Infrastructural and energy efficiency projects are a priority. The key challenge is the absence of strategic agenda of their implementation.

In 2015 the process of territorial communities merge envisaged by the framework of the local authorities and regional organization of territories reform was initiated. During 2 years 366 territorial communities were created.  

In 2015 the funding of local budgets increased by 42 compared to 2014: from 70,2 billion UAH to 99.8 billion UAH. In 2016 local budgets revenues increased by 49% having reached 146,6 billion UAH. Decentralization improves the financial state and living conditions of regional communities. At the same time, it’s worth mentioning that some communities only fake reforms while others are actively increasing budget revenues and cut redundant expenses. 

Villages and cities differ in terms of infrastructure, the density of population and level of economic development. Nevertheless for both types of locations addressing infrastructural challenges remains the priority. While in cities the main emphasis is put on boosting public transport’s efficiency and profitability, in village communities efforts are majorly directed towards the establishment of permanent transport connection and reconstruction of roads. 

Energy efficiency is a common concern both for urban and rural communities. Additionally to the traditional decrease of resources consumption which is promoted in cities, village communities also have to ensure its population access to affordable electricity and solid fuel. That’s why alternative energy sources projects, notably those related to biorefinery are very popular in rural communities. Nevertheless, such projects are still majorly implemented by large-scale agricultural companies in few localities.

Cities have better financial resilience and more opportunities to encourage international investors and donors to participate in the implementation of ambitious projects. For instance, Kyiv, Odessa, Dnipro, Lviv, and Vinnitsa are already benefiting from or are in process of attracting EBRD funds for implementation of the automated public transport management systems. Village communities have far more restricted opportunities. Nevertheless, they can apply for one of donor programs:  

DOBRE initiative is accessible in Dnipropetrovsk, Ivano-Frankivsk, Kharkiv, Kherson, Kirovograd, Mykolaiv and Ternopil regions. The period of project implementation is 5 years, a total budget which will be divided among 75 territorial communities is 50 million USD.  

DESPRO (“Support of Decentralization in Ukraine”)is a joint Swiss-Ukrainian project, funded by the Swiss Confederation and implemented under the supervision of the Swiss Center for Resource and Consultation on Development (Skat). The budget of the project which is currently in its third, final stage of implementation, is 9,3 million CHF. Main programs implemented within the project are related to water supply and infrastructure, as well as management of household waste. 

Globino community in Poltava region reached 4-time increase of its budget (up to 83 million UAH) having initiated 63 infrastructural projects. Though, it’s also worth mentioning that local budget is fueled by allocations from «Astarta» holding – the largest agro-processing and bioenergetics holding in the region, as well as from a number of other large enterprises.  

In Berezivska village community in Sumy region, an energy efficiency project was initiated, which will ensure substantial decrease of expenses in the nearest future. The implementation of this project started with the installation of solar panels for electricity generation in remote villages. Within the framework of the project implementation the equipment for ambulance stations was purchased, the renovation of community center and water supply facilities reconstruction were performed.  

Another example of the transition to responsible and effective energy resources consumption may be found in Rukshinska community in Chernivtsi region. Solar panels installed on the roof of local school will enable to cut electricity expenses by 500 000 UAH starting from the next year. This project will pay off just in one year. Kindergartens, schools, stadium, bridge and ambulance station were also reconstructed.  

Pishanska territorial community in Poltava region managed to increase budget revenues by 600%. The obtained funds were allocated for reconstruction of roads, roof repairs, as well as the installation of windows and new heating systems in schools. Over 30 project with a total budget of 10,5 million UAH were already implemented within the community.  

Unfortunately sometimes populism prevails  

Having increased budget revenues local communities start implementing projects aimed at improvement of social infrastructure. Nevertheless, sometimes budget planning can be quite unreasonable.  

For example, Kiptiv territorial community in Chernihiv region grants 20 000 UAH to parents of newborn children. Administration representatives claim that in such way they improve the birth rate. Nevertheless, the practice of many countries demonstrates that social benefits may prevent poverty but they will not improve the overall quality of life. This is the “fish or fishing rod” sort of issue. Populists will always opt for fish distribution.  

After the decrease of budget subsidies for infrastructural projects, the difference between villages’ budget revenues and expenditures will shrink. Next year budgets of territorial communities may face a substantial shortage of funding compared with this year. Thus, the priority is to invest budget funds smartly in those projects which will be beneficial for future generations. It means that local administrations have to start drafting strategic agenda of projects implementation already now and take into account existing advantages and challenges of particular communities.