A boy builds eco-tree as a part of PPP workshop during the USAID Field Days in Vinnytsia.
A boy builds eco-tree as a part of PPP workshop during the USAID Field Days in Vinnytsia.

The growth of local government remains stifled by the limited resources that municipalities have at their disposal to build and operate basic services and infrastructure.  Local governments need to attract domestic and foreign capital investment and to learn to manage their budgets effectively, while becoming more transparent and accountable to their citizens.


  • To help Ukrainian cities attract investment, promote business development, and create jobs.
  • To strengthen the expertise of municipal government to perform such core functions as forming and implementing strategic plans.
  • To improve the delivery of essential communal services, such as energy, water, and wastewater treatment to consumers.
  • To improve the legislative and regulatory frameworks that make cities more creditworthy and able to attract budget, debt, and equity financing.
  • To promote a public-private partnership model of collaboration between local governments and the private sector.

USAID municipal and local economic development programs enhance local government expertise to provide better services to residents, develop independent and transparent financial planning and management strategies, attract investment, and create a better business environment.

Municipal Finance Strengthening Initiative (MFSI-II) Roll-out Project
The purpose of this follow-on activity is to promote efficient and transparent implementation of local budgets to foster local social and economic development. MFSI-II will advance the following objectives: 1) provide legislative, methodological, and organizational support to central and local government bodies to expand Performance Program Budgeting (PPB) to all local budgets in Ukraine, as well as to ensure  the institutional sustainability of PPB training; 2) build the capacity of 15 selected cities to develop and implement multi-year development strategies, including the introduction of financial practices that foster energy efficiency; and 3) enhance public awareness and understanding of the public budgeting process, revenues, and expenditures.

Development Initiative for Advocating Local Governance in Ukraine (DIALOGUE)
USAID’s DIALOGUE project provides training to Ukrainian public servants, civil society organizations, and the public to help build the environment for local government reforms and ensure broad-based support for decentralization. The project seeks to create an equitable dialogue between local governments and the central government, and expand the legal and institutional framework for the development of local government in Ukraine.

Public-Private Partnerships Development Program (P3DP)
The Public-Private Partnership (PPP) Development Program promotes PPPs as a model of collaboration, with a focus on accessing private sector investment and expertise to improve infrastructure and the quality of public services in Ukraine. Program activities focus on: 1) legal and institutional reforms to enable PPPs; 2) strengthening a national public-private partnership unit within the Ministry of Economic Development and Trade (MOEDT) that supports use of PPPs; 3) training government and private sector representatives on PPP design and implementation, and communicating the benefits of PPPs to the public; 4) working with municipal governments to implement 10 pilot PPP projects; and 5) mitigating climate change and supporting the use of clean energy.

Municipal Finance Strengthening Initiative (MFSI-II) Roll-Out

  • Twenty one Ministry of Finance orders approved to simplify PPB procedures for formulation of local budgets. The number of budget program and performance indicators reduced by 35 percent.
  • PPB implementation pilot extended to 692 budgets representing all of Ukraine’s oblasts.
  • 5,000  newly-trained local budget officers developed 35,000 budget programs in all oblasts of Ukraine.
  • Implementation of budget programs enabled local governments to achieve budgetary savings at an average rage of UAH 400mln in 2012 and reallocate them to provide better services to their constituents.
  • A Cabinet of Ministers Resolution approved simplified local borrowing procedures and lifted restrictions limiting local borrowing thus facilitating implementation of PPPs and energy performance contracts in the municipal sector.


  • Set up Local Government Advisory Boards in 20 oblasts of Ukraine to promote decentralization agenda;
  • Successfully advocated for the creation of Regional Advisory Boards  adopted in a Resolution by the Cabinet of Ministers;
  • Set up a web-based network of local government lawyers to enhance legislation drafting;
  • Launched 85 TV programs , entitled “zMISTOvna Ukraina” , which address the successes and problems of local self-governance; and,
  • Established the Local Government Caucus in the Verkhovna Rada of Ukraine.

Public-Private Partnerships Development Program (P3DP)

  • Improved, amended and clarified a framework of PPP laws and regulations governing the development and use of PPPs.
  • Drafted the National PPP Strategy and Implementation Plan, which is on track to be approved by the Cabinet of Ministers and become part of the National Reform Action Plan; 
  • Helped establish a PPP Unit within the MOEDT, which adopted P3DP’s recommendations on the Unit’s responsibilities, services, and operational procedures;
  • Enhanced the knowledge and skills of PPP unit staff and government officials at national and local levels;
  • Moved six PPP pilots toward public tendering in the key sectors of health, parks and recreation, solid waste management, transport, and alternative energy.  Two to four of these projects are expected be tendered within the next six months.
  • Began developing an additional four PPP pilot projects in kindergarten care, energy efficiency, alternative energy, and municipal management.
  • Integrated climate change considerations into all policy and programming activities, demonstrating net decreases in carbon emissions that will result from the Program’s activities.


Last updated: August 26, 2014

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