Since the outbreak of the Russian-Ukrainian war on 24 February 2022, Russia has destroyed more than 350,000 objects in Ukraine. According to the latest World Bank survey, the value of direct damage amounts to $176 billion, while the estimated cost of reconstruction is $524 billion. The most affected regions are Donetsk, Kharkiv, Luhansk, Zaporizhzhia, Kherson and Kyiv, which account for 72% of the damage, while the Ukrainian government has already completed the restoration of 100,000 objects. How can the restoration of the country destroyed to such an extent be financed, and what are the most important steps to take to achieve this?
How much does reconstruction cost?
The World Bank’s RDNA4 report provides a thorough picture of the financial impact of the Russian-Ukrainian war: the direct damage since the start of the war amounts to $176 billion, affecting a wide range of infrastructure, the economy and social systems. The most significant losses are in the housing sector (33% of total damage), which clearly reflects the direct impact on the civilian population. This is followed by transport infrastructure (21%), where damage is hampering mobility and logistics processes. The energy and raw materials extraction sector (12%) has also suffered serious damage, particularly after the shutdown of gas transit due to targeted attacks on Ukrainian gas extraction facilities. Trade and industry (10%) have also been affected, as the loss of production leads to an economic downturn. Agriculture has not escaped losses either, especially in the eastern regions, where farmland and agricultural infrastructure have been severely damaged.
The figure can be downloaded here: https://public.flourish.studio/visualisation/25428493/
The total cost of recovery – which includes repairing direct damage, compensating for economic losses, restoring production capacity and rebuilding social systems – is estimated by the World Bank at $524 billion over the next ten years. This amount can change dynamically, as the prolongation of the war or attacks on new infrastructure targets could further increase the damage.
The figure can be downloaded here: https://public.flourish.studio/visualisation/25428319/
The geographical distribution of the damage is also noteworthy: the most affected regions – Donetsk, Kharkiv, Luhansk, Zaporizhzhia, Kherson and Kyiv – have suffered 72% of the direct damage, amounting to $127 billion. A significant part of the reconstruction efforts must focus on these areas. Although, according to Ukrainian government data, 100,000 of the 350,000 destroyed objects have been restored so far, the volume of remaining tasks remains enormous, requiring significant international support.
The figure can be downloaded here: https://datawrapper.dwcdn.net/32NsS/2/
Who is financing Ukraine's recovery now?
Ukraine's reconstruction plans for 2025 are extremely ambitious, but they face a significant funding gap. According to the World Bank report, the estimated reconstruction needs for 2025 are $17.3 billion, of which only $7.4 billion is currently available. Housing construction, energy and transport are areas where reconstruction must be carried out continuously and rapidly, and the necessary funds must be provided on an ongoing basis.
The current financing of Ukraine's reconstruction is based on a multi-stakeholder system, consisting of the Ukrainian state budget and contributions from international financial institutions and donor countries. The $7.4 billion available comes partly from state resources and partly from a combination of loans and grants. Many donor countries are also actively involved in the financing, providing both non-repayable grants and concessional loans (the latter accounting for around 60%). The European Union, for example, has set up the Ukraine Facility, which will provide €50 billion in support to Ukraine between 2024 and 2027 in the form of loans (€33 billion) and non-repayable grants (€17 billion). Various countries are also providing ongoing financial support to Ukraine, but it is important to note that these contributions often serve multiple purposes (military aid, humanitarian aid, budgetary support) and are not exclusively aimed at reconstruction. According to the Kiel Institute for the World Economy in Germany, approximately 48% of the total international aid provided between 24 February 2022 and 30 April 2025 was military, 45% was financial and 7% was humanitarian in nature, but within this, the estimated amount allocated for reconstruction over three years is less than €15 billion.
The figure can be downloaded here: https://public.flourish.studio/visualisation/25428613/
International financial institutions also play an important role in this process, mobilising significant amounts of money, primarily for infrastructure support. The problem for Ukraine is that the money comes exclusively in the form of loans, albeit with favourable interest rates (between 0.25% and 3%) and long maturities (20-30 years, which will be activated after the end of the war).
- World Bank: €4.56 billion since 2022, mainly through the Ukraine Relief, Recovery, Reconstruction and Reform Trust Fund (URTF), which finances infrastructure and social projects.
- European Bank for Reconstruction and Development (EBRD): €7 billion, focusing on investments in energy, transport and the private sector.
- European Investment Bank (EIB): €3.17 billion, mainly for transport and housing projects.
- Council of Europe Development Bank (CEB): €3.2 billion to support social infrastructure and refugee programmes.
- International Bank for Reconstruction and Development (IBRD): €9.8 billion, covering a wide range of infrastructure and economic recovery projects.
Who will finance Ukraine's recovery in the future?
The process of rebuilding Ukraine in the future still raises many questions. There are no detailed, final plans yet on exactly how the country will be rebuilt or which areas will be prioritised. Currently, there are only smaller projects where individual countries have committed to joining the reconstruction of specific towns after the war ends: for example, Turkey will rebuild Kharkiv, France will rebuild Odessa, Denmark will rebuild Mykolaiv, and Lithuania will rebuild Bucha. However, even these plans are not final.
What is certain is that the lion’s share of the reconstruction will be carried out and financed by the European Union and its member states. Donald Tusk, Prime Minister of Poland, recently announced:
"There is nothing wrong with saying that we want to make a lot of money for Poland from the reconstruction of Ukraine... We want to help, but we also want to profit..."
Ukraine hopes that the United States and the European Union will be able to use the frozen Russian assets (approximately €200 billion) and it will not just receive the interest on them as compensation, which will be used for reconstruction. This method is not legally straightforward, and it is clear that EU allies are also unable to reach a consensus on this issue. In light of all this, post-war reconstruction remains a complex task and, at least for the time being, its implementation remains uncertain.
Anton Oleksiy is currently a Master's student in Political Science at the Faculty of Law and Political Science, Eötvös Loránd University. Previously, he worked as an intern at the Hungarian Institute of Foreign Affairs, where he focused on the political situation in the post-Soviet space.
He specialises in international relations and diplomacy, in particular political and economic developments in the post-Soviet states.
