In Lugano, Switzerland, Ukraine presented a post-war reconstruction plan worth more than $750 billion, which will include 850 projects to rebuild the country.
Russian aggression brings with it critical consequences for the Ukrainian economy and infrastructure. In early June, according to the Ministry of Economy, the amount of documented damage to Ukraine’s infrastructure reached 3 trillion hryvnia, or $103.9 billion. Since then, the Russians have destroyed a shopping center in Kremenchug, recreation centers in the Odessa region, and continued shelling other peaceful Ukrainian cities on a daily basis.
On Monday, a conference on the restoration of Ukraine opened in Lugano, Switzerland. At it, Ukraine presented a post-war reconstruction plan worth more than $750 billion, which will include 850 projects to rebuild the country. More than 40 states and 20 international organizations are invited to participate in the conference.
Plan for 10 years
The plan is designed for 10 years – from 2023 to 2032 – and will take place in two waves. The first will last in 2023-2025, in which it is planned to implement most of these projects – 580. These three years will cost more than $350 billion.
The second wave will contain fewer projects, but will require more funding – more than $400 billion. At the same time, the plan stipulates that Ukrainian economy will grow by 7% annually within 10 years.
The most expensive programs are the rehabilitation and modernization of housing and infrastructure in the regions, which will cost $150-250 billion, as well as the expansion and integration of logistics with the EU, which will cost $120-150 billion. The need for energy independence and a green course reaches $150 billion.
Macro-financial stability will require $60–80 billion, and $75 billion to ensure competitive access to capital. The development of sectors of the economy with added value requires 50 billion dollars, the same amount – the defense sector.
Other large-scale programs include the restoration and modernization of social infrastructure and the development of cultural and sports systems, the funding of which is estimated at 20-35 billion dollars each.
Part of the funds is needed already in 2022. We are talking about programs to ensure macro-financial stability, modernize regions, and ensure access to finance and defense and security. With the exception of defense and security, Ukraine needs $60-65 billion this year, some of which has already been provided or allocated.
The total amount of $750 billion is planned to be financed as follows:
– $250-300 billion through partnership grants for defense, critical emergency funding, housing and other rehabilitation, infrastructure development as part of the EU.
– $200-300 billion in loan funds from partners, of which will finance infrastructure upgrades, energy projects, support for the financial system and co-financing of private investments.
– $250 billion through private investment in infrastructure projects, value-added sectors and other commercially viable investments.
President Volodymyr Zelenskyy, during his online address to the conference in Lugano, named the key principles of recovery, including: safety, technology, compliance with environmental standards, the use of green technologies, the implementation of the principles of accessibility, focus on the interests of communities, maximum transparency and the implementation of the recovery project in the real economic life of Ukraine in order to create new jobs and new industries in Ukraine.
Zelensky stressed that Ukraine has received the status of an EU candidate, which will require reforms.
“The movement towards full membership implies reforms, but the restoration of Ukraine also implies reforms. We must further strengthen our institutions, update living standards. Our goal is for Ukraine to become not only the freest country in Europe, the most convenient for life and business but also so that we can complete the political part of the work faster than anyone else who is moving to the European Union. We can do it,” the president said.
He added that the restoration of Ukraine “will be a great reform for us, because we are all uniting the democratic world together.”
Swiss President Ignazio Cassis said that the so-called Lugansk Declaration – the final document of the conference – will lay down the basic principles of restoration. He noted that this should be an effective and transparent process, inseparable from the path of reforms, with regulated management principles, clear criteria for providing assistance and the distribution of roles between Ukraine and helping states and organizations.
The President of Switzerland noted that the pre-war plan of the conference, which emphasized the continuation of institutional reforms, and the updated one, where the issue of restoration came first, do not contradict, but complement each other.
“I share the opinion that the stability of Ukraine is largely the result of the reforms that have already been implemented. It is important that these efforts continue, especially in the area of fighting corruption, increasing the transparency and independence of the judiciary, so that reforms do not stall due to wars. These two cornerstones, reform and recovery, reinforce each other… Reform, sustainability and recovery form one whole,” said Ignazio Cassis.
European Commission President Ursula von der Leyen at the conference announced the creation of an EU platform for the restoration of Ukraine after the war unleashed by Russia.
“We have already proposed to the government of Ukraine the creation of a platform for determining the direction of recovery, which would bring together all the partners. Ukraine will take the leading place in it,” von der Leyen said.
According to her, the platform will determine the strategic directions and priorities for the restoration of Ukraine. Its focus will be “a future-assured recovery rooted in good governance.”
“After all, the aspirations and desires of the Ukrainian people will be the engine of our actions,” the President of the European Commission emphasized.
The platform will bring together the world’s leading experts and thinkers on recovery issues, and “after the summer” von der Leyen, together with international partners and German Chancellor Olaf Scholz, plans to organize a high-level conference on this issue.