Ukrainian communities are preparing recovery projects. Is small business ready for them?

Energy-efficient buildings, modern water utilities, renewable energy, automation, new waste management systems — all of this will take more than money. It will take equipment, technologies, engineering solutions and companies capable of supplying them. And a significant share of that could be done by Ukrainian small and medium-sized enterprises.

When we talk about Ukraine’s future recovery, we usually picture large construction companies, international corporations and multi-million investment projects. But look inside such a project and the picture is quite different. Inside there will be pumps, automation, ventilation systems, heat pumps, metering devices, solar equipment, energy storage, building materials, containers, sorting equipment, software and dozens of other goods and services.

A significant share of this is already produced, or could be produced, by Ukrainian small and medium-sized enterprises.

Which raises a different question: does the Ukrainian entrepreneur see this future market today?

The community knows about a future project before business does

Imagine a small community whose water utility consumes far too much electricity. Today this is not yet a tender, or even a finished investment project. It is a problem the community is only beginning to analyse.

The analysis may show that the old pumps need replacing, that variable-frequency drives should be installed and their operation automated, that water losses need cutting, that modern metering should be put in place, and that part of the electricity could be generated on site. Out of a single problem, a comprehensive water supply modernisation project gradually takes shape.

For the community this is an investment project. For a Ukrainian company that manufactures automation, pumping equipment, monitoring systems or energy solutions, it is a potential future market.

But today these two sides often meet far too late. Business learns about a community’s need only when the procurement is announced. By that point the technical solution has already been settled, the requirements have been defined, and there is virtually no opportunity to propose a different technological approach.

There is a gap between the future investments of communities and the technological capabilities of Ukrainian small business. And we want to try to narrow it.

What does Net Zero have to do with it?

This is where the concept of Net Zero comes in. It may sound like yet another complicated European term, so let us put it in plain language.

Europe is gradually moving towards an economy that needs far less fossil fuel, uses energy and materials more efficiently, and produces far fewer greenhouse gas emissions. That requires new technologies, equipment and production capacity.

This is not only about solar panels and wind farms. It is about a much wider range of solutions needed in energy, buildings, industry, transport and other sectors of the economy.

And here an opportunity opens up for Ukrainian small and medium-sized business. Ukraine can do more than buy technologies for a green recovery. Part of these technologies, components, equipment and engineering solutions it can produce itself.

The competitiveness and innovation capacity of precisely such small and medium-sized enterprises is the focus of the European project Net Zero SMEs under the Interreg Europe programme.

RCERBS takes part in Net Zero SMEs as a Ukrainian Discovery Partner. For us this is a chance not merely to study European experience, but to ask a practical question: how can Ukrainian SMEs become part of the future market of Ukraine’s green recovery and of the European clean technology market?

But where do the projects themselves come from?

This question turned out to be no less important for us.

You can train companies, run consultations, explain European standards and technologies. But in the end business needs a market. It needs to understand which solutions will be needed in one, two or three years, who will need them, and in which direction it is worth developing its own product.

And this is where Net Zero SMEs intersects with another strand of the Foundation’s work — Project Navigator.

Today the communities working with Project Navigator are gradually shaping their own project ideas in energy, water supply, waste management, municipal infrastructure and other areas. After analysis, selection and preparation, some of these ideas may turn into full-fledged public investment projects.

Not every one of them will receive funding. And alignment with the principles of the green transition does not in itself mean automatically obtaining European Union money. For that, a project must meet the requirements of a specific programme and have sufficient technical, financial and organisational readiness.

But the direction is clear: a significant part of the modernisation of Ukrainian infrastructure will have to follow the principles of energy efficiency, decarbonisation, resource efficiency and modern environmental standards.

And for Ukrainian SMEs it matters that they see this process not when a tender appears, but considerably earlier.

Project Navigator can show business where demand is heading

We want to gradually open one more window in Project Navigator — this time for small and medium-sized business.

This is not about turning the platform into a noticeboard where companies sell communities pumps, boilers or solar panels. Still less should business determine which equipment a community writes into its future project.

The logic is different.

A community should first define its problem. Then understand what result it wants to achieve. And only after that look for the best technical solution.

What matters for business is to see not a specific future procurement, but the direction of demand.

If dozens of communities have a problem with high energy consumption at their water utilities, that is a signal to manufacturers of pumps, automation and energy management systems. If communities are planning to modernise hundreds of municipal buildings, that is a potential market for companies working with insulation, ventilation, heat pumps, automation and renewable energy. If communities are moving to a new waste management system, they will need containers, vehicles, sorting, composting, digital record-keeping and other solutions.

In such a model, Project Navigator can show Ukrainian business not a single tender, but the market that is gradually taking shape.

And that is far more interesting.

Not simply to sell. To prepare for a new market

For a small company, information of this kind can shape its own investment decisions.

Is it worth developing a new product? Does the equipment need certifying to European requirements? Does it make sense to scale up production? Which technologies are Ukrainian communities short of? Where is a Ukrainian manufacturer needed, and where do we depend almost entirely on imports? Who could we build a joint product with?

This is where another important side of Net Zero SMEs becomes clear. It is not only about a company becoming “greener”. It is about its competitiveness — that is, its ability to offer a product the new European and Ukrainian economy will actually need.

Sometimes that calls for modernising its own production. Sometimes — for finding a research or technology partner. Sometimes — for obtaining certification, changing the product, or preparing an investment project to expand production.

And sometimes what a company needs above all is to see that such a market is emerging at all.

We are looking for Ukrainian companies that find this interesting

That is why, for RCERBS, taking part in Net Zero SMEs is not only about an international exchange of experience. We want to find Ukrainian small and medium-sized enterprises that already work, or plan to work, with technologies and solutions for the green transition.

We are interested in manufacturers of equipment and components, engineering and technology companies, developers of automation systems and digital solutions, and companies working in energy efficiency, renewable energy, water supply, resource efficiency and other areas connected with the future modernisation of the economy and infrastructure.

But we are also interested in feedback.

What stops Ukrainian SMEs from working in this market? No information about future projects? Not enough funding to modernise production? Certification too difficult? Need a partner? European requirements unclear? Or does the company have a technology but not know who in Ukraine needs it?

The answers to these questions matter both for our work in Net Zero SMEs and for the further development of Project Navigator.

So we invite Ukrainian small and medium-sized enterprises that see themselves as part of the Net Zero economy and Ukraine’s green recovery to join this work.

Because Ukraine’s recovery is not only a question of who will provide the money for new projects.

There is a question of no less importance — who will produce the technologies, equipment and solutions for them.

And we would very much like the answer to be, more and more often:

Ukrainian business.