KSE Institute Highlights Ukraine’s Recovery Vision and Kakhovka Dam Explosion Damages in the Ukrainian Recovery Digest Special Edition

11 July 2023

KSE Institute has released the Ukrainian Recovery Digest Special Edition , which focuses on two main topics: the recovery vision of Ukraine presented at the Ukraine Recovery Conference 2023 (URC 2023) in London and the impact of the Kakhovka Dam explosion.

The government’s Economic recovery vision of Ukraine, presented at the Conference in London, sets a strategic goal of reaching a GDP of US$1 tn by 2033. This economic growth will enable investments in defense, education, healthcare, and social services without straining the state budget. Experts estimate the Ukrainian recovery market to be US$500-900 bn over the next decade. The vision entails comprehensive development in sectors where Ukraine holds strategic advantages, addressing both domestic needs and global goals such as food security, carbon neutrality, and technological progress. Priorities for rebuilding and attracting investment include NATO and EU membership for security and access to large markets. Additionally, Ukraine is committed to implementing domestic reforms to foster an optimal business environment in the region.

The URC 2023 played a crucial role in mobilizing international support for Ukraine’s post-war recovery. The EU and G7 countries pledged around EUR 55bn, with the EU committing EUR 50bn to cover 45% of Ukraine’s financial gap until 2027. Memos of support were signed with organizations like EBRD, IFC, DFC, MIGA, and British International Investment, expanding trade financing for Ukrainian projects. The launch of a military risk insurance market was announced by EBRD, Switzerland, and Great Britain. The Ukrainian Development Fund (UDF), supported by Blackrock, J.P. Morgan, and McKinsey, was established to attract capital for reconstruction across key sectors.

As of the end of May 2023, direct damages to Ukraine’s infrastructure, as presented by the “Russia Will Pay” project, amount to $147.7bn (at replacement cost), with monthly growth estimated at a lower rate of $200m. However, the Kakhovka HPP Dam explosion in June has significantly altered the situation, adding at least $2bn in damages. The restoration of a new HPP of similar capacity would require nearly $1bn. Additionally, damages to the transport infrastructure total $311m, while the industrial sector, other businesses, and the agricultural sector have incurred damages estimated at $105m, $25m, and $182m per year, respectively.

You can find a full text of the Ukrainian Recovery Digest Special Edition via the following link: https://t.ly/Y-aQz 

This digest has been made possible through the generous support of the European Union. It encompasses research findings that have been obtained as a result of the various projects undertaken by the Kyiv School of Economics, with additional assistance provided by the Government of Great Britain (UK Aid), the US Agency for International Development (USAID), the International Renaissance Foundation, and the World Bank.