$349 bn needed to rebuild Ukraine — World Bank

A bear on the place of the kindergarten that was destroyed by Russian shelling of Kharkiv on 9 September 2022. Photo by rescuers. 

Russo-Ukrainian war 2022

Editor’s Note

World Bank, EU Commission and Ukraine’s government, in cooperation with partners, released a joint report summarizing the estimated cost of reconstruction and recovery in Ukraine due to Russian aggression. Currently it amounts to at least $349 billion and this figure is expected to grow in the coming months as the war continues. $17 billion are needed only for the first step of rapid recovery. The total sum exceeds Ukraine’s 2021 GDP 1.5 times.

The Rapid Damage and Needs Assessment (RDNA) presents the first comprehensive evaluation of war impacts across twenty different sectors following the Russian invasion. It also lays out the financing needs for a resilient, inclusive, and sustainable recovery and reconstruction and provides a roadmap for planning.

President of the European Commission Ursula von der Leyen said about the EU support:

Ukraine is fighting for democracy and our common values. The EU cannot match the sacrifice Ukraine is enduring but we are mobilising all our instruments to address the most immediate needs, including for housing for internally displaced populations and to repair critical infrastructure. Since the start of Russia’s brutal and illegal war of aggression against Ukraine, the EU has mobilised 10 billion euro in financing, humanitarian, emergency and military assistance for Ukraine and another 5 billion euros in financing are in the pipeline. The EU will walk every step of the way with Ukraine to rebuild a democratic, independent and prosperous country on its path to the EU.”

The Prime Minister of Ukraine Denys Shmyhal commented on the progress and needs of the reconstruction, saying $17 billion are needed only for the first step of rapid recovery:

“With joint efforts, we have already started reconstruction in the de-occupied Ukrainian territories, but reconstruction requires a comprehensive approach and the mobilization of joint resources of the Ukrainian government and international partners. The assessment of the destruction and the identification of reconstruction needs creates a solid basis for the national Reconstruction Plan and is a prerequisite for effective financing. After all, only for the first stage, rapid recovery, $17 billion is needed, of which Ukraine needs $3.4 billion already this year.”

Some first steps towards the reconstruction of the critical infrastructure in the country’s north were already made, but this is only the beginning:

The assessment that covers the impacts of the war sustained between February 24 and June 1, 2022 found that physical damage from the war reached over $97 billion. It was particularly high in the housing, transport, commerce and industry sectors. The destruction was concentrated in the Chernihivska, Donetska, Luhanska, Kharkivska, Kyivska, and Zaporizka oblasts.

The RDNA results are preliminary, and damage and needs should be considered as minimums.

The Russian invasion of Ukraine continues to exact a terrible toll, from significant civilian casualties and the displacement of millions of people to the widespread destruction of homes, businesses, social institutions, and economic activity,” said Anna Bjerde, World Bank Regional Vice President for Europe and Central Asia. The Government of Ukraine now faces the difficult task of balancing recovery with the country’s immediate needs, including core public services such as health, education and social protection, which are critical to preventing further deterioration in living conditions and poverty in Ukraine. The RDNA will help in identifying priorities for recovery while we continue to support the continuation of essential core services.”

The report found that recovery and reconstruction needs across social, productive, and infrastructure sectors total $349 billion, which is more than 1.5 times the 2021 GDP of Ukraine. Over the next 36 months the RDNA assesses that $105 billion is needed to address urgent needs such as restoring education and health systems and infrastructure, preparing for the upcoming winter through restoration of heating and energy to homes, support to agriculture, and repair of vital transport routes. The safe management of debris and explosives, including landmines, also pose a substantial cost.

The Government of Ukraine is looking at the specific needs across the different regions ahead of the winter. Based on the highest priorities, tailored recovery and reconstruction plans are being developed to guide a program in each area.

The World Bank and the European Commission confirmed their continued support for the Government of Ukraine. Given the ongoing war, there will be a need for future assessments of damage, loss and reconstruction/recovery needs in Ukraine. The Swiss State Secretariat for Economic Affairs (SECO) has committed financial support for this purpose.

The Ukraine RDNA full report can be downloaded here (Ukrainian version full report downloadable here). Summary reports: English version, Ukrainian version.

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