Restoration, reconstruction and modernization of facilities of subnational authorities of Ukraine, in particular local governments (Projects within the framework of the Ukraine Facility (Pillar 1)


Sector

Municipal infrastructure and services

Stream

Development and rehabilitation of municipal infrastructure of subnational governments

Entry into Portfolio

State level of SPP

Maturity level

58

General Information

Program Description

Program "Restoration, reconstruction and modernization of facilities of subnational authorities of Ukraine, in particular local self-government bodies" (Projects within the framework of the Ukraine Facility (Pillar 1)) was launched to implement the  Plan of Ukraine, approved by the Order of the Cabinet of Ministers of Ukraine dated March 18, 2024 No. 244-r, in accordance with the implementation of the European Union initiative “Ukraine Facility”, introduced by Regulation (EU) of the European Parliament and of the Council (EU) dated February 29, 2024 No. 2024/792. According to the report prepared by the Government of Ukraine, the World Bank, the EU, the UN  in cooperation with partners (RDNA4), the needs for the reconstruction of Ukraine reached $ 524 billion, including education - $ 9.6 billion, healthcare - $ 19.6 billion, social protection - $ 9.5 billion, culture and tourism - $ 29.3 billion. The urgency of the issue of reconstruction, reconstruction and modernization of facilities of subnational authorities of Ukraine, in particular local self-government bodies, is the need to ensure the continuous and effective operation of the state management system in the face of modern challenges, in particular the consequences of war, man-made destruction and security threats. The restoration of critical infrastructure allows not only to restore the functioning of authorities, but also to strengthen their resilience, digital capabilities and ability to respond to emergencies, which is key to the stability and development of the state. The destruction of schools, hospitals, kindergartens, social service institutions, critical infrastructure (water supply, sewage, heat, gas supply, etc.)  and other important facilities significantly complicates the population's access to basic services, which leads to a deterioration of the socio-economic situation, increased social tension and migration. This problem is especially acute in regions that have suffered significant losses as a result of hostilities or natural disasters. Infrastructure restoration — is not only the physical reconstruction of buildings, but and strategic investment in the future. This process helps restore citizens' trust in the state, stimulates economic activity, creates jobs, promotes social cohesion and the return of internally displaced persons. It is assumed that the IIPs that will be implemented within the framework of the program will introduce modern standards of energy efficiency, inclusiveness and accessibility that will meet the needs of all segments of the population.

Strategic Case

Program Goal

Main Goal: Improvement of infrastructure condition
Secondary Goal: Creation of new jobs through project implementation, Modernization to comply with current standards, Improvement of service quality, Reducing territorial or social disparities, Reconstruction of damaged/destroyed assets, Expanding access to goods and services
Problems: According to the report prepared by the Government of Ukraine, the World Bank, the EU, the UN in cooperation with partners (RDNA4), the needs for the reconstruction of Ukraine reached 524 billion dollars, including education - 9.6 billion dollars, healthcare - 19.6 billion dollars, social protection - 9.5 billion dollars, culture and tourism - 29.3 billion dollars. The urgency of the issue of the restoration, reconstruction and modernization of facilities of subnational authorities of Ukraine, in particular local self-government bodies, lies in the need to ensure the continuous and effective operation of the state management system in the face of modern challenges, in particular the consequences of war, man-made destruction and security threats. The restoration of critical infrastructure allows not only to restore the functioning of authorities, but also to strengthen their resilience, digital capabilities and ability to respond to emergencies, which is key to the stability and development of the state. The destruction of schools, hospitals, kindergartens, social service institutions, critical infrastructure (water supply, sewage, heat, gas supply, etc.) and other important facilities significantly complicates the population's access to basic services, which leads to a deterioration in the socio-economic situation, increased social tension and migration. This problem is especially acute in regions that have suffered significant losses as a result of hostilities or natural disasters. Infrastructure restoration is not only the physical reconstruction of buildings, but also a strategic investment in the future. This process helps restore citizens' trust in the state, stimulates economic activity, creates jobs, promotes social cohesion and the return of internally displaced persons. It is assumed that the IIPs to be implemented within the framework of the program will introduce modern standards of energy efficiency, inclusiveness and accessibility that will meet the needs of all segments of the population.

Strategic Relevance of the Program

Sector
Municipal infrastructure and services
Subsector
Development and Reconstruction of Subnational Infrastructure
Stream
Development and rehabilitation of municipal infrastructure of subnational governments
Strategic Document
State Strategy for Regional Development for 2021–2027
Task
Завдання 2 за напрямом “Стимулювання розвитку територій” Оперативної цілі 1. Забезпечення інтегрованого розвитку територій з урахуванням інтересів майбутніх поколінь Development and rehabilitation of municipal infrastructure of subnational governments

Program Objectives

Indicator
Baseline Value
Target Value

Number of communities in which facilities have been restored

0 units

880 units

Programme Sustainable Development Goals

Economic Case

Economic feasibility of the program

What are the main benefits expected from the implementation of the program for the economy, business, society, or individual industries?

Improving energy efficiency
Improving business conditions
Increasing employment levels, creating new jobs
Growth in production, market volumes of goods/services/investments
Reducing regional imbalances
Infrastructure development
Improving the quality of life of the population
Increase in budget revenues

Does the program objective provide for a contribution to the climate goal of mitigating the effects of climate change?

Reducing or avoiding greenhouse gas emissions
Reducing the use of fuel and energy resources

Does the program objective provide a contribution to the climate change adaptation objective: reducing the impact and/or reducing the vulnerability of an asset or population to one or more types of physical climate hazards?

No contribution is provided.

Does the programme objective provide for a contribution to the climate objective of sustainable use and protection of water and marine resources?

Increasing the efficiency of water resources use
Reducing the negative impact of urban and industrial wastewater discharges
Reducing drinking water pollution

Does the program objective provide for a contribution to the climate goal of transitioning to a circular economy?

Increasing the use of by-products and secondary raw materials, including by increasing the recyclability of products or waste
Reducing the content of hazardous substances and replacing substances of particular environmental concern in materials and products throughout their life cycle
Reducing the use of primary raw materials
Preventing or reducing waste generation

Does the programme objective provide for a contribution to the climate objective of pollution prevention and control?

Preventing or reducing emissions of pollutants into air, water or soil
Improving air, water or soil quality
Preventing or minimizing the negative impacts of the production, use or disposal of chemicals

Does the program objective provide for a contribution to the climate goal of protecting and restoring biodiversity and ecosystems?

No contribution is provided.

What social consequences are relevant for your program, after its implementation?

Enhancing public participation
Increasing employment levels
Improving living conditions
Improving access to basic services
Other social consequences
Reducing social inequality

Why is it advisable to implement projects in the format of one comprehensive program, and not separately?

Strengthening the overall impact through the interaction of individual projects within the program
Ability to simultaneously cover several interrelated aspects of a problem and ensure a systematic approach
Cost reduction through pooling of resources and centralized management
Implementing activities within a common or adjacent territory to achieve a more effective result
Ensuring coordinated planning, management and monitoring of projects within a single structure
The need to comply with legal requirements, government strategies or policies

How will the program help strengthen other economic processes or reforms?

Optimization of logistics or production chains
Promoting the development of related sectors of the economy
Support for the implementation of state or sectoral reforms
Stimulating digitalization and innovation

Program Components

Financial justification

Total estimated program cost

51'224'400'000 UAH

Estimated cost of program components

51'224'400'000 UAH

Component

Amount

Restoration, reconstruction and modernization of facilities of subnational authorities of Ukraine, in particular local self-government bodies

51'224'400'000 UAH

Cost justification

Short description

Justification document

n/a

1_Changes to the Plan of Ukraine (UA).pdf

Sources and mechanisms of financial support for the implementation of programs.

Status
Funding mechanisms
Coverage, %

Investment

Non-repayable financing. Direct budget financing. Direct expenditures from the state budget (public procurement).

100%

Justification document
To the documents
What potential funding sources can be mobilized on the basis of prior agreements or intentions to cooperate (if any)

The source of financing is the receipts to the general fund of the state budget within the framework of the Plan of Ukraine, approved by the order of the Cabinet of Ministers of Ukraine dated March 18, 2024 No. 244-r, in accordance with the implementation of the European Union initiative “Ukraine Facility”, introduced by Regulation (EU) of the European Parliament and of the Council (EU) dated February 29, 2024 No. 2024/792. The Plan of Ukraine provides that at least 20% (1.054 billion euros) of the non-repayable financial support within the framework of Component I of the Ukraine Facility was directed to the needs of the restoration, reconstruction and modernization of subnational authorities of Ukraine, in particular local governments. 1.054 billion euros within the framework of the “Ukraine Facility” calculated in hryvnia equivalent at the exchange rate of 48.6.

Management Case

Total program duration (months): 2

Approaches to project selection

Have approaches and criteria been defined for including public investment projects in the program, initiators of such projects, and their prioritization?

Yes

Organizational Measures

5. Program implementation (construction works)

17 months

4. Preparation for implementation (conducting tender procedures, obtaining permits, etc.)

2 months

1. Development of regulatory legal acts on prioritization of public investment projects that can be implemented at the expense of funds provided in the state budget for the Restoration, reconstruction and modernization of facilities of subnational authorities of Ukraine, in particular local self-government bodies, and the procedure for using such funds

2 months

6. Conducting audits and assessments

1 months

2. Selection of projects for the program

1 months

3. Development of a draft regulatory legal act on approval of the distribution of funds between local budgets/projects and activities (based on the results of project selection)

1 months

Risk Assessment

Risk

Probability

Degree

Strategy

Risk

Specific and discriminatory changes in legislation (tax, customs, etc.)

Probability

Low

Degree

Considerable

Strategy

Acceptance

Risk

Changing requirements for services/projects during the implementation of subprojects

Probability

Low

Degree

Minor

Strategy

Acceptance

Risk

Delay in receiving permit documents

Probability

Low

Degree

Considerable

Strategy

Avoidance

Risk

Exchange rate fluctuations

Probability

Medium

Degree

Considerable

Strategy

Acceptance

Risk

Lack of co-financing of local budgets

Probability

Medium

Degree

Critical

Strategy

Avoidance

Program Approval History

DateDecision NumberPortfolioProgram StatusDecisionReasonsMaturity level
15/08/2025SP-N-150825-3DA4E962State SPPreparationInclude--
01/10/2025SPP-N-011025-4BBFFB44State SPPPreparationInclude-58