Rebuilding Ukraine: A Call for Global Partnership and Innovation

The ongoing war in Ukraine has taken a devastating toll on its people, economy, and future prospects. However, amidst the chaos and uncertainty, there’s a pressing need to prepare for the eventual end of hostilities and the country’s recovery. From economic reconstruction to social healing, from political stability to deepening integration with the European Union (“EU”), the time to start preparing for Ukraine’s post-war recovery is now. It’s not just Ukraine and Ukrainians who must act; our international partners—potential investors, donors, and EU institutions—play a crucial role in this process. They must recognize the urgency and not follow a “wait until the war ends” logic. If the war were to end tomorrow, many stakeholders would not be ready to act.

The scale of the challenge is extraordinary. The Government of Ukraine, in partnership with the World Bank Group, the European Commission, and the United Nations, has estimated that the total cost of reconstruction and recovery in Ukraine will amount to $486 billion by December 31, 2033.[1] This amount is an increase from the previous estimate of $411 billion one year ago. The increase is due to extensive damage across different sectors, such as housing, transport, commerce, energy, and agriculture, exacerbated by environmental degradation and a refugee crisis. Over 5 million displaced Ukrainians are currently seeking refuge across Europe.[2]

The Ukrainian government has implemented several measures to address these challenges, including energy price controls, export restrictions, financial aid for local small and medium-sized enterprises (“SMEs”), strategic imports, and trade agreements. At the same time, the government is currently investing in infrastructure and supporting displaced persons to show its commitment to recovery. But more is needed. Past reconstruction efforts in other countries, such as the Marshall Plan in Germany, the industrialization drive in South Korea, and the economic diversification initiatives in Rwanda, do not provide a cookie-cutter approach because the circumstances in Ukraine are different. Truly innovative policymaking will be required – how do we recover the energy system affordably and quickly, and can some measures of market regulations beyond EU traditions be in place for some time after the war ends? Time is needed to plan the simultaneous recovery effort and further integration into the EU.

Post-war Ukraine requires an innovative investment framework, which might be a deviation from standard EU rules for some time. This necessitates the establishment of new public-private partnerships (“PPPs”) involving international donors and government participation. At the same time, given the social challenges, let’s be realistic that simply having a typical set of market rules will not make Ukraine attractive. Providing basic amenities like housing, electricity, security, healthcare, and education is crucial for returning displaced persons to Ukraine. Planning the sequencing of these efforts is not a simple task and has to be discussed and researched. Companies have to know what they want to bring to Ukraine and what they want as contributions, what they need as guarantees from the Ukrainian government, and which potential exemptions from the standard peace-time rules can be put in place.

The governments of EU member states and the largest companies in these countries should be drafting their strategies for Ukraine and their views on its recovery now.  They should be ready to say what new rules they will put in place, where they will grant exemptions, and how they will contribute Businesses should come with the right expectations and practical business plans. For example, creative solutions that lower costs for public goods should be explored to meet evolving needs and ensure sustainable recovery. Presently I only see general discussions of how great the future will be, with both sides needing more details.

Many projects will require international investment and the deployment of new technology and policies. The energy, infrastructure, agriculture, defense and security, heavy industry, and construction sectors are most in need of support.  At the same time, they also happen to be the most regulated and capital-intensive. Some funding mechanisms have already been announced: the investment framework via Ukraine’s Facility EU Support[3], the extension of Trade and Agriculture support via the EU’s Autonomous Trade Measures until June 2025[4], the use of the Assistance Fund and EUMAM Ukraine to strengthen the Ukrainian Armed Forces[5], the use of The Ukraine Energy Support Fund[6] to fund critical energy infrastructure repairs, and support from the New European Bauhaus and Connecting Europe Facility [7] for reconstruction and integration efforts.  

With all the above, key questions remain for European and Ukrainian companies. Which recovery projects do they want to undertake? When should they start, and what can they do in advance? How will projects be funded? Then, with respect to partnerships, what would be the ideal partnership structure for the project? Around resources, in addition to financial resources, what are the human and knowledge resources necessary to carry the project forward? Finally, what political and legislative decisions are needed from the European and the Ukrainian sides to make the project viable? For instance, will it require massive preparation, due diligence, and assessments, as well as changes in legislation to accomplish?

Finding the correct answers and communicating them with all the stakeholders is essential and requires time and effort. Regardless of when the war ends, we’ll need to prepare for recovery. The more we can do in advance to prepare projects for later, the less painful it will be for Ukraine and its people and the more beneficial it will be for all the partners involved.

Author: Olga Bielkova, Senior Advisor in the Energy & Industrials team in Brussels.








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