both the direct and indirect impacts of the ongoing conflict, aiming to enhance municipal services and improve living conditions for residents and internally displaced persons (IDPs).

Key cities involved in this phase include:

• Chernihiv and Nizhyn in the Chernihiv region
• Okhtyrka and Trostianets in the Sumy region
• Pervomaisk in the Mykolaiv region

These cities have experienced significant damage and have received less support compared to other regions. The projects, expected to be completed by the end of 2026, will strengthen local energy security and the capacity to deliver municipal services.

The overarching goals of these initiatives are to:

• Provide reliable municipal services and improve living conditions for residents and IDPs.
• Enhance energy sustainability and efficiency.
• Strengthen the energy security of local communities.

Nefco's role includes offering technical guidance to Ukrainian municipalities to develop local green recovery plans. These efforts are projected to benefit over 200,000 people, leading to significant environmental and economic benefits.

Specifically, the projects aim to:

• Modernize and repair district heating, water, and wastewater systems.
• Achieve energy savings of approximately 1,000 MWh in electricity and 8,400 MWh in heat annually.
• Reduce CO2 emissions by around 2,200 tonnes each year.

Henrik Toremark, Senior Programme Manager at Nefco, highlights the larger budgets for the new projects in the second phase, which allow for comprehensive repairs and modernization of public utility systems. This holistic approach is expected to have a positive impact on the environment, residents, and IDPs.

By enhancing the energy efficiency of critical infrastructure, the initiative not only aims to increase resilience and cost savings but also to reduce greenhouse gas emissions and nutrient load to water bodies, contributing to a more sustainable recovery for Ukraine.

Photo attribution: Homoatrox, Svislač river and Minsk WWTP pipes 1, CC BY-SA 3.0