A Ukraine City Envisions A Smarter, Greener Future

June 24, 2021

The city of Zaporizhzhia, Ukraine has a vision: it wants to be a smart city with a network of digitally connected devices that communicate and exchange data, e-buses and battery-electric trolleybuses with wheelchair ramps, an upgraded city center park and main street, and modern road maintenance machinery.

Zaporizhzhia, one of the largest industrial centers and densely populated cities in Southern Ukraine, is grappling with aging infrastructure dating as far back as the Soviet era. For example, most of the traction substations and special maintenance vehicles, which are key elements of electric transport infrastructure, are from the 1960-70s and obsolete.

With Ukraine’s municipal services suffering from years of underinvestment, cities face significant gaps in terms of providing reliable public services. Further, with around 70 percent of the country’s population living in urban areas, cities like Zaporizhzhia are in urgent need of funding. The government alone cannot address these massive infrastructure challenges, which is why a robust private sector is essential to spur investments and strengthen the local infrastructure.

In response, IFC’s Cities Program in Ukraine is providing financial and advisory support to the nation’s growing metropolises. In Zaporizhzhia, IFC worked early on with the City Council to put in place a smart city strategy that aims to optimize city functions while improving the quality of life for citizens by using data analysis and smart technologies, such as the so-called LoRaWAN network, designed to wirelessly connect battery operated objects, or sensors, to the internet.

The program will help the city develop a smart city platform that will improve e-governance and provide better digital services to local communities. This includes, for instance, smart traffic management and provision of safety measures through real-time monitoring of heat and water pipe pressure to ensure the quality of communal services.

IFC also helped improve the city’s management practices to address environmental and social risks along with supporting Zaporizhzhia to secure its first international credit rating.

The €35 million loan to Zaporizhzhia, which includes a €2 million contribution from the Climate Investment Funds, will help the municipality rehabilitate up to 2 kilometers of streets, purchase de-icing and other road maintenance equipment, as well as modern battery-electric trolleybuses and e-buses, and upgrade related electric transport infrastructure. It will also help enhance the communications system through information boards featuring arrival and departure time of the public transport.

“Over the last two years, IFC has engaged in deep project development work in Zaporizhzhia to help prioritize and develop bankable investments to help the city realize its vision of upgrading, digitizing, and greening its municipal infrastructure. We are proud to provide access to long-term finance that addresses massive infrastructure needs and promotes climate resilience and sustainability,” says Cheryl Edleson Hanway, Regional Industry Senior Manager for Infrastructure at IFC.

As Zaporizhzhia develops the smart city program, IFC—in partnership with the Swiss State Secretariat for Economic Affairs SECO and the Austrian Federal Ministry of Finance—is supporting the project to prompt a shift to greener urban transport alternatives.

This is important given that the country’s transport emissions are growing at an alarming rate— almost 12 percent of the country’s total CO2 emissions. The 13-year loan will help to lower emissions in the city and install reliable charging stations for e-buses and electric transport. The high load carrying capacity of new vehicles will also help reduce the number of low-capacity and inefficient vehicles plying the streets.

These initiatives will enable Ukraine—among the world’s most energy-intensive economies—to gradually shift to a low-carbon economy.

Future Roadmap

“Zaporizhzhia is one of Ukraine’s leading cities in the movement to renew and expand its public transport infrastructure as part of a broader shift toward a more sustainable and reliable urban transit system. We are committed to working together with our international partners to offer the best to our people,” says Volodymyr Buryak, Mayor of Zaporizhzhia.

Going forward, IFC’s investment will help improve the city’s infrastructure efficiency, allowing the city to open new routes and provide better, more modern services to the underserved, including the elderly and differently abled.

Given its global network and experience, IFC is well-positioned to mobilize commercial financing for priority projects, connect cities with capital markets, and help improve creditworthiness of cities. Through its $9 billion Cities Initiative, which combines investment and advice, IFC has forged strategic partnerships with cities around the world to offer solutions in a range of areas—urban transportation, affordable housing, energy efficiency, and climate resilience—with private sector participation.

As IFC continues to support municipal authorities to build climate-resilient and sustainable cities globally, Zaporizhzhia strives to steer the city into the future.

Published in June 2021