What is the portfolio approach and how does it work? Ukraine’s experience

In 2025, four Ukrainian cities – Khmelnytskyi, Bucha, Zhytomyr, and Slavutych – joined the Mission-Oriented Economy local transformation programme, part of the EU-funded Mayors for Economic Growth (M4EG), implemented by UNDP Europe and Central Asia. Each city will receive approximately US$20,000 to launch its portfolio, with the opportunity to attract an additional US$100,000 for economic sustainability and green transition projects.

What is the portfolio approach?

The portfolio approach is an innovative method of managing local development that treats cities as complex, interconnected systems rather than collections of separate problems. Like a financial investor who diversifies across multiple assets, cities develop a set of parallel, mutually reinforcing initiatives, called “options”, instead of relying on a single solution. This enables flexible, adaptive management and continuous learning in dynamic, uncertain environments.

How does it work?

Cities begin by defining an overarching mission, then test several pilot activities simultaneously to identify what works. Throughout implementation, teams apply Monitoring, Evaluation, and Learning (MEL) frameworks to analyze results and adjust course. The approach is best suited to situations of high uncertainty, complex systems, and the need for creative problem-solving. The first Ukrainian cities to pilot it were Mykolaiv (Blue Economy Transition) and Ternopil (Green and Comfortable City).

Why does it matter now?

Standard strategic urban planning has taken a back seat during wartime due to the need for rapid responses, yet it is precisely now that it is most critical. As historian Timothy Snyder notes, recovery and integration processes that don’t begin during the war will not begin after it. Cities with clear recovery plans will be better positioned to attract investment and support the return of residents. At the same time, economies must continue to function even in wartime – the portfolio approach enables growth under uncertainty rather than mere survival. Finally, Ukraine’s path to EU accession demands sustainable economic planning, adherence to the European Green Deal, and modern governance practices, making systematic development work an essential condition for strengthening international confidence.

Beyond grants, the M4EG initiative connects cities to broader financial mechanisms, including public-private partnerships and European financial instruments, thereby creating a potentially transformative opportunity for Ukrainian cities as they rebuild their futures.

Read the full article on the M4EG website.