1. INTRODUCTION

Since the escalation of the war in February 2022, Ukraine has been facing unprecedented threats to human security.

The Czech-UNDP Partnership for SDGs delivers expertise and innovative solutions through three components: Expertise on Demand, which provides hands-on experience and training for knowledge transfer; the Czech Challenge Fund: Solutions for SDGs, offering scalable solutions to development challenges at national and sub-regional levels; and Knowledge Management, mobilizing expertise to address development objectives and ensure broader impact.

Since its inception, the Czech-UNDP Partnership has supported over 90 Challenge Fund solutions across six priority countries, with more than half successfully adopted and a third scaled up. In Ukraine, this Partnership is spearheading transformative initiatives, including the Resilient Business Accelerator, which champions circular economy models and empowers small and medium-sized enterprises to lead the way in post-conflict recovery and the green transition.

This Call for Proposals launched the Innovation Challenge: Resilient Business Accelerator for micro-, small-, and medium-sized enterprises (MSMEs) are encouraged to participate in innovative solutions for economic revitalization.

The Call sets out the criteria for compliance with the requirements for Innovation Challenge, the process of submission and selection of project proposals, as well as the criteria for evaluation of projects to be selected.

2. INFORMATION ABOUT THE FUNDING PROJECTS

This Call for Proposals is announced within Czech-UNDP Partnership for SDGs with the financial support of the Ministry of Foreign Affairs of the Czech Republic. 

UNDP in Ukraine plays a central role in strengthening competitive and resilient MSMEs, positioning them as key drivers of sustainable growth. Targeted support helps these enterprises integrate into local and national markets, adapt to evolving economic conditions, and align with future development priorities. UNDP's approach to economic recovery combines hard interventions such as grants, asset provision, and infrastructure rehabilitation with soft measures including skills development, advisory services, and institutional capacity building. Through this Call for Proposals, businesses will receive a comprehensive package of support that pairs direct grants and improved access to finance, enabling them to pilot and scale innovative solutions for lasting competitiveness and resilience. With recognized expertise in advancing new economic models in Ukraine, including green, blue, circular, sharing, care, and impact, UNDP builds on experience in high-potential value chains to create jobs, drive green and digital transformation, and strengthen business ecosystems.

The overarching goal of this Call is to support economic recovery and foster the development of an innovative and resilient MSME ecosystem in Ukraine by supporting the development and uptake of sustainable circular economy solutions. Micro, small, and medium-sized enterprises are the backbone of Ukraine's economy but often lack the resources and support to adopt circular practices.

By accelerating the transition to circular economic models, this Call for Proposals seeks to strengthen emerging green industries, stimulate innovation, and support sustainable job creation in Ukraine. It aims to contribute directly to recovery that is economically viable, environmentally sound, and socially inclusive.

UNDP promotes innovation in how services are delivered, how financial resources are mobilized, and how local economies are shaped to meet future challenges. Within this approach, circular economy solutions, such as debris recycling, modular construction, and waste-to-resource systems, are seen as essential drivers of resilient economic development in Ukraine.

Replacing the traditional model of production and consumption with circular systems focused on reuse, repair, recycling, and resource efficiency is vital to reduce dependency on raw materials and lower environmental impact. These solutions also offer significant cost savings and productivity gains, particularly in the context of Ukraine's post-conflict reconstruction and green recovery agenda.

Proposals are invited from Ukrainian MSMEs focused on developing, piloting, or deploying new products, technologies, services, or business models that promote circular economy principles, including:

1. Waste and Debris Management: focused on minimizing waste through efficient systems for collection, sorting, recycling, and disposal.
2. Reuse and Refurbishment: aimed at extending life cycles of products and materials by promoting sharing, repairing, refurbishing, and reusing them.
3. Efficient Resource Use: focused on minimizing resource consumption and environmental impact through lean production methods that streamline processes, eliminate waste, and enhance efficiency across the product lifecycle—including innovations that reduce material and energy use, optimize supply chains, and support sustainable manufacturing practices.
4. Digital Innovations, Cybersecurity, and Artificial Intelligence (including Industry 4.0) Technologies: supported circular economy goals by enhancing resource optimization, operational efficiency, and system transparency by the AI-driven predictive maintenance to extend equipment lifespans and reduce waste, digital twins for simulating and optimizing resource flows and production cycles, blockchain for secure and transparent tracking of materials across circular supply chains, IoT-enabled monitoring systems for energy and material efficiency

The initiative is an integral part of UNDP's economic recovery offer, designed to deliver results that are both scalable and replicable. By promoting green economic practices and aligning with climate resilience objectives, it ensures that recovery efforts contribute to long-term sustainability while advancing economic recovery. By 2027, UNDP aims to implement at least three pilot initiatives, including Innovation Challenges, that advance blue and green economy models and strengthen the capacities of sub-national and local authorities to lead sustainable economic recovery. These pilots will focus on areas such as circular economy, sharing economy, care economy, and mission-oriented or impact economy, while also supporting MSMEs in transitioning to sustainable business models that can be adapted and expanded across regions.

This Call is well positioned to generate results with strong potential for wider adoption by building on UNDP's established capacity building programmes for MSMEs and extending them into direct financial and advisory support. By integrating the Resilient Business Academy's training and tailored guidance through the Resilient Business Accelerator, it creates a training - consulting - financing model that can be replicated across sectors and regions. Prioritizing alumni of the Resilient Business Academy and the “Trajectory 2.0” programme, particularly women and veterans, ensures that support is directed to enterprises already equipped with the skills to innovate and grow.

In line with the eligibility criteria, proposals that demonstrate cooperation with Czech entities will be prioritized during the selection process, as such partnerships add value by strengthening innovative solutions in the field of circular economy and fostering international cooperation and knowledge exchange.

3. REQUIREMENTS FOR THE INNOVATION CHALLENGE PARTICIPANTS AND THE TERRITORY FOR HOLDING OF THE PROGRAMME

3.1. Under this Call for Proposals will be supported project proposals submitted by MSMEs meeting the requirements of the Call. Each MSME – applicant may submit only one proposal. The signatory of the Innovation Challenge Agreement with UNDP should be the head of the applicant MSMEs.

3.2. Each applicant should meet the eligibility criteria outlined below:

3.2.1. To be eligible to apply, MSMEs must:

• be registered as a legal entity in accordance with the current legislation of Ukraine, with a proven track record of active operation for at least three years;
• be registered and/or operate in territories controlled by the Government of Ukraine.

3.2.2. MSMEs should not:

• be bankrupted or in the process of bankruptcy or termination procedures;
  • have tax debt and / or legal disputes and / or property disputes and / or be a defendant in lawsuits and enforcement proceedings related to corruption offences;
  • operate in or have the subsidiaries in the Russian Federation and/or Belarus and other countries in the sanction list;
  • be subject to sanctions (including owners and management) imposed by the Government of Ukraine or EU. 

3.3. Project proposals from applicants that do not meet the above requirements (see paras. 3.1 - 3.2 above) will not be considered. 

4. TASK DESCRIPTION AND EXPECTED INNIVATION CHALLENGE RESULTS

4.1. The intended outcome is the development of a new product, technology, service, model or approach within the priority areas.

4.2. Eligible applicants include businesses seeking to test, launch, enhance, or scale existing solutions related to these priorities.

4.3. Proposed solutions should be innovative, feasible, and replicable.

4.4. Applications should outline specific actions and partnerships required for implementation, detailing all related activities, stakeholder engagement, costs, and potential for scaling.

4.5. Applicants are expected to consult with local partners, stakeholders, and/or end beneficiaries to ensure the solution is well-adapted to local conditions and remains viable.

5. PROJECT DURATION

For project proposals submitted, the implementation period should not exceed 5 months.

6. FINANCING

1. The total amount of the prize fund of this Call of Proposals is up to USD 120,000 financed by the Ministry of Foreign Affairs of the Czech Republic.
2. The prize to be provided to the winners should be used to fund the planned activities of the proposed project according to the approved budget.
3. The threshold for the maximum prize amount for the Innovation Challenge is USD 40,000. However, amounts requested in the financial proposals should be well-justified, based on market rates, and demonstrate best value for money.
4. The prize will be provided in UAH equivalent according to official UN Operational Rates of Exchange (UNORE) on the date of the payment.
5. The prize amount will be given in two tranches as follows: I tranche – 50% (upon signing of the Innovation Challenge Agreement); II tranche – 50% (after the report on the completion of the first stage of the project). In exceptional cases, when the innovative challenge requires the first tranche of funding to exceed 50% for project implementation, an alternative financing scheme will be used, if such a decision is made by the Evaluation Committee and reflected in the relevant Minutes.

PROJECT PROPOSAL EXPENSES

7.1. Eligible expenses. The funds provided under this Call for Proposals may be used only as follows:

• Technology, design, business development and other services
• Equipment and supplies
• Training and event expenses
• Costs, including travel connected to the implementation and scaling of the innovation

The expenses shown above should be predicted to reflect the project goals and should be clearly justified in accordance with the project objectives. Only expenditures accrued during the project in accordance with the project plan in line with project objectives necessary for achieving project outcomes and completed by the end of the project are eligible for financing. 

All agreements with subcontractors or third parties must be submitted with the application and must contain provision that the company retains ownership of all new intellectual property and know-how that may be created during the implementation of the project.

7.2. Ineligible expenses are those associated with:

• Capital expenditures
  • Interest or debt owed to any third part
  • Expenditure and provisions for possible future losses or debts
  • Items already financed through another similar scheme, program or institution, financial awards
  • Bank and currency exchange expenses, losses, fees and penalties.

7.3. All taxes and fees, including VAT, are the responsibility of the prize recipient. These costs are not covered by the prize received from UNDP.

7.4. Procurement policy

All procurement operations under projects must be carried out according to the following rules:

• Procurement should be carried out in accordance with UNDP procedures^[1] in force at the time of project implementation.

Procurement policy regarding the project implementation should be based on the following principles: 

• Financing of costs necessary to achieve the project goals and objectives.
  • Comply with the principles of sound financial management, in particular, value for money and cost-effectiveness.
• Collegiality of the decision-making on procurement issues and selection of goods and services suppliers.
  • Transparency and accountability in the use of funding to UNDP.
  • Absence of conflict of interest.

Eligible costs must:

• be necessary for carrying out the project activities.
  • have been incurred by the applicant during the implementation period.
  • be adequately recorded, identifiable and verifiable, and be backed by original supporting documents. 

8. PROCEDURE FOR SUBMITTING PROJECT PROPOSALS AND OBTAINING ADVICE DURING THE PREPARATION OF PROJECT PROPOSALS

The application package consists of the following:

1. Application form and financial proposal completed according to the provided template:(filled in Word format);
2. CV of the project manager (PDF);
3. Copy of State registration certificate (PDF);
4. Bank certificate on opening UAH account by the MSMEs.

MSMEs submitting project proposals should submit the full application package (see points 1-4 above) to the e-mail address grants.ua@undp.org with the subject of the communication: “Innovation Challenge: Resilient Business Accelerator”.

Call for proposals for innovation challenge: resilient business accelerator to enhance economic revitalization | United Nations Development Programme

You can review the standard agreement by following this link https://drive.google.com/file/d/1tARHEJIZSEJOu3xiKyMV3DE-NDUIB8KR/view

The application package (see points 1-4 above) must be sent by one letter in the archive (*.zip), the size of which must not exceed 35 Mb.

Join the Q&A session on 10 October, 10:00 (Kyiv time) via the link: https://undp.zoom.us/j/84231726148?pwd=JQX8UQmLxBeWKaEb1wUKo1eIms3UHR.1 (Language: Ukrainian). 

Submission Deadline:

Project proposals, with supporting documents, should be submitted no later than 24 October 18:00 (Kyiv time).

9. SELECTION PROCESS

Screening

After the submission deadline, all applications are reviewed by the UNDP project team members, who are the members of the Selection Panel, against the eligibility criteria known as the screening stage. Eligible candidates will proceed to the following stage.

Participant selection

All longlisted applications that pass the screening stage will be analyzed by the UNDP Evaluation Panel members. Additionally, the interviews will be conducted with the shortlisted applicants, which then will be evaluated according to the selection criteria and scored on a scale from 1 to 10:

• Innovation: Innovations that use cutting-edge technologies or innovative digital tools, or introduce new ideas, approaches, products, or services to a target group or a market.

  • Feasibility: Innovations that are feasible, i.e. they can be tested and/or implemented within four months period with the suggested budget.
  • Scalability: Innovations that have the potential to be scaled up or replicated within or even beyond their respective geographical area of operations.
  • Viable in the long-term: Innovations that contribute to regional or local development strategy, demonstrate high potential for impact and financially sustainable.
  • Results Orientation: The clarity and realism of the proposed plan for achieving measurable results, including sales projections, implementation effectiveness, profitability, and job creation.
  • Impact Measurement: The inclusion of relevant performance indicators and a clear methodology for assessing the economic and social outcomes of the innovation.
  • Stakeholder Engagement: The extent to which the proposal reflects the interests and priorities of relevant stakeholders, including local authorities, private sector actors, and affected / vulnerable groups, thereby fostering ownership and sustainability.
  • Alignment with PPP Needs: The degree to which the innovation is tailored to the operational realities of public-private partnerships (PPPs), including regulatory frameworks, financial constraints, and institutional capacities.
  • Promotion of Inclusive Economic Growth: The contribution of the innovation to the economic revitalization of MSMEs, particularly those affected by displacement or conflict.
  • Management: MSMEs with an adequate team in place, with clear roles and responsibilities, and the capacity to develop and implement their innovation.

   

Each criterion carried a weight of 10%. The overall average rating for the applications formed the basis for the final selection by the Selection Panel. Only applications that score above 70% will be considered for awarding the project. The applications score less than 3 points on any of criteria will be excluded from the selection, even if the total score reaches 70 points. If the proposals that pass the threshold score go beyond the available funding, the total number of Awards is limited by the total available funding for the Call for Proposals, selected in accordance with the rank of the score. 

10. REPORTING, MONITORING AND EVALUATION OF INNOVATION CHALLENGE PROJECTS

10.1. Monitoring and Evaluation

The prize recipient is responsible for monitoring project implementation and evaluation of the results thereof. The United Nations Development Programme will monitor the implementation of the Innovation Challenge projects through the prize recipient's reports, meetings with project staff, their partners, monitoring visits.

10.2. Reporting

The prize recipient will submit reports in the format specified by the United Nations Development Programme, namely:

• brief on the use of funds (tranches) and project implementation progress (one brief in total during the project implementing period after the first tranche use and before obtaining of the second tranche from UNDP);
• a final report, which will include a description of the activities and results, as well as a financial report for the entire period of the Innovation Challenge Agreement.

The activities under the Innovation Challenge Agreement shall be carried out in accordance with the norms, rules, policies and procedures of the UN Development Programme.

[1] “UNDP Procurement Methods”  Version #18