MYKOLAIV DRINKING WATER - UMIP

The sub-operation aims at provision of potable water to Mykolaiv City.

The sub-operation is focused on restoring Mykolaiv City's access to potable water after severe damage to its supply infrastructure caused by Russian military actions in 2022 and the destruction of the Kakhovka Dam in 2023. This effort falls under the Ukraine Municipal Infrastructure Programme (2011-0487), supported by a EUR 400 million framework loan signed in 2015. With the city left without a reliable source of safe drinking water, the sub-operation prioritizes emergency and efficiency measures to re-establish a centralized water supply in Mykolaiv, aiming to quickly resolve the ongoing crisis and meet the population's basic needs.

The operation targets investments in water supply and consists of a major allocation under a Framework Loan. By restoring potable water services, the project is fully in line with the main areas of EU support to Ukraine: "increase Ukraine's resilience and support reforms, humanitarian assistance, economic cooperation and access to the single market". The project is also aligned with the objectives for beyond 2020 in Eastern Partnership: particularly with the first priority on "investment in infrastructure, and with the third priority on transforming the region into fair and prosperous societies, with modern, resource-efficient, clean, circular and competitive economies,". The project is fully aligned with EU assistance to Ukraine in issues arising from the war.

The project addresses several market failures (water supply infrastructure gap, municipality lacks the financial capacity to finance these investments) by enabling the construction of the new water treatment plant and restoring access to safe drinking water supply services. It will generate significant positive externalities, including improved public health and avoided public healthcare costs, increased labor productivity, enhanced environmental protection and resilience to climate change (i.e. preservation of water resources and protecting surface and ground water quality) as well as considering non-quantified social benefits, including improving living conditions of the inhabitants in the service area and enabling socio-economic development as well as society-wide benefits, that the market alone would not deliver to the same extent without public intervention.

EIB additionality stems from i) timely provision of significant funding with a long maturity ii) mobilisation of technical assistance and investment grants and iii) a significant support by EIB to project monitoring and implementation.

The sub-project implementation will generate significant environmental and social benefits, including improved water quality, reduced pollution, and enhanced energy efficiency. Public health will improve through the elimination of contaminated water sources, and temporary employment will be created during construction.

The Promoter and the Final Beneficiaries are public authorities within the meaning of the EIB Guide to procurement (GtP). Thus, this is an operation in the public sector as per EIB GtP and the public procurement regime will be applicable to the project.