Twelve communities in the Kyiv region are conducting technical design and procurement of contractor services for critical infrastructure rehabilitation projects supported by the European Union and Nordic Environment Finance Corporation (NEFCO).
“In December 2022, the European Union and NEFCO announced cooperation to reconstruct and repair critical municipal infrastructure in Ukraine. Currently, the first activities are underway in all 12 communities: technical design and procurement of contractor services by the communities with the support of NEFCO. Several tenders are under evaluation, and the first construction work is expected to begin soon,” NEFCO said in a Tuesday news release.
According to the report, EUR50 million has been allocated for the reconstruction program. The funds are allocated to restore and repair infrastructure in the Kyiv region’s heavily war-affected communities: Borodyanka, Borshchagivka, Dymere, Dmytrivka, Gostomel, Irpen, Ivankiv, Kalynivka, Nemeshayiv, Peskivka, Slovutych and Velyka Dymerka.
The works include repair and modernization of heating systems, wastewater treatment systems, and repair of water supply systems. It is expected that 245 thousand Ukrainians will feel the effect of the projects.
“We have already started preparatory work in all the selected communities and aim not only to repair, but also to improve municipal service delivery systems and introduce more energy-efficient and environmentally friendly solutions. Construction work on the first projects is in the early stages,” NEFCO Senior Advisor and Program Coordinator Ronnie Nilsson was quoted as saying in a press release.
In addition to NEFCO, the organization’s partners, CES-Clean Energy Solutions together with iC Consulenten, and the Urban Technology Alliance (UTA) are providing technical assistance for the projects to the municipalities.
NEFCO is an international financial institution which finances the expansion of Nordic green solutions into world markets. It was founded in 1990 by Denmark, Finland, Iceland, Norway and Sweden. In Ukraine, projects have been implemented in over 100 municipalities.
NEFCO currently manages five other EU-funded programs in Ukraine, in addition to a critical infrastructure rehabilitation project. They concern the modernization of water supply systems, the introduction of energy efficiency measures in public buildings and street lighting networks, and the construction, repair, and reconstruction of public buildings to house internally displaced persons.
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.
Denmark, through Nordic Environment Finance Corporation (NEFCO), has directed about EUR4.5 million in additional financing, securing the delivery of new mobile containerized boilers to Ukraine, the NEFCO press service said.
“Denmark and Ukraine are very close partners, and it is good to see that our partnership can also provide support for critical heating infrastructure in eastern Ukraine. Supporting the operation of the heat supply system is critical to the sustainability and combat effectiveness of the country. In addition, it also has a positive impact on reducing CO2 emissions in Ukraine”, – Danish Ambassador to Ukraine Ole Egberg Mikkelsen was quoted as saying.
In particular, according to him, the transferred 20 gas boilers with the capacity of 39 MW will provide central heating to more than 180 thousand people, which is 80% of the total population of the city where they will be installed. About 10% of the Ukrainians receiving assistance are internally displaced persons. The funded project will be able to provide about 30-40% of the needs of citizens in heating (the locality is not named for security reasons – IF).
Activities include installation of new boilers, laying of new pipes, preventive steps to prevent freezing of heating systems in winter and maintenance of systems to ensure their reliable continuous operation.
The new boilers will ensure more efficient heat production, consequently reducing gas consumption by some 1.70 million cubic meters per year. This will result in an annual CO2 reduction of almost 3,400 tons.
“We are very pleased to be able to continue our cooperation with the Danish Sustainable Infrastructure Finance Program Danida (DSIF) in this and other projects in Ukraine to support and green critical infrastructure. The importance of this support from Denmark cannot be underestimated and is much needed in these difficult times,” commented Nefco Investment Director Bo Nyhus.
Since 2021, NEFCO has been managing grant funds for the Danish DSIF funding program, which is funded by the Danish Ministry of Foreign Affairs. Currently, three projects are ongoing despite the war. The goal is to create new projects and quickly rebuild infrastructure in the best quality over the next few years.
NEFCO is an international financial institution which finances the expansion of Nordic green solutions on world markets. It was founded in 1990 by Denmark, Finland, Iceland, Norway and Sweden.
DSIF’s funding program is a tool within the Danish development cooperation Danida, funded by the Danish Ministry of Foreign Affairs. DSIF offers subsidized loans for sustainable infrastructure projects without access to commercial financing in 24 developing countries. DSIF is administered by the Investment Fund for Developing Countries (IFU), based in Copenhagen, Denmark.
NEFCO (Nordic Environment Finance Corporation) has 117 projects in Ukraine for an estimated amount of EUR 180 million, on which agreements have been signed and which are under implementation.
“As of June 7, NEFCO has 117 projects, on which agreements have been signed and which are under implementation in Ukraine, and the total investment in these projects is approximately EUR 180 million,” the corporation said in response to Interfax-Ukraine’s request.
Of these projects, agreements for seven new projects were signed in 2021. The total amount of investments for them is about EUR 4 million.
In addition to them, many other projects are in development and at the preparatory stage, the corporation said.
At the same time, NEFCO said that, having decided to abandon investments in new projects in the renewable energy sector in 2020, the organization, to support the sustainable development of Ukraine, will continue developing and financing municipal projects in such sectors as energy efficiency, district heating and wastewater treatment.
“Special attention is paid to small and medium-sized projects, as well as those that are examples of how to respond to technological advances. Financing projects in the municipal sector in Eastern Europe is one of the three main directions of NEFCO’s strategy for the next five years,” the corporation said.
At the same time, NEFCO also drew attention to the fact that the decision to stop financing projects in the renewable energy sector “is based solely on the fact that agreements on feed-in tariffs are not being implemented.”
At the same time, they called the initiative to introduce an excise tax on electricity from renewable energy sources as erroneous, pointing out that in fact clean energy should be subsidized, and fossil resources should be taxed with CO2 emission tax.
The Nordic Environment Finance Corporation (NEFCO) last year provided 12 loans to 11 cities of Ukraine for a total amount of EUR 15.54 million and UAH 60.71 million, eight of which were allocated in the last days of the year, the Ministry of Finance has said on its website.
Kremenchuk (Poltava region) received the largest loans – a EUR 6 million 10-year loan at the rate of EURIBOR 6M + 6.25%, as well as a UAH 13 million five-year loan at 3%.
It is followed by Rivne with EUR4.43 million for eight years at the rate of EURIBOR 6M + 5.85%.
In addition, Lutsk and Sumy at the end of the year received EUR 1.6 million and EUR 1.5 million for 10 years at a rate of 6%, Horishni Plavni received EUR 0.512 million for 10 years at 3%, and Lubny (both in Poltava region) got EUR 1 million at 3%.
NEFCO provided another foreign currency loan to Mykolaiv in July last year – EUR0.5 million for seven years at 6%, while the remaining loans were in hryvnias for five years at a rate of 3%.
In particular, Chuhuyiv (Kharkiv region) received UAH 10.23 million, Zolochiv (Lviv region) – UAH 9.9 million, Vasylkiv – UAH 14.08 million and Brovary (both in Kyiv region) – UAH 13.5 million.
These projects provide a small amount of grant support and co-financing from the municipal authorities.
NEFCO is an international financial organization created in 1990 by the countries of Northern Europe. Its activities are related to the financing of practical activities that promote “green” growth.
According to NEFCO at the beginning of December 2020, the corporation in Ukraine has about 200 projects worth a total of EUR 231 million (both grants and loans, including completed and current projects). Among these projects, 60 were signed with private companies, 138 in the public sector and six were signed with Ukrainian banks.
The Nordic Environment Finance Corporation (NEFCO) will provide Ukrainian municipalities with loan financing of EUR 12 million to modernize water supply facilities, increase their energy efficiency and for wastewater treatment.
NEFCO and the European Union representative office in Ukraine announced the launch of an appropriate program to modernize the water supply system in Ukraine as part of the Neighborhood Investment Platform (NIP) on January 15.
As part of this program, NEFCO issued EUR 12 million for lending to Ukrainian local authorities. The EU contribution is EUR 5 million in grant assistance, and Sweden will provide technical assistance of up to EUR 1.5 million through the Swedish International Development Cooperation Agency (Sida).
As expected, water supply companies will finance part of the projects at their own expense.
“The water sector in Ukraine is in need of major investments to modernize the system, as little has been done after the collapse of the Soviet Union in the early 1990s. Tariffs do not cover the costs, and water utility companies, over 80% of them owned by municipalities, have found it hard to cope with the investments required. As a result, the performance of many of the utilities has become inefficient due to deteriorated infrastructure. A large part of the pipeline networks, pumps and water treatment and purification plants are worn out or do not meet the necessary standards,” NEFCO said on its website.
NEFCO is an international financial organization created in 1990 by the countries of Northern Europe. Its activities are related to financing practical activities that promote “green” growth.
