10.07.2025 | News
At the eve of the fourth annual Ukraine Recovery Conference (URC) in Rome, Nefco announced three key financing agreements with Lviv related to the modernisation of their wastewater treatment infrastructure. These projects make a real difference in Ukraine and will directly benefit Lviv’s over 900,000 residents by securing local energy production and increasing wastewater treatment capacity and reliability. They will also decrease nutrient pollution into the Baltic Sea.
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The city of Lviv in Western Ukraine, now home to a significant number of internally displaced persons, faces challenges in the form of excess effluent flowing into the Poltva River due to outdated wastewater infrastructure. This significantly contributes to nutrient pollution in the Baltic Sea. To address this and build local energy resilience, a major modernisation of Lviv’s wastewater treatment plant is underway, backed by loans and grants from multiple actors, including Denmark, Sweden, financial institutions and multilateral funds. During the URC week, new contributions from Denmark and Sweden were agreed upon with the utility company Lvivvodokanal.
The modernisation is being implemented in two phases:
- The construction of one of Ukraine’s first large-scale biogas facilities for renewable electricity generation to both the wastewater plant and the city; it will also reduce sludge volume and harmful emissions; this phase of the project is already under implementation and expected to be commissioned in 2027.
- Implementation of a modernised, energy-efficient wastewater treatment process aligned with European requirements and the HELCOM Recommendation, to be carried out 2026-2027.
“Our wastewater facility, vodokanal, is the largest energy consumer in the city. This project is important to achieve energy resilience, not only for the company, but for the city as well. With this, Vodokanal will move from being solely an energy consumer to becoming an energy provider,” said Dmytro Vankovych, Director at LCCE Lvivvodokanal.
The initiative makes a real difference in Ukraine and will directly benefit Lviv’s over 900,000 residents by securing local energy production and increasing wastewater treatment capacity and reliability. Significantly reducing the overflow of untreated sewage and nutrients into the river will provide cross-border environmental benefits all the way to the Baltic Sea, directly supporting Nordic efforts to restore the Baltic Sea’s fragile ecosystem. Phosphorus discharge is expected to be reduced by 69% and biological oxygen demand by 64%. Moreover, installing a renewable energy source will decrease the need for electricity from external sources, enhancing energy resilience and reducing CO2 emissions by 40%.
“This project exemplifies how targeted investments in green infrastructure can deliver both immediate humanitarian relief and long-term environmental positive impact. By supporting the modernisation of Lviv’s wastewater treatment and the development of Ukraine’s first large-scale biogas facility, we are helping to build local resilience while contributing to the health of the Baltic Sea. It’s a powerful demonstration of how public infrastructure finance can drive sustainable change across borders,” said Annemette Ditlevsen, Managing Director and Co-Head of Public Infrastructure Finance at Impact Fund Denmark.
Malin Perhult, Head of the Ukraine Unit at Sida added: “We are very pleased that we have been able to support the modernisation of the wastewater treatment plant in Lviv city, which will benefit many people in Ukraine, not least Lviv’s over 900,000 inhabitants. Supporting the modernisation of municipal infrastructure in Ukraine is fully in line with Sida’s support for Ukraine’s long-term reconstruction.”
Funding for the two phases totals EUR 70 million. Impact Fund Denmark is now contributing EUR 12 million and Sweden (Sida) EUR 3.7 million in grant funding through Nefco. Other financiers include the European Bank for Reconstruction and Development (EBRD), the Eastern Europe Energy Efficiency and Environment Partnership (E5P), the Republic of Slovenia and the City of Lviv. The John Nurminen Foundation from Finland provides an in-kind contribution for the installation and commissioning of a chemical precipitation facility. The biogas plant is being constructed by the Slovenian-Norwegian consortium Riko-Cambi.
Bo Nyhus, Investment Director at Nefco, appreciates the Nordic efforts to support Lviv in this project. “We are pleased to deepen our cooperation with Lvivvodokanal. In addition to many other benefits, rehabilitating the treatment plant reduces discharges into the Poltva River – and ultimately into the Baltic Sea. As the only major city with a direct impact on the Baltic Sea, Lviv is a key partner in protecting our shared marine environment.”
- See also: From Lviv to the Baltic Sea: Danish Grant to Ukraine Targets Cleaner Waters on Impact Fund Denmark’s website
The three agreements with Lvivvodokanal are the first of many agreements Nefco is entering into in connection with the Ukraine Recovery Conference. Nefco has been active in Ukraine for over 20 years and currently plays a key role in the country’s recovery efforts by focusing on concrete actions by Ukrainian cities and utilities.
For further information, please contact:
Bo Eske Nyhus, Investment Director, Nefco
bo.nyhus@nefco.int, +358 10 6180 665
Josefin Hoviniemi, Vice President Communications, Nefco
josefin.hoviniemi@nefco.int, +358 50 464 6995