Direct losses to civilian infrastructure, only those documented based on publicly available evidence, over the last week alone are over USD 5 billion

01 April 2022

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

As estimated by the Ministry of Economy and KSE, total economic losses since the beginning of the war are at least $564-600 billion. These losses take 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).

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), over the last week alone are over USD 5 billion. As of April 1, the total amount of damages is $68,2 billion.

This can be seen from the analysis carried out by the KSE Institute team (the analytical unit of Kyiv School of Economics) within the framework of the Russia will pay project and volunteers from partner organizations, in particular, from the Center for Economic Strategy, the Anti-Corruption Headquarters, Institute of Analysis and Advocacy, Transparency International Ukraine and Prozorro.Sale.

Since the beginning of Russia’s military aggression on February 24, at least 533 institutions of secondary and higher education, 300 kindergartens, 196 healthcare institutions, 129 factories/ warehouses. The Ministry of Community and Territorial Development estimates that 6,800 residential buildings were damaged or destroyed. According to the KSE Institute, the total amount of damaged / destroyed residential real estate is about 26 million square meters.

In addition, 54 administration buildings, 260 bridges and bridge crossings, 10 military airfields, 8 airports, 2 ports were damaged by the war. During full-scale Russia’s invasion, the occupiers caused damage to Ukraine, destroying or damaging 64 religious buildings and 51 cultural objects.

As part of the preparation of update calculations, detailed data from the Ministry of Health allowed clarifying and in some cases reducing the assessment of damages.

Over the last week, no updated aggregate data have been received on the total length of the damaged railway lines, as well as data on the damaged property of railway stations and railcars. Therefore, the calculation was not updated compared to the previous week.

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.).

As estimated by the Ministry of Economy and KSE, the total 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), ranges from $564bn to $600bn.

* Revaluation is caused by using gross (not depreciated) capital stock instead of net capital stock (book value)

** Revaluation is caused by using a more precise estimate of an average unit cost. We are going to further update methodology for this group in the next release.

***The previous release erroneously stated the number of damaged state roads only, although the calculation of the cost of damages also took into account local roads and municipal roads. The total length of damaged roads according to the Ministry of Infrastructure on March 18 was 22,115 km. This mistake was fixed in the current release, updated data on damaged roads in three categories are 22,644 km of roads.

Every citizen 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.

The number of medical facilities that were damaged / destroyed (taking into account data from the Ministry of Health) has been specified, as well as the average cost of one medical institution, based on the analysis of financial statements of the identified health facilities and average prices for the construction / reconstruction of new hospitals, according to the tenders in the Prozorro system.

In the new release we excluded from the assessment the cost of Zaporizhzhya NPP, given that the extent of its damage, according to Energoatom, is not significant, and is one that is difficult to determine.

These estimates are not exhaustive: information on numerous damages and destruction may be missing due to the inability of citizens, 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.