Project Associate, NPSA-7, DS - Kyiv, National position

Background

The district heating sector in Ukraine is in a critical condition at all stages of production, distribution and consumption of heat for space heating and hot water supply. The share of district heating in Ukraine steadily decreases. Over the past few years, it has fallen to 60%, although still about 11 million apartments are connected to the networks. About 35 large CHP plants, more than 200 industrial plants and more than 100,000 boiler houses provide for the needs of consumers of heat.

In response to these challenges, the European Investment Bank (EIB) has developed the Ukraine Energy Rescue Plan, which defines the strategic framework for EIB lending activities aimed at safeguarding energy security during wartime and ensuring the uninterrupted delivery of essential utilities and social services. Within this framework, the Ukraine District Heating Programme provides long-term financing to municipalities and communal utilities through Ukrainian financial intermediaries for investments in district heating modernization, energy efficiency improvements, and related infrastructure upgrades. The Programme focuses on enhancing system reliability, reducing technical losses, improving fuel efficiency, and strengthening the overall resilience of heat supply systems in line with European standards and Ukraine’s recovery priorities.

UNDP supports public authorities in Ukraine in advancing sustainable recovery and resilience across key sectors, including the district heating sector. This support is provided through capacity building, project development, advisory services, and training that help national and local institutions strengthen governance, prepare investment-ready projects, and align with international standards. 

Despite these efforts, there remains a substantial financing gap that constrains public authorities’ ability to modernize infrastructure and implement large-scale investments. While UNDP provides critical technical assistance and institutional support, it cannot on its own mobilize or cover the scale of financial resources required. 

Against this background, the European Investment Bank offers a vital complementary role by providing access to long-term financing for Ukraine’s public sector. By combining EIB’s financial resources with UNDP’s technical expertise and capacity support, the two institutions can jointly address the dual challenge of limited local capacity and constrained financing. 

Against this background, UNDP has developed and is implementing the Ukraine District Heating Programme Technical Assistance, financed by a financial contribution from the EIB. The project aims to strengthen the institutional capacity of Ukrainian public authorities and utilities, improve the quality and bankability of district heating investment projects, and facilitate effective access to sustainable finance. Through this integrated approach, the Pr...