Ukraine introduces measures to support water utilities in times of war

Since the beginning of active hostilities on the territory of Ukraine, critical infrastructure facilities, including networks and capacities of water supply and wastewater treatment companies, have been continuously destroyed. The financial and economic condition of these utilities is currently highly vulnerable, and the state and local budgets lack necessary resources to support them.
According to the World Bank’s assessment, in 2021-2023, the amount of the damage to Ukraine’s centralized water supply and sewerage sector reached more than $11 billion. As of today, due to the hostilities, only 65 % of consumers in Ukraine have access to water supply services and 49 % to wastewater systems.

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Since the beginning of active hostilities on the territory of Ukraine, critical infrastructure facilities, including networks and capacities of water supply and wastewater treatment companies, have been continuously destroyed. The financial and economic condition of these utilities is currently highly vulnerable, and the state and local budgets lack necessary resources to support them.
According to the World Bank’s assessment, in 2021-2023, the amount of the damage to Ukraine’s centralized water supply and sewerage sector reached more than $11 billion. As of today, due to the hostilities, only 65 % of consumers in Ukraine have access to water supply services and 49 % to wastewater systems.

In the context of these events, one of the main ways to support utilities and provide consumers with water services was to receive humanitarian aid from donors. In this regard, on 21 August 2024, legislators adopted amendments to the Law of Ukraine ‘On Humanitarian Aid’, which provided the right to receive humanitarian aid from donors to water supply and sewerage companies.
The State Fund for Decarbonization and Energy Efficient Transformation also provides loans to utilities (primarily heat and water utilities) for implementation of energy efficiency measures, to increase the use of renewable energy sources and alternative fuels and reduce carbon emissions. The loan offers a preferential interest rate of up to 9 % per annum, which is reduced by 2 % if the project uses equipment from a Ukrainian manufacturer.

In the context of electricity outages caused by the constant shelling of Ukraine’s energy infrastructure, cogeneration units serve as an alternative source of electricity supply and, in combination with battery energy storage systems, allow for a certain period to provide electricity to the facilities. Utilities implement measures aimed at achieving energy independence and energy neutrality, including the installation of cogeneration units for combined heat and power generation.

Additionally, the Government of Ukraine supports enterprises in the energy and public utilities sectors by providing affordable loans at relatively low interest rates (under martial law). In particular, the Governmental Program ‘Affordable Loans 5-7-9%’ has been launched for water supply and sewerage companies, which provides utilities with the opportunity to use credit funds to purchase solar and wind power plants and equipment for electricity storage. As a result, utilities will be able not only to solve their own energy supply issues, but also to contribute to the development of small distributed generation. Since the beginning of 2024, entrepreneurs have already received around 12,000 loans amounting to around €1 billion under this program. A number of water utilities have taken advantage of the opportunities provided by the state, including by installing power plants and solar panels, and a number of cities are currently conducting tenders and signing contracts.