Direct damage caused to Ukraine’s infrastructure during the war has reached over $94 billion

11 May 2022

Total economic losses since the beginning of the war are estimated at $564-600 billion or above

As of May 10,  the total amount of direct documented infrastructure damages, based only on public sources, is over $94 billion or almost 2.8 trillion hryvnias. Over the past week, the direct losses of Ukraine’s economy due to the destruction and damage to civilian and military infrastructure increased by over $2.4 billion.

This can be seen from the analysis carried out within the “Russia will pay” project by the KSE Institute team (the analytical unit of Kyiv School of Economics) with the support of  the Presidential Office, the Ministry of Economy, the Ministry of Reintegration of Temporarily Occupied Territories and the Ministry of Infrastructure. The project team also includes volunteers from the Center for Economic Strategy, Dragon Capital, the Anti-Corruption Headquarters, Institute of Analysis and Advocacy, Transparency International Ukraine, Prozorro.Sale, Prozorro and Ukrainian Council of Shopping Centers. 

According to new estimates, the largest increase in losses was the growth in the number of damaged and destroyed residential buildings as a result of hostilities. As estimated by the project analysts, 35.2 million square meters of the housing stock were destroyed or damaged due to the war. The total amount of damage is $31 billion. Compared to the previous calculations, the figure increased by almost $1.3 billion. Cities such as Mariupol, Kharkiv, Chernihiv, Sumy and Rubizhne suffered the most from the destruction of the housing stock.

In the current calculations, KSE’s estimate of losses from destruction and damage to oil depots has been added. As of May 10, the losses from the destruction of 27 oil depots amount to $227 million. In addition, according to the latest estimates within the project “Russia will pay” the total number of destroyed or damaged educational institutions is almost one thousand, and losses reach $1.3 billion.

Since the beginning of Russia’s war against Ukraine, at least 208 factories and enterprises, 508 healthcare institutions, 562 kindergartens, 156 warehouses, 992 educational institutions, 295 bridges and bridge crossings, 102 religious buildings, 83 administrative buildings, 27 oil depots, and 12 civilian airports and have been damaged, destroyed or seized. 

As estimated by the Ministry of Economy and KSE, the overall Ukraine’s economic losses due to the war, taking into account both direct losses calculated in this project and indirect losses (GDP decline, investment cessation, outflow of labor, additional defense and social support costs, etc), range from $564 billion to $600 billion. 

The project focuses on assessing the damage caused to Ukraine’s physical infrastructure during the war (destruction of residential buildings, utilities, roads, railways, educational and medical facilities, etc.); and estimating the financial value of these damages. The project does not assess total economic losses, including not only direct infrastructure losses but also numerous “incidental” costs to the economy due to the war (closure of many businesses; loss of hundreds of thousands of homes and jobs; termination of any investments; reduction of consumer demand, etc.).

Every citizen or legal entity can also submit information about the loss of physical infrastructure, including residential buildings, due to the war. For this purpose, the KSE Institute team has created the RUSSIA WILL PAY resource (https://damaged.in.ua/), where every citizen can submit data on damage to buildings, businesses, roads, and other facilities right now. Everyone can also submit information about damages using the chatbot.

Methods for evaluating financial losses from damage to the project:

These calculations are based on the analysis of several thousands of public notifications from Ukrainian citizens, the government, local authorities about losses and damages throughout the country, as well as indirect assessment methods such as calculating the estimated area of the war-damaged property in the most affected cities. 

The methodology also includes the World Bank’s experience in analyzing losses in Syria and Iraq, as well as the recommendations of the leading Ukrainian investment company Dragon Capital. We are going to continue this work in the future, which will allow us to detail the assessment of the object by regions and types of buildings, losses of utilities and infrastructure, etc.

Indirect methods of estimating the value of destroyed residential real estate have been used due to the lack of regular public updates on the total number of destroyed and damaged dwellings, in particular by region and the number of private / apartment buildings. Also, the assessment of the value of damaged and destroyed housing now also includes the assessment of the need for expenditures for the dismantling of destroyed buildings and repairs in the buildings to be built. The valuation of the assets of enterprises no longer takes into account depreciation and added work in progress and inventories. Receipt of updated and detailed data from the Ministry of Infrastructure on the current amount of damaged/ destroyed infrastructure objects, as well as their replacement value.

These estimates are not exhaustive: information on numerous damages and destruction may be missing due to the inability of citizens, and local and state authorities to promptly record the damage in each city and town. Also, due to the lack of information at this stage, the assessment includes only losses from destruction/ destruction of buildings, not taking into account the cost of equipment (including hospitals, research institutions, damaged vehicles, etc.). These estimates will be gradually added in the next stages of updating the indicator.

Currently, the evaluation does not take into account information on damage to natural resources, animal husbandry, stocks of companies (in warehouses, shops, etc.), moveable property, military property, telecommunication operators’ property, etc. caused by combat and mining operations. This information will be supplemented and clarified after the end of hostilities in the relevant regions of Ukraine.