New Swedish funding strengthens Nefco’s role in rebuilding Ukraine with focus on decentralisation and environmental resilience

New Swedish funding strengthens Nefco’s role in rebuilding Ukraine with focus on decentralisation and environmental resilience

(IN BRIEF) Sweden has pledged an additional SEK 700 million (approximately EUR 65 million) to Nefco to support Ukraine’s green recovery, bringing total Swedish funding for Nefco’s programme to EUR 82.3 million, with a focus on sustainable waste management, decentralisation, and broader green transition initiatives. The funding will be implemented in close cooperation with Sida, SALAR International, Avfall Sverige, and other Swedish partners, ensuring all projects align with EU standards and promote resilient, inclusive reconstruction. Building on existing pilot projects and long-standing cooperation, the initiative aims to modernise municipal waste systems, strengthen local governance, and scale up successful models across war-affected regions of Ukraine.

(PRESS RELEASE) HELSINKI, 3-Feb-2026 — /EuropaWire/ — Sweden has committed an additional SEK 700 million, equivalent to approximately EUR 65 million, to support Ukraine’s green recovery through the Nordic Environment Finance Corporation (Nefco). The new funding will primarily focus on sustainable waste management, decentralisation reforms, and broader green transition initiatives, reinforcing Sweden’s long-term engagement in Ukraine’s reconstruction. With this latest contribution, Sweden’s total financial support to Nefco’s Green Recovery Programme for Ukraine now amounts to EUR 82.3 million.

The initiative will be implemented through close cooperation between Nefco, the Swedish International Development Cooperation Agency (Sida), SALAR International, Avfall Sverige, and other Swedish institutions, bringing together Nordic expertise in environmental governance, municipal management, and infrastructure development. All activities supported under the programme will be inclusive, resilient, and aligned with European Union standards.

The funding is structured around three main areas of intervention. First, it will strengthen municipal waste management systems across Ukraine, addressing both immediate reconstruction needs and long-term sustainability. Second, it will support decentralisation reforms and recovery efforts aimed at empowering local governments and improving public service delivery. Third, it will finance additional green transition projects that leverage synergies among Swedish institutions to accelerate environmentally sustainable rebuilding.

This contribution builds on more than twenty years of collaboration between Sida and Nefco. Through this partnership, Sweden aims to mobilise significant resources to help Ukrainian municipalities rebuild essential infrastructure, modernise waste management systems, and enhance local capacity. Nefco will act as fund manager and implementing agency, working in close coordination with SALAR International and Avfall Sverige to ensure effective delivery of results.

A central objective of the cooperation is to catalyse investments that will transform Ukraine’s waste management sector towards inclusive, modern, and sustainable services. Planned activities include mapping and assessing existing waste infrastructure, identifying critical gaps, and exploring innovative approaches to waste prevention, reuse, and recycling. Feasibility studies and new investment projects will be launched to modernise systems and strengthen resilience, building on the ongoing Sida-funded programme led by Avfall Sverige and SALAR International.

In parallel, the decentralisation component—implemented under the existing Polaris programme—will focus on strengthening municipal governance and public service provision, particularly in regions most affected by the war. All projects will be developed in accordance with EU regulatory frameworks and best practices.

Malin Perhult, Head of the Ukraine Unit at Sida, highlighted that the partnership reflects Sweden’s continued commitment to Ukraine’s recovery and green transformation. She emphasised that combining Swedish resources with Nefco’s expertise will deliver tangible improvements in municipal services, environmental sustainability, and quality of life for Ukrainian citizens.

Sweden is already financing a EUR 6 million pilot project in Irpin, near Kyiv, to improve sustainable reconstruction and debris management following extensive wartime destruction. Managed by Nefco, the project serves as a model that can be replicated in hundreds of municipalities across Ukraine. In addition, Sweden is supporting Nefco-led projects focused on repairing and modernising district heating, water, and wastewater systems, mainly in western and central Ukraine.

Ulf Bojö, Vice President and Head of Nefco’s Eastern Europe Department, noted that Nefco has worked with Swedish support in Ukraine for two decades and welcomed Sida’s continued trust in the organisation to manage and expand green recovery initiatives.

Nefco is currently implementing more than 60 green recovery projects in Ukraine, financed by Sweden, the European Union, Denmark, Finland, Iceland, and Norway, underscoring the scale and international scope of the reconstruction effort.

For further information, please contact:

Vitaly Artyushchenko, Programme Manager, Nefco
vitaly.artyushchenko@nefco.int, +358 50 9112427

Lia Oker-Blom, Communications Manager, Nefco
lia.oker-blom@nefco.int, +358 10 6180 671

Maria Stridsman, Senior Programme Manager, Sida
maria.stridsman@sida.se, +46 76 495 59 62

Erik Faxgård, Programme Manager Ukraine, SALAR International
erik.faxgard@skr.se

Andrik Mols, International Project Manager, Avfall Sverige
Andrik.mols@avfallsverige.se, +46705356637

About Sida

Sida – the Swedish International Development Cooperation Agency – is a government agency working to create better living conditions for people living in poverty and under oppression around the world. Sida works on behalf of the Swedish government and parliament, and the agency’s activities are funded through Swedish tax revenue. Read more at www.sida.se

About SALAR International

As part of the Swedish Association of Local Authorities and Regions (SALAR), SALAR International work globally to strengthen democracy and good governance at the local level. Building on SALAR´s expertise and Swedish experiences on local self-governance and decentralisation, SALAR International designs and implements projects with context-specific solutions to the challenges and realities in partner countries. The vision is a world where all people have the power to shape their own lives in inclusive local democracies and sustainable communities. Read more at www.salarinternational.se

About Avfall Sverige / Swedish Waste Management Association

Avfall Sverige is the Swedish Waste Management Association, a stakeholder and trade association in the field of waste management and recycling, founded in 1947. The members—the municipalities and municipal companies—ensure that waste is collected and treated in a sustainable way. Avfall Sverige strives for sustainable and innovative waste management solutions, in collaboration with others based on their social responsibility. Their vision is a future without waste. Therefore, Avfall Sverige influences, develops, and collaborates for a future where waste is prevented, recycled and seen as a resource. Read more at www.avfallsverige.se

Photo: Three Ukrainian women and two men are being trained as professional demolition workers through Nefco’s ongoing pilot project in Irpin, funded by Sweden. The course participants will be able to contribute Nordic expertise to Ukraine’s reconstruction – Lotus

SOURCE: Nefco