During the week, the damage caused to Ukraine’s infrastructure in the war increased by $3.1 billion

19 May 2022

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

During the last week, direct losses to civilian infrastructure documented based on publicly available evidence (that is, this is a lower bound estimate and the true losses are likely to be times higher), increased by $3.1 billion. As of May 19, the total amount of direct documented infrastructure damages, based only on public sources, is $97.4 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, the Ministry of Infrastructure and the Ministry for Communities and Territories Development. 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, Ukrainian Council of Shopping Centers, CoST Ukraine, Vkursi Agro and TVIS Ukraine.

For the third week in a row, as a result of hostilities, the losses from damaged and destroyed residential buildings continue to grow. According to analysts, the amount of damage due to the destruction of the housing stock increased by almost $3 billion. As of May 19, 38.6 million square meters of housing stock were destroyed or damaged. The total amount of this damage has reached $33.9 billion. 

Total losses from destruction and damage to industrial enterprises also increased by $272 million over the last week, and the total amount is $10.7 billion. Since the beginning of the war 219 plants, factories, and enterprises have been destroyed, damaged, or seized.

Furthermore, over the last week, another 75 educational institutions were damaged and destroyed, with a total of 1,067 since the beginning of the war. The damage caused to educational facilities is almost $1.5 billion. According to the latest estimates within the project «Russia will pay», at least 94.5 thousand private cars were destroyed, damaged, or seized.  

Since the beginning of Russia’s war against Ukraine, at least 12 civilian airports, 295 bridges and bridge crossings, 591 kindergartens, 574 healthcare institutions, 108 religious and 179 cultural buildings, 169 warehouses and 19 shopping malls. 

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.