As part of implementing the Ukraine Reconstruction Service, a new project of WEI’s Center for Strategic Studies, we are monitoring the economic and social situation in eight regions of Western Ukraine on an ongoing basis. In particular, we are interested in investment needs, announced tenders for reconstruction and modernization of public and private infrastructure, and examples of Polish-Ukrainian economic cooperation. Stay tuned for updates on the rebuilding and modernization of Western Ukraine.
The WEI Center for Strategic Studies organized the first seminars promoting the participation of Polish companies in rebuilding Ukraine. On July 17 in Lviv and July 18 in Lutsk, meetings were held on the development of Ukrainian-Polish cooperation, the participation of Polish companies in the reconstruction and modernization of Ukraine, and available support instruments created by Polish public institutions. Each meeting was attended by 100 people representing Ukrainian local authorities, Ukrainian and Polish entrepreneurs interested in cooperation, and representatives of Polish institutions supporting Polish investments in Ukraine. Minister Jadwiga Emilewicz discussed the legal solutions being prepared in Poland regarding insurance for foreign investments and export credits.
Ukrainian local governments have begun work on investment promotion programs (Vinnitsa) and a regional development strategy (Lutsk). The Vinnitsa city investment development program for 2024-2026 is being developed in cooperation between city authorities and local business associations. Promotion of local business, support for relocating companies to Vinnitsa, job creation for intra-Ukrainian war refugees, and energy efficiency have been identified as priorities. The development strategy being created for the city of Lutsk will be based on the participation of representatives of local social and business organizations.
An exciting element of modernization in the agricultural and processing industry is the self-organization of dairy farms in the Lviv region. In July, a dairy processing plant was opened in the Zluchow region, belonging to a cooperative association of more than 100 small and medium-sized dairy farms. The total investment is 95 million hryvnias (10.5 million zlotys), most of which was donated by SOCODEVI, a Canadian cooperative organization. The plant will produce a wide range of dairy products: milk, cheese, butter, and yogurt, targeting the local Lviv market.
Turkish companies are showing great interest in participating in the reconstruction and modernization of the food and construction industries. A delegation made another visit to the Lviv region of Turkish entrepreneurs interested in investing in building material factories and storage spaces. A Turkish business association, the TURKSID delegation also met with local and municipal authorities and entrepreneurs in Ternopil.
The German government’s GIZ agency, which supports international economic development and works with businesses, civil society actors, and research institutions, is also very active in western Ukraine. In Vinnitsa and Lutsk, GIZ has supported local authorities with a grant of 800,000 euros each to create city technology parks and coworking spaces for local businesses. In Vinnytsia, the grant will make the “Krystal” technology park, including industrial facilities and a center for supporting start-ups newly created or relocating to Vinnytsia. In Lutsk, the grant will be used to adapt a municipal building donated by the authorities to create shared office space for local entrepreneurs and an exhibition and conference center. In Ivano-Frankivsk, GIZ is funding a city government project to promote the establishment of international cooperation by local entrepreneurs, expand markets, overcome barriers to export activity, and restore the export capacity of Ukrainian companies lost as a result of the war effort. In Chervonohrad (Lviv region), GIZ will support the creation of an Industrial Park to preserve jobs after the decommissioned Velikhostivska coal mine. The implementation of the project includes bringing European gauge railroad tracks to the Industrial Park from the Polish border in order to increase the attractiveness and competitiveness of the Park.
The Austrian company MTA Messtechnik, which specializes in developing comprehensive solutions for water supply and sewerage systems, has made an offer to create monitoring of the city’s water supply system in the town of Rivne, reducing water losses due to damage. At the same time, it was also proposed to create a cooperation program between Austrian and Ukrainian universities in water resources and water supply management.
After a year-and-a-half hiatus due to the Russian invasion, the Vinnitsaapobutim utility chemical factory resumed production in Vinnytsia. The factory has twelve production lines producing about 100 products, including washing powders, liquid detergents, laundry and cleaning agents, and cosmetic products. The plant currently employs 100 workers, but there are plans to increase employment to 300 from the end of this year. Before the Russian aggression, the Vinnytsia plant covered almost 10 percent of the Ukrainian market’s needs for household chemical products.
An international tender has been announced in Lutsk to reconstruct the wastewater treatment plant serving the city. Local utility Luckwodokanal intends to select a general contractor for the investment with European experience in modernizing such infrastructure facilities. The tender will run until September 6 of this year, and the design and reconstruction process is expected to begin in 2024 and last up to 42 months. The contractor is expected to guarantee the operation of the wastewater treatment system for up to 30 years.
Numerous local governments are currently issuing tenders for the repair of roads and road infrastructure (Volyn, Rivne, and Ternopil regions), the purchase of firefighting equipment (Volyn and Rivne regions), and the modernization of educational infrastructure (construction of a shelter at the High School in Kovel).
The current military situation and the concentration of military operations in eastern Ukraine means that the economic crisis in the western part of the country is slowly beginning to stabilize. Plants previously closed or significantly reduced their activity are starting their exercise after a break of almost a year and a half. We also see a trend toward relocating industrial production from eastern and central Ukraine to these areas. Such activities are supported by local governments. In the tendering policy of local authorities, it is noteworthy that, in addition to work related to the reconstruction of damage or the construction of military or defense infrastructure, tenders have begun to be issued for the construction and modernization of civil infrastructure, resulting from long-term development plans. It should also be noted that the German development agency GIZ, which supports local infrastructure projects with its grants, is very active in the western regions of Ukraine.
We invite you to read the detailed information and analysis material of the Reconstruction of Ukraine Service on the project website odbudowaukrainy.org.pl