Nordic Environment Finance Corporation (NEFCO) implements three new programs with the EU funds in nearly 30 communities in Ukraine, NEFCO Chief Investment Advisor Yulia Shevchuk said in an interview to Interfax-Ukraine.
“We have three new programs with EU funds covering about 30 communities in Ukraine. They are aimed at restoring critical infrastructure, repairing housing and building new housing for internally displaced persons (IDPs). NEFCO administers and implements these programs,” she said.
One of the programs is the repair and reconstruction of damaged critical infrastructure in the Kiev region. For its implementation EUR50 million of grant funds allocated by the European Union through NEFCO has been directed. The package of measures provides for the restoration of infrastructure related to water supply, drainage and heating. The program will be implemented in 12 cities and towns of Kyiv region: Borodyanska, Borschagivska, Irpenska, Dymerska, Ivankivska, Kalynivska, Nemishayivska, Peskivska, Slavitutska, and Velikodimerska terns.
A second new program with funding from the European Union provides for the construction of housing for IDPs and the reconstruction of liberated towns in Ukraine.
According to Shevchuk, the program currently covers six cities – Chernivtsi, Dubno, Kovel, Lviv, Zhytomyr and Makarov.
Another EU-funded program concerns housing repairs for IDPs, with NEFCO working in 10 cities in western Ukraine under this program.
“The two aforementioned programs are in the procurement phase (https://www.nefco.int/procurements/), and the IDP housing repair program is in the construction phase,” Shevchuk reported.
The projects that received support were selected based on proposals from the Ministry of Community and Territory Development of Ukraine, with the final decision resting with the European Union.
“Together with the European Union, NEFCO began preliminary preparations for these programs in the spring of 2022. There were many more applications than could be included in the new programs. The cities are very active, we are now receiving three to five new applications every week,” Shevchuk said.
NEFCO’s requirements for residential projects include energy efficiency measures and the need to use more environmentally friendly materials in accordance with European building standards.
It is noted that the cities must follow the procedure stipulated by the Ukrainian government for the distribution of social housing for groups of people. Priority will be given to the most war-affected groups. The program also contains a requirement that the housing built for its financing is not subject to privatization, i.e. will be in municipal ownership.
The expert noted possible difficulties in the implementation of projects.
“There may be a shortage of local materials, because as a result of the aggression of Russia destroyed many of the production of building materials. In addition, the male part of the population can be mobilized – this applies to both the staff of contractors and municipalities. That is a weak point concerning the availability of human resources for our new programs. Also we state a difficult financial condition of the municipalities, because of the decrease in activity the tax revenues have decreased, and the cities have to contribute to the approved projects”, – said Shevchuk.
In particular, in the projects of housing for IDPs there is a condition that the community will ensure the connection of the new house to all necessary communications (water, heat, electricity), in addition, the community is responsible for the equipment of the shelter, without which the new house cannot be put into operation.
NEFCO’s procedures minimize the consequences of the complexities of the Ukrainian market. “We plan to have open tenders, in which any companies that are not under sanctions can participate. From previous experience, if we talk about construction, among the contractors – winners of tenders, as a rule, were Ukrainian companies, because local permits and licenses are needed, while materials were from different countries. Now, most likely, we should expect more foreign materials, while Ukraine has destroyed its own production of, say, windows and other materials. But we will see the reality after the tenders,” she said.
Some of the tenders have already begun, some will be announced in the near future.
“We expect the first tenders to be completed by summer. We very much hope that most of the work on all three programs will start this year,” Shevchuk said.
NEFCO is an international financial institution that finances the expansion of Nordic green solutions into global markets. It was founded in 1990 by Denmark, Finland, Iceland, Norway and Sweden. In Ukraine, projects have been implemented in more than municipalities.
