The direct damages caused by the explosion at the Kakhovka Hydroelectric Power Plantcould exceed $2 billion. The tragedy has resulted in significant damages to the residential and communal sectors, as well as the energy sector, and has caused significant indirect losses to agriculture due to the loss of irrigation in the region. This is indicated by the first analysis conducted within the “Russia Will Pay” of the KSE Institute (the analytical division of the Kyiv School of Economics) in cooperation with the Office of the President of Ukraine, Ministry of Economy and Ministry for Communities, Territories and Infrastructure Development of Ukraine.

The housing sector has suffered losses in the settlements of Kherson and Mykolaiv regions: 49 and 31 cities, towns, and villages, respectively. In the Mykolaiv region, over 500 private houses in rural areas have been flooded. In the Kherson region, it is not possible to determine the exact total number of damaged or destroyed residential buildings accurately due to the partial temporary occupation of the region. However, preliminary estimates suggest that approximately 20,000 to 30,000 houses* have been affected by flooding, including at least 150 multi-story buildings in the city of Kherson. Direct damages from the flooding of private houses and related infrastructure are estimated at $950 million, with the majority concentrated on the left bank of the Dnipro River, which is currently under temporary occupation. This initial rapid assessment of potentially flooded residential buildings was conducted by calculating the data on the population before the invasion. However, currently, an evaluation is underway to determine the number and area of flooded buildings through satellite imagery analysis and modeling, which, as of today’s calculations, has identified 32,000 buildings at risk within the affected zone.

Additionally, Ukraine will incur expenses in 2022 for the construction of water pipelines. Due to the decrease in the water level in the Kakhovka Reservoir, a significant part of the Dnipropetrovsk, Zaporizhia, Mykolaiv, and Kherson regions may be left without water supply. To address the consequences of the destruction of the hydroelectric power station, the budget committee has approved the allocation of $41 million (1.5 billion UAH) for the construction of main water pipelines.

The energy sector accounts for over a quarter of the total damages caused by the explosion at the hydroelectric power plant, amounting to $586 million. Total damages to the sector are $624 mln. These damages are directly related to the destruction of the Kakhovka HPP, which has a capacity of 334.8 MW and is not recoverable, as well as the dam. The annual economic losses incurred by the state-owned company Ukrhydroenergo due to the destruction of the power station exceed $100 million. The restoration needs for the new hydroelectric power plant of the same installed capacity would amount to nearly $1 billion.

Additionally, as a result of the flooding, electrical grids have been lost in the affected settlements, and 17 fuel stations and 2 oil depots have been flooded.

The damages inflicted on the transport infrastructure have reached $311 million. According to expert assessments, over 290 km of roads have been affected by the flood. Some international and regional roads have been submerged. The most severely damaged are the municipal roads, accounting for over 50% of the total length. On the right bank of the Dnipro River, the traffic through main roads was restored by June 19, 2023. Additionally, in the initial days following the dam explosion, some bridges and smaller dams in the Mykolaiv and Kherson regions were temporarily flooded, which may have also had a long term effect on its cost.

The industrial sector and other businesses have incurred damages amounting to an estimated $105 million as a result of the explosion. The flood-related damages to businesses were significantly mitigated by the fact that some enterprises had relocated earlier or ceased operations due to the ongoing conflict. It is assumed that the most affected assets include heavy equipment that could not be transported and buildings. Among them are large industrial facilities located in the Korabelny district of the city of Kherson. The local administration reported that 28 major industrial facilities located on both the right and left banks of the Dnieper River have been flooded.

The destruction of crop plantations, livestock, and fish stocks has resulted in agricultural damages of $25 million. The size of damages was limited due to the constant shelling of the territories since the start of the full-scale invasion, which has hindered the active utilization of agricultural land, and due to the relatively small area of agricultural lands affected by the flood.

The Kakhovka Reservoir was used to supply water for irrigation systems and livestock farming across a total area of 584,000 hectares (the actual irrigated land area before the war was 262,000 hectares). As a result, indirect losses for crop production are projected to increase by $182 million annually. Other sectors of the industry will be losing up to $49 million per year.

Separately the estimated amount of losses caused to the environment is approximately $1.5 billion (according to the Ministry of Environmental Protection and Natural Resources). Around 150 tons of oil leaked during the dam explosion. The salinity level of the Black Sea near Odessa is nearly three times lower than the norm.

Three nature reserves, namely “Nizhnedniprovsky,” “Kam’yanska Sich,” and “Byloberezhzhya Sviatoslava,” are at risk of flooding. Additionally, the Black Sea Biosphere Reserve, which is protected by UNESCO, is also within the affected area. Furthermore, the Regional Landscape Park “Kinburn Spit” with a total area of nearly 18,000 hectares, sections of the Black Sea Biosphere Reserve including Volizhin Forest, Long Island, and Round Island with a total area of 2,700 hectares, as well as the Regional Landscape Park “Visunsko-Inhuletsky” with an area of 2,700 hectares, have been impacted by the flooding.

*The assessment of flooded houses was carried based on the assessment of the population before the invasion. However, currently, an evaluation is underway to determine the number and area of flooded buildings through satellite imagery analysis and modeling, which may reveal a larger number of affected objects.