The new legal requirements aim to make the allocation of funds more transparent and investment decisions more strategically grounded. However, for local self-government bodies (LSGBs), this also means a significant update in approaches to planning, project management, and interaction with new tools.
What exactly is changing?
The main focus is medium-term planning. For the first time, the law stipulates that communities must develop a Medium-Term plan for priority public investments, which will define investment priorities for several years ahead. This is not just a document—it is a tool meant to integrate the strategic goals of the municipality with actual budgetary capabilities and national policy.
The plan must be approved by the executive body of the community no later than September 1, 2025. As noted by Maryna Honcharenko, Head of the U-LEAD with Europe Regional Office in Kharkiv oblast, the plan should be adopted simultaneously with the municipality's budget forecast, which will require coordinated efforts among all departments and executive structures of the council.
How will the new mechanism work?
One of the most significant innovations is the introduction of a Unified project portfolio of public investments. This will be a consolidated list of investment projects and programs formed on the basis of the medium-term plan. However, not all projects will be included automatically—they must undergo evaluation, prioritization, and selection according to procedures approved by the local council's executive body.
This process, according to Mykola Hulko, Municipal finance and management advisor at the U-LEAD with Europe Regional Office in Cherkasy oblast, poses a real challenge for municipalities:
“The process of forming the Unified Portfolio will be completely new for municipalities. It is no longer a wishlist, but a prioritised development tool formed by a newly established collegial body—the Local Investment Council. Its decisions must then be approved by the executive committee.”
This shift implies not only new documentation but also a change in mindset—from reactive to strategic investment planning. And while the municipality defines its own priorities, they must align with the strategic logic of national policy.
Digitalization of the process: What is DREAM?
Another important element of the new system is the digital platform. Municipalities are already getting acquainted with the Unified Information System for Managing Public Investment Projects, in which the DREAM ecosystem plays a key role. This tool not only allows storing and monitoring projects but also ensures a unified approach to reporting, transparency, and even attracting donor funding.
Pavlo Ryabokon, Decentralization and Local Governance Advisor at the U-LEAD with Europe Regional Office in Zakarpattia oblast, emphasized:
“Digital tools are becoming not an add-on, but the foundation. Without familiarity with the DREAM system, the implementation of investment projects will be impossible—even at the approval stage.”
What should communities do now?
Although some regulatory documents—such as guidelines from the Ministry of Finance and the Ministry of Economy of Ukraine—are still under development, municipalities should already begin preparations.
According to Inna Sviatna, Municipal Finance and Management Advisor at the U-LEAD with Europe Regional Office in Vinnytsia oblast, the key task at this stage is to review strategic documents:
“It’s necessary to review and synchronize strategies, development programs, and budget forecasts. All of this forms the foundation for new planning. And those who start earlier will have an advantage.”
On March 12, 2025, U-LEAD experts held the first information session titled “Public Investment Management in Municipalities: Amendments to the Budget Code of Ukraine.” During the session, participants discussed updated requirements for strategic planning, preparation and evaluation of investment projects, and the formation of a municipality’s investment portfolio.
The next event is scheduled for April 23, 2025, and will also focus on the new rules of medium-term budget planning. In addition, these topics will be explored more deeply within the training program “Steps for Specialists: Introducing Medium-Term Budget Planning in Municipalities” (application deadline – April 15).
This is about more than investments
“The formation of a medium-term public investment plan is not just another box to check. It’s about how a municipality manages its development. It’s an opportunity to define priorities, attract funding from various sources, and transparently implement projects that matter to people. In reality, this is about a new management culture—where strategic vision, teamwork, digital skills, and interdepartmental cooperation are essential. But above all, it’s a real tool for positive change in the municipality”
— notes Inna Sviatna, U-LEAD with Europe Advisor on Municipal Finance and Management in Vinnytsia oblast.
Want to dive deeper into the legislative changes and get expert recommendations?
Join the information sessions from the “Wednesday with U-LEAD” events catalogue: https://t.ly/UWEDNESDAY_website
Learn more about the training program “Steps for Specialists: Introducing Medium-Term Budget Planning in Municipalities”: https://u-lead.org.ua/news/650
