Funding, experience of others, resources and challenges – the EBA discusses the issues of rebuilding Ukraine
Yesterday, the European Business Association (as part of the Recovery Committee) held an event to discuss how Ukrainian communities and regions can ensure sustainable recovery in today’s conditions.
The meeting was attended by Olena Shuliak, Head of the Verkhovna Rada Committee on State Governance and Local Self-Government. She emphasized the importance of state policy for the sustainable recovery of regions. Analyzing the economic potential of communities is crucial, as it affects the speed of their reconstruction and future development. Equally important for communities are demographic issues and human capital. Olena also highlighted the importance of demining programs, noting that every community needs to understand the time and resources required to ensure a safe environment.
Olena Shuliak pointed out that another significant challenge for communities is construction waste, which continues to accumulate after new attacks by the occupiers. She also expressed hope that Ukraine will soon develop a Circular Economy Strategy.
In conclusion, Shuliak emphasized the importance of developing Comprehensive Recovery Programs in each community, taking into account all problems, potential, and future visions for recovery and development. Business plays a key role in this process and should be an active participant in the comprehensive recovery of Ukraine.
Olha Balytska, Co-Chair of the EBA Reconstruction Committee and Head of Practice at PWC, focused on the reconstruction experiences of other countries and cities after military conflicts and the lessons Ukraine could learn. The discussion covered five countries. In Iraq, for example, one of the key issues was that reconstruction occurred without fully understanding the needs (one focus was on restoring energy infrastructure, but some facilities were not connected, and efficiency sometimes reached only 30-40% of their real capacity). Moreover, the country spent relatively little on actually building the institutional capacity of government bodies. The main lesson for Ukraine is the importance of synergy between donor projects, central and local authorities, and business—how to implement the right projects with the right outcomes.
Next was Croatia. The positive outcome of reconstruction there was Croatia’s membership in the EU. Additionally, the social and cultural sectors grew. However, the mistake was viewing recovery primarily through the lens of physical infrastructure restoration, which happened quickly, but questions remained about the country’s capacity, economic potential, and the transparency of processes.
Bosnia and Herzegovina seemed to have the most negative reconstruction experience. One example of this was that while donors provided funds, the government was willing to cooperate with partners. However, when it came to reforming customs and tax authorities, there was resistance, and the government was much more willing to engage in dialogue about reconstruction projects.
Another case was the U.S. experience in the aftermath of Hurricane Katrina in 2005. At that time, the response to the situation was slow due to bureaucratic procedures. After this disaster, the authorities concluded that a comprehensive strategy was needed to address future catastrophes and rebuild afterward.
Japan is considered to have had the most successful recovery, funded with its own resources. Moreover, the country had a step-by-step reconstruction plan. However, there were also shortcomings—Japan did not focus enough on communication with communities and businesses, particularly small and medium-sized enterprises.
Analyzing these and other cases, it is evident that effective recovery requires increasing the state’s institutional capacity and involving efficient managers in reforms, targeted assistance to communities, direct engagement of businesses in synergy with communities, coordination of projects being implemented, moving from disaster response to a sustainable system, comprehensive recovery planning, transparency, and openness. A detailed presentation can be found via the provided link.
Vira Savchenko, Executive Director of BDO Ukraine and also Co-Chair of the EBA Recovery Committee, focused on sustainable municipal recovery and a survey of municipalities in the context of rebuilding. Around 200-300 communities were surveyed. 95% of communities expressed a need for additional training on working with grant projects (even if a donor is ready to provide funds). While 83% of communities write their own grants, 73% acknowledge that they still lack specialists in this area. Only 17% of communities have developed an integrated development strategy due to this low capacity, but nearly all understand the importance of the issue. At the same time, even among the communities that have recovery plans, only 11% include green initiatives in their plans. Therefore, a more effective solution could be improving mechanisms for business development in partnership with communities (e.g., enhancing the public-private partnership law, reducing bureaucracy, etc.). All survey results can be viewed here.
During the second panel, Ukrainian communities presented themselves, the investment attractiveness of their regions, demographic situations, challenges, and the state of their comprehensive recovery programs, as well as the problems they face in this process. Community presentations can be viewed via the links below:
Sustainable financing, infrastructure, and resources in the reconstruction process were also discussed.
Maryana Semenyshyn, Head of the “Development” team of the U-LEAD program, shared how U-LEAD is contributing to the recovery. The program strengthens the capacity of communities in preparing quality reconstruction projects. Currently, the program is working with 20 communities on 25 projects that should be ready for funding. As part of this support, U-LEAD finances the development of project documentation, helps develop application forms, and trains community staff to manage project preparation. U-LEAD focuses on small and medium-sized communities affected by Russia’s armed aggression. The 25 projects, ranging from €0.3 to €10 million, cover sectors such as education, healthcare, transportation, water supply and sewage, and waste management. Among the main problems communities and U-LEAD face when preparing projects are the complexity of justifying project feasibility, lengthy approval processes, and land allocation, as well as difficulties understanding and implementing the “build back better” principle. However, U-LEAD’s experience shows that such work is possible even for small communities if they have a team to prepare projects. She also confirmed that the U-LEAD program will continue to operate through 2025-2027. The presentation of the recovery project preparation initiative is also available via the link.
Viktor Nestulia, Head of the DREAM Project Office, shared the status of platform development. All Ministries, Regional Military Administrations, many communities, and other institutions and organizations are already working with DREAM. Each user receives continuous support from the team, both through individual Telegram chats, bots, ongoing training from the DREAM Academy, and from each other within the DREAM Community.
DREAM already integrates a lot of information related to recovery, including data from the Register of Property Damage, Prozorro procurement data, information from the State Treasury on payments, and the status of design documentation. Work is also underway to integrate with several other registries and databases, such as the National Health Service.
The system already helps allocate funds according to prioritization methods to ensure maximum efficiency in addressing community-level problems. Anyone can check any project that has applied for a subsidy and understand why it received specific funding and what the project’s priority is. Gradually, the system is creating more opportunities for communities to submit their projects for funding and manage them.
Currently, several donors are working with the system, selecting projects directly through DREAM. For example, UNICEF, the International Organization for Migration, and others. It is also possible to check where funds from other countries’ governments have been spent.
Additionally, there is a gradual transition to a single project pipeline. DREAM is currently helping collect investment project concepts that require funding, including from the state budget, for further consideration by the Strategic Investment Council.
The single project pipeline will also be important for entrepreneurs—to understand which priority projects are planned for funding from the state budget, community budgets, donors, etc.
Among the updates is an analytics module where one can see who is funding what, which projects have been funded, etc. Additionally, the map—map.dream.gov.ua—allows users to see what is happening with each project. There are also plans to implement a project sustainability module, which will consider CO2 emissions and other important sustainability aspects. Therefore, it is important for communities to understand the “build back better” principle and learn how to prepare appropriate projects.
There were also presentations from Saint-Gobain Ukraine, focusing on the importance of the green component in reconstruction projects, and VELUX Roof Windows, presenting a new living places concept.
We sincerely thank all speakers and participants for the meeting, meaningful discussions, and valuable insights!
The meeting recording can be viewed via the link.
