How can regional manufacturers break into procurement with a state monopoly at the level of Energoatom?

The Sumy Machine-Building Cluster for energy equipment has found the only right answer: instead of dozens of chaotic attempts to knock on closed doors, it is necessary to become a single, institutionally established “entry window.” This is a story about how to build a sustainable partnership model with a critical infrastructure operator, ensure import substitution for nuclear power plants, and transform the region’s smart specialization into real long-term contracts, scientific consortia, and investments.

“Regional recovery does not begin with investment, but with competencies. In the field of nuclear energy, Sumy Oblast already has the foundation on which a new-level economy can be built,” — Vladyslav Kondus, Executive Director of the NGO “Sumy Machine-Building Cluster of Energy Equipment.”

Practice Passport

Practice Title	“One-Day Earnings for the Armed Forces of Ukraine” (A Systematic Fundraising Model by Healthcare Institutions)
Cluster / Source Organization	NGO “Sumy Machine-Building Cluster of Energy Equipment”
Region	Sumy Region
Implementation Period	Ongoing practice (in operation since 2021)
Cluster Maturity Level	Mature cluster with a deep project portfolio
Number of Participants	20
Thematic Areas	Government Relations (GR), Innovation (R&D), Local Content (Local Value Added)
Target Audience	Mature industrial clusters with strong engineering capacity seeking to operate in critical infrastructure sectors with stringent regulatory requirements

Context and Problem Addressed by the Practice

Before the implementation of this practice, the interaction between regional machine-building companies and the national nuclear power plant operator resembled Brownian motion. Individual industrial SMEs had sporadic, purely reactive contacts with Energoatom (they saw a tender — they tried to apply).

What was not working? There was a massive gap between the strategic needs of the nuclear industry (which had an urgent demand for import substitution and modernization) and the fragmented production plans of small and medium-sized enterprises in Sumy Oblast. A single enterprise had neither sufficient weight nor an understanding of the complex regulatory environment to engage in a strategic dialogue with a monopoly. At the same time, university research developments remained “in drawers,” as they were not integrated into production chains. There was a lack of a single coordination center capable of aggregating the engineering competencies of the entire region.

Description of the Practice Mechanism (“What’s Under the Hood”)

The cluster did not simply facilitate introductions — it built a systemic infrastructure for dialogue. The mechanism is based on the “single entry window” principle, where the cluster acts as an aggregator of competencies.

Key elements and logic: Instead of ad hoc lobbying of individual plants’ interests, the cluster initiated an institutional partnership. The process begins with an audit: the cluster collects requests from the technical divisions of JSC “NNEGC Energoatom” (e.g., life extension of power units or substitution of imported components) and aligns them with the capabilities of 10+ regional SMEs and universities.

Stakeholder roles:

• Cluster management: Acts as a negotiator, a “translator” of energy security requirements into the language of regional capabilities, and an architect of consortia.
• JSC “NNEGC Energoatom”: Serves as a strategic customer and a visionary of industry needs.
• Industrial SMEs: Provide manufacturing capacity and technical readiness.
• Universities and research institutes: Carry out R&D (research and development).
• Pace: This is not a one-off initiative. The interaction is ongoing, taking place through cyclical industry roundtables, working meetings of technical specialists, and joint project design.

Resources and Preconditions

The practice relies on a combination of resources. Organizational (GR) activities are primarily funded through contributions from cluster members. However, grant funding and public funds are attracted for the implementation of specific technical audits or R&D projects.

The key prerequisite for success is the exceptionally high maturity of the cluster and the presence of a genuine, historically developed engineering potential in Sumy Oblast. The cluster has successfully “embedded” its initiative into the official regional smart specialization policy, which has added political weight in the eyes of the state monopoly.

“The future of nuclear energy is created where there is an engineering school. Sumy Oblast has one,” — Vladyslav Kondus, Executive Director of the NGO “Sumy Machine-Building Cluster of Energy Equipment.”

Results and Outcomes

The practice has generated results that go far beyond conventional equipment supply, transforming the region into a hub of energy innovation.

Short- and medium-term results: More than 10 machine-building enterprises and key higher education institutions in the region are engaged in systematic cooperation with Energoatom. Framework memoranda and agreements have been signed. A portfolio of engineering solutions has been developed, enabling the attraction of UAH 3.6 million from the Ministry of Education and Science for the development of components for next-generation energy systems.

Structural and ecosystem changes:

• Creation of consortia: The cluster initiated the establishment of the international consortium SYNETRIUM (with the participation of institutes of the National Academy of Sciences of Ukraine, as well as partners from the Czech Republic and Latvia).
• Shift to Deep Tech: A conceptual and engineering framework for the small modular reactor MRIYA SMR has been jointly developed. The university has secured its role as the core of the innovation ecosystem.
• Change in business behavior: Enterprises have abandoned the “waiting for a tender” approach. Instead, they began investing time and their own resources in the co-development of solutions (R&D) already at the stage of shaping customer needs. A shift has occurred from short-term contracts to long-term technological partnerships lasting decades.

Sustainability of the Practice

The practice demonstrates absolute sustainability. It does not depend on the completion of any single grant project or on personal preferences. The viability of the model rests on a solid foundation: the state has a critical need for energy security and independence from imports, while regional businesses need predictable, solvent demand. The institutionalization of roles ensures that this cooperation will continue for years.

Limitations and Risks

This case cannot be replicated “from scratch.” It comes with strict constraints:

• Extreme regulatory barriers: Nuclear energy does not tolerate errors. If cluster enterprises are unable to quickly adapt their production to the highest safety standards and obtain the necessary certifications, any GR efforts by cluster management will be futile.
• Political risks: Cooperation with a state monopoly always depends on shifts in government-level strategic priorities, which may suddenly “freeze” long-term agreements.

Lessons Learned and Recommendations for Clusters4Regions

This case is a benchmark example of how a cluster becomes a tool for implementing a regional recovery strategy and smart specialization.

Key lessons for scaling:

• Change the sales paradigm: To work with monopolies and critical infrastructure, a cluster must first “sell” its capability to guarantee safety, quality, and coordination — and only then the products of its members.
• Science as an equal partner: Integrating universities into the cluster is not a box-ticking formality. It is precisely the universities’ ability to conduct R&D that enables the cluster to offer the state innovative solutions (such as SMRs), rather than simply fabricating metal based on external designs.
• Not for beginners: Emerging initiatives should NOT start by lobbying their interests with state giants. The first step is to establish impeccable internal quality control among cluster members.

The presentation of the case study is available via the link:

This practice has been included in the Ukraine Best Practice Guide, which we are developing as part of the Clusters4Regions project.

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Clusters4Regions is an initiative aimed at designing and implementing cluster programs in six regions of Ukraine (Vinnytsia, Volyn, Sumy, Odesa, Khmelnytskyi, and Ternopil regions). The initiative is implemented by the Ukrainian Cluster Alliance at the request of the Ministry of Economy, Environment and Agriculture of Ukraine, with the support of the Swiss-Ukrainian project “Ukraine`s Cohesion and Regional Development” UCORD, and is aligned with EU priorities, international donor frameworks, and Ukraine’s recovery agenda.