“We have three new programs with EU funds covering about 30 communities in Ukraine. They are aimed at restoring critical infrastructure, refurbishing housing and constructing new housing for internally displaced persons (IDPs). NEFCO is administering and implementing these programs,” NEFCO Chief Investment Advisor Julia Shevchuk said.
One of the programs is the repair and reconstruction of damaged critical infrastructure in Kyiv region. EUR 50 million of grant funds given by the European Union through NEFCO were provided for its implementation. The set of measures includes the restoration of infrastructure related to water supply, drainage and heat supply. The program will be implemented in 12 towns and urban-type settlements of Kyiv region: Borodianka, Borschahivka, Irpin, Dymerka, Ivankiv, Kalynivka, Nemishaeve, Piskivka, Slavutych and Velyka Dymerka territorial communities.
The second new program with funding from the European Union provides for the construction of housing for IDPs and the restoration of liberated cities in Ukraine.
According to Shevchuk, the program currently covers six cities – Chernivtsi, Dubno, Kovel, Lviv, Zhytomyr and Makarov.
Another program funded by the European Union concerns the repair of housing for IDPs, under this program NEFCO works in 10 cities in western Ukraine.
“The above two programs are at the procurement stage (https://www.nefco.int/procurements/), and the IDP housing repair program is at the construction stage,” Shevchuk said.
The projects that received support were selected based on the proposals from the Ministry of Communities and Territories Development of Ukraine. The final decision was 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. Cities are very active, now we receive three to five new requests from communities every week,” Shevchuk said.
The NEFCO requirements for housing projects relate to the introduction of energy efficiency measures in buildings, the need to use more environmentally friendly materials in accordance with European building standards.
The cities shall follow the procedure provided by the government of Ukraine for the distribution of social housing for population groups. Priority will be given to the groups most affected by the war. The program also contains a requirement that the housing built with its funding is not subject to privatization, that is, it 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 Russia’s aggression, many building materials production facilities have been destroyed. In addition, the male part of the population can be mobilized – this applies to both contractor personnel and municipalities. That is a weak point regarding the availability of human resources for our new programs. We also note the difficult financial condition of municipalities because as a result of a decrease in activity, tax revenues have decreased, and cities must contribute to the approved projects,” Shevchuk said.
In particular, in housing projects for IDPs, there is a condition that the community will ensure that the new house is connected to all necessary communications (water, heat, electricity). In addition, the community is responsible for equipping the shelter, without which the new house cannot be put into operation.
NEFCO procedures minimize the consequences of the difficulties of the Ukrainian market. “We are planning open tenders in which any company that is 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 the materials were from different countries. Now, most likely, we should expect more foreign materials, while Ukraine has destroyed its own production of, for example, windows and other materials. But we will see the realities after the tenders,” she said.
Some of the tenders have already started, some will be announced soon.
“We expect the completion of the first tenders by the summer. We really hope that most of the work on all three programs will begin this year,” Shevchuk said.
NEFCO is an international financial institution funding the expansion of Nordic green solutions in global markets. It was founded in 1990 by Denmark, Finland, Iceland, Norway and Sweden.