We have long experience lending directly to municipalities in Eastern Europe, often as the first external lender. As an international finance institution, we are comfortable with the risk level of lending to medium-sized and small municipalities. For the cities in most need, we can offer various types of funding, including grants, soft loans and grants in addition to loans. We can also provide technical assistance for feasibility studies and project implementation support to our municipal borrowers through engagement of experienced consultants.

Who can apply?

Municipalities and utility companies

Where and how?

Medium-sized projects in Eastern Europe

  • In Armenia, Georgia, Moldova, and Ukraine
  • Loans in EUR up to 5 million
  • Can be blended with dedicated grant funding
  • Provision of technical assistance

More about medium-sized projects >

Small energy-saving projects in Eastern Europe

  • In Armenia, Moldova and Ukraine
  • Loans in local currency, on favourable terms, up to the equivalent of 500,000 EUR

More about small energy-saving projects >

Green Recovery actions in Ukraine

For municipalities to build back greener and better with programme-specific eligibility criteria. Read more and contact Nefco for further information.

Scope of project

Environmental projects to improve energy security and help countries reach their emission targets, typically:

  • energy efficiency in public buildings
  • street lighting
  • district heating
  • water and wastewater
  • solid waste management

Risk assessment

  • Large loans in EUR on relevant market terms
  • Small loans in local currency on favourable terms are meant for the first or second loan of small municipalities
  • Utility company loans must be guaranteed by the local municipality

How we work

As an international financial institution, we have a range of policies and guidelines that will help you understand how we work both internally and with our partners and customers. Read more about our policies and guidelines.

We welcome project proposals, which aim to generate positive environmental or climate-related results. Read more about our environmental criteria and guidelines.

Projects should also contribute to the global sustainable development goals.


We blend our own loan funds with grant financing provided by a range of donors through us to leverage and make projects feasible and bankable.

In addition to dedicated funds provided by the Nordic governments and the Nordic Council of Ministers, we are also an accredited implementing agency for the EU, E5P,  the Northern Dimension Environmental Partnership (Northern Dimension Environmental Partnership is a result-focused initiative responding to calls from the international community for concerted action to tackle the most pressing environmental problems in the Northern Dimension Area (around the Baltic and Arctic seas, and North-West Russia). For environmental projects, NDEP grants complement loans provided by IFIs and these in turn can leverage further local and international funding.NDEP) and the Green Climate Fund (Green Climate Fund, an operating entity of the financial mechanism of UNFCCC to support projects, programmes and policies and other activities in developing country Parties.GCF). By blending funds to implement scalable projects, we help our financiers and customers to reach their environmental and sustainability goals.


Nefco has its own Procurement Guidelines and Recommended Tender Documents that are applied to projects financed by Nefco. Read more about procurement here.

How to apply

Contact Nefco for further information:

  • For local currency loans: Julia Shevchuk or Aliona Fomenco
  • For large projects: our Investment Managers