Denmark and Nefco support new municipal projects to further strengthen essential services in Ukraine’s Mykolaiv region

At the Ukraine Recovery Conference in Gdansk, Poland, Nefco and Ukrainian municipalities, signed a series of new grant agreements to support the rehabilitation of essential municipal infrastructure related to energy efficiency, water supply, and wastewater management. The projects will be grant financed by Denmark through the Ministry of Foreign Affairs and Impact Fund Denmark. The communities will in addition provide own financing from respectively city budgets for the project implementations.

These new projects cover investments across several cities in the Mykolaiv region, including the City of Mykolaiv, and focus on energy-efficient rehabilitation of public hospitals and schools, water supply, and improved wastewater treatment. The aim is to make the cities livable by restoring vital municipal services in these communities and to strengthen their capacity to continue delivering reliable services for citizens while upgrading critical infrastructure to meet modern environmental standards and withstand ongoing disruptions.

Across the region, years of underinvestment and war damage to infrastructure and long-standing system inefficiencies have made it difficult to ensure consistent access to clean water supply, healthcare and other basic services for the Ukrainian’s living in these communities. At the same time, untreated wastewater continues to pose environmental challenges and public health risks.

These Danish-financed investments will support the communities to:

• restore access to critical services such as healthcare, education and clean water supply
• improve reliability of key municipal services under conditions of instability and power shortages
• reduce discharges and decrease environmental pressure on Inhul and Pivdennyi Buh rivers and ecosystems
• strengthen municipalities’ capacity to operate and maintain a resilient infrastructure in extremely challenging conditions

 

Bo Nyhus, Investment Director at Nefco:
“These projects respond to very concrete needs in the Mykolaiv region: access to clean water, functioning wastewater treatment systems and reliable public services. By combining restoration with modern, energy-efficient solutions, we are helping municipalities rebuild essential services to support the communities to address urgent needs now and to become more sustainable over time.”

Part of Denmark’s long-term support to Mykolaiv region

These new projects form part of Denmark’s continued support to Ukraine, with a strong geographical focus on the Mykolaiv region.

Through Nefco, Danish funding targets key sectors essential for daily life and recovery, including:

• water supply and sanitation
• energy supply and heating systems
• public buildings such as hospitals, schools, and municipal service facilities

The support contributes to strengthening local resilience while promoting environmentally sustainable solutions and aiming at alignment with EU standards, in close collaboration with Danish partners, Nefco, and the Ukrainian communities.

Elsebeth Søndergaard Krone, Denmark’s State Secretary for Development Policy at the Ministry of Foreign Affairs of Denmark:
“Denmark is committed to supporting Ukraine’s recovery in a way that strengthens both resilience and sustainability. These projects help ensure that communities can rely on functioning infrastructure while laying the groundwork for a long-term green recovery.”

 

Six new projects restoring essential infrastructure

The projects signed at the Ukraine Recovery Conference address urgent infrastructure gaps across municipalities in the Mykolaiv region, where infrastructure systems are outdated or partially non-functional. Many of the investments also include energy-efficiency measures and backup power solutions to ensure reliable service continuity. In total these new projects include EUR 26.6 million in grant financing from the Ministry of Foreign Affairs of Denmark and EUR 3 million in grant financing from Impact Fund Denmark.

Annemette Ditlevsen, Managing Director and Co-Head of Public Infrastructure Finance at Impact Fund Denmark:
“By supporting concrete investments at municipal level, we contribute to solutions that are both modern and scalable. These projects demonstrate how targeted support can translate into lasting improvements for Ukrainian communities.”

• Bashtanka: Construction of a wastewater treatment plant alongside improvements to the water network, enhancing sanitary conditions and reducing pollution. Grant funding EUR 5.5 million from MFA Denmark, total project value approx. EUR 6 million.
  
  
• Novyi Buh: Development of a new wastewater treatment system to get the wastewater treatment plant operational and eliminate long-standing environmental challenge with untreated discharges. No functioning wastewater treatment plant has been operating in the community for several decades. Grant funding EUR 5.5 million from MFA Denmark, total project value EUR 6.6 million.
  
  
• Nova Odesa: Re-establishing continuous water supply with improved water quality and reduced losses, ensuring reliable daily access to clean water and supporting sustainable usage of groundwater. Grant funding approx. EUR 4.5 million from MFA Denmark, total project value approx. EUR 5 million.
  
  

• Pervomaisk: Rehabilitation of a maternity hospital with energy-efficiency upgrades, backup energy storage and shelter facilities, enabling reliable healthcare services. Grant funding of approx. EUR 5.6 million from MFA Denmark, total project value EUR 6.2 million.
• Voznesensk: Energy-efficiency modernisation of a public hospital and school, improving quality of services and ensuring more stable energy supply for patients and schoolchildren. Grant funding EUR 5.5 million from MFA Denmark, total project value approx. EUR 6 million.

• Mykolaiv: Investments in municipal services, including sustainable and reduced energy supply for public transport and comprehensive energy-efficiency upgrades of a preschool, improving services for vulnerable groups in the community. Fully grant financed with approx. EUR 3 million from Impact Fund Denmark.

Furthermore, a Memorandum of Understanding has been signed between Nefco and the Mykolaiv Regional State Military Administration, establishing a framework for cooperation to support green, resilient, and sustainable recovery and development of the Mykolaiv region through jointly developed projects and knowledge exchange.

Together, the projects will have a significant environmental impact by reducing eutrophication in water bodies across the Mykolaiv region, while also delivering substantial health benefits to citizens by providing clean drinking water to almost 6,000 people. Project implementation is expected to run from 2026 to 2029.

By restoring core infrastructure and integrating more efficient, modern, and sustainable solutions, the projects will help ensure that recovery efforts translate into tangible improvements for the Ukrainian people in their everyday life while strengthening institutional capacity and supporting a long-term green transition in the communities.

For further information, please contact: 

Bo Nyhus, Investment Director, Nefco

bo.nyhus@nefco.int, +358 10 6180 665

Iryna Fedorenko, Programme Manager, Nefco

iryna.fedorenko@nefco.int, +358 50 400 53 82

Lia Oker-Blom, Communications Manager, Nefco

lia.oker-blom@nefco.int, +358 10 6180 671

Janina Graae, Journalist in the Office for Public Diplomacy, Media and Communications, Ministry of Foreign Affairs of Denmark,
jangra@um.dk

Annemette Ditlevsen, Managing Director and Co-Head of Public Infrastructure Finance, Impact Fund Denmark
amd@ifu.dk, +45 41 38 12 41

 

About Nefco Green Recovery Programme for Ukraine

Nefco’s Green Recovery Programme for Ukraine supports the rebuilding of critical infrastructure and the development of sustainable, resilient municipal systems across the country. The first part of the programme, which is fully grant funded, brings together over EUR 500 million in financing from the European Union and the Nordic countries. It currently supports more than 50 projects across 35 communities in Ukraine. Since 2022, over 40 projects have been completed, with investments focusing on energy efficiency, renewable energy, heating, water, waste and other essential municipal services. The programme combines grant financing with technical assistance and capacity building to ensure lasting impact at the local level. Read more on: www.greenrecoveryukraine.org

 

About Ministry of Foreign Affairs of Denmark

The Ministry of Foreign Affairs of Denmark is responsible for Denmark’s foreign, development and trade policy. Through Denmark’s development cooperation, Danida, the Ministry supports sustainable development, resilience and economic growth, working with partners around the world to address global challenges and promote lasting progress. Read more on: udenrigsministeriet.dk

About Impact Fund Denmark

 

Impact Fund Denmark is Denmark’s development finance institution and impact investor. Through strategic investments, loans, guarantees and partnerships, it mobilises capital to support sustainable growth and address global challenges in developing countries and emerging markets. Impact Fund Denmark works to create lasting social, environmental and economic impact while contributing to the UN Sustainable Development Goals. Read more on: impactfund.dk