Key Points and Summary – The estimated cost to rebuild Ukraine after more than three years of war has skyrocketed, with the latest figures now approaching a staggering $1 trillion.
-This number has more than doubled in less than a year, climbing from an initial estimate of $486 billion.
-The massive price tag is driven by the ongoing destruction of critical infrastructure, particularly in the energy and housing sectors.
-To meet this immense challenge, international partners, led by the European Commission, are establishing “megafunds” to leverage public and private investment for what will be one of the largest reconstruction efforts in modern history.
How Much Will It Cost to Rebuild Ukraine?
When it comes to estimating how much it will cost, post-war, to rebuild Ukraine, the number keeps going up. And as long as the war continues, it’s likely to continue to do so.
Back in October of 2024, the German Marshall Fund of the United States (GMF) released a report titled “Pricing Ukrainian Reconstruction: A Blueprint for Accountability and Progress.” That report listed a price tag of $486 billion for reconstruction, over ten years.
$486 Billion?
“Ukraine faces immense challenges in rebuilding its infrastructure amid the ongoing war with Russia, with the total cost of reconstruction and recovery estimated to be $486 billion over the next decade,” the report said. “The urgency to improve the country’s construction pricing system is building, as the current framework has failed to keep up with the demands of large-scale reconstruction.”
The report had several recommendations, which included “Adopt International Construction Measurement Methods and Classification Systems,” “Revise National Cost Estimating Methodologies,” “Implement Necessary Electronic Systems,” and “Develop an Action Plan to Prevent Excessive Inflation in Public Construction.”
$524 Billion?
By the following February, the United Nations had put out its own multi-agency report, estimating that reconstruction would cost $524 billion.
That was according to a Rapid Damage and Needs Assessment, which was “commissioned by the Ukrainian Government, the World Bank Group, the European Commission and the UN.”
“In the past year, Ukraine’s recovery needs have continued to grow due to Russia’s ongoing attacks,” Prime Minister Denys Shmyhal was quoted as saying in the report. And that includes major damage to the nation’s housing stock.
“Thirteen per cent of all housing stock in the country has been damaged or destroyed, affecting more than 2.5 million households. The energy sector has also experienced a 70 per cent increase in damage or destroyed assets, including power generation, transmission, distribution infrastructure, and district heating.”
“The true cost of war is measured in human lives and livelihoods,” the UN Humanitarian Coordinator in Ukraine, Matthias Schmale, said in that report.
“This means investing in dignified jobs, education, healthcare, and prioritizing the inclusion of vulnerable groups among women and girls, children, displaced people, Roma communities, war veterans, and persons with disabilities.”
$1 Trillion?
By last month, the estimated reconstruction figure had nearly doubled, into the trillions.
United 24 Media reported in July, citing DW, that Prime Minister Shmyhal had “told international partners in Rome that rebuilding Ukraine’s war-torn economy and infrastructure will require roughly $1 trillion.”
“Reconstruction is not just about rebuilding what was lost,” Shmyhal said, as reported by DW. “It is an opportunity to modernize our infrastructure, diversify our energy sources, and strengthen the resilience of our communities.”
United 24 broke down the prime minister’s estimates of how that is broken down:
“Nearly $400 billion for energy-sector rehabilitation, $300 billion for housing and urban infrastructure, $200 billion for transport corridors and logistics, and $100 billion for social services and public institutions.”
The prime minister proposed the establishment of a “Ukraine Rebuilding Facility” to help facilitate the rebuilding.
A “Megafund”
The European Commission had earlier announced a new “megafund,” which is called the European Flagship Fund for the Reconstruction of Ukraine.
European Commission President Ursula von der Leyen, in July, described it as “the largest equity fund globally to support reconstruction. It will, together with the private sector, kickstart investment in energy, transport, critical raw materials, dual-use industries… we are taking a stake in Ukraine’s future by leveraging public money to bring large-scale private sector investments and help the rebuilding of the country.”
The fund will have the backing of the European Commission, France, Germany, Italy, and Poland, as well as the European Investment Bank (EIB), Kreditanstalt für Wiederaufbau (KfW), Cassa Depositi e Prestiti (CDP), Proparco & Bank Gospodarstwa Krajowego (BGK).
The fund is planning “first closing of up to €500 million by 2026.”
About the Author: Stephen Silver
Stephen Silver is an award-winning journalist, essayist, and film critic, and contributor to the Philadelphia Inquirer, the Jewish Telegraphic Agency, Broad Street Review, and Splice Today. The co-founder of the Philadelphia Film Critics Circle, Stephen lives in suburban Philadelphia with his wife and two sons. For over a decade, Stephen has authored thousands of articles that focus on politics, national security, technology, and the economy. Follow him on X (formerly Twitter) at @StephenSilver, and subscribe to his Substack newsletter.
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