CEPS EXPLAINER

EXPLAINING UKRAINE’S RECOVERY

AND RECONSTRUCTION:
WHAT, HOW AND WHEN?

Tinatin Akhvlediani

2024-05
SUMMARY
Russia's full-scale invasion of Ukraine has resulted in colossal human loss. According to
the World Bank, this has already in 2023 amounted to 26 000 civilian casualties, the
displacement of around 3.7 million people internally within Ukraine and around 5.9
million externally in Europe and beyond. The war has pushed 7.1 million people into
poverty and reversed 15 years of economic development. This is reflected in the drastic
increase in inequality, particularly among women, children, people with disabilities and
elderly.

This CEPS Explainer aims to review what is at stake, how Ukraine’s reconstruction has
been addressed thus far, and what conditions and timelines are necessary for scaling up
efforts. It looks at the immediate and long-term needs for Ukraine’s recovery and
reconstruction, examines the existing framework for coordinating and implementing
rebuilding efforts, describes potential funding sources and analyses the financial support
already committed for Ukraine’s reconstruction. Finally, it reviews Ukraine’s ability to
effectively absorb reconstruction funds and outlines the basic conditions required for
scaling up reconstruction.

Dr. Tinatin Akhvlediani is a Research Fellow in the EU Foreign Policy Unit at CEPS, specialising in
the EU’s enlargement, neighborhood, and trade policies. Her regional expertise is focused on
the EU’s Eastern neighborhood and Ukraine.

CEPS Explainers offer shorter, more bite-sized analyses of a wide range of key policy questions facing Europe.
Unless otherwise indicated, the views expressed are attributable only to the authors in a personal capacity and
not to any institution with which they are associated.

© CEPS 2024

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UKRAINE’S NEEDS FOR LONG-TERM RECOVERY AND RECONSTRUCTION

A ccording to the Rapid Damage and Needs Assessment (RDNA3), by the end of 2023,
Ukraine’s estimated reconstruction and recovery needs amounted to around EUR
453 billion, on top of the colossal human suffering inflicted on the country, as
recorded by the World Bank. This is roughly 2.8 times Ukraine’s estimated nominal GDP
in 2023. But these estimates don’t include the further damage done since the beginning
of 2024 and of course, the longer the war continues, the more war damage there will be.

It's noteworthy that the direct damage to buildings and infrastructure within the first two
years of the war amounts to around EUR 138 billion. But the needs for recovery are more
than three times higher than the direct damage itself, as reconstruction needs also
include the costs for repairs, restoration, and reconstruction with a dedicated ‘build back
better premium’ on top of the direct damage and losses incurred1.

The highest estimated costs are for housing (17 %) and the largest proportionate increase
in damage is registered in the energy sector – the damage from the war has increased
more than fivefold since June 2022. In terms of damage distribution, the geographic areas
facing the greatest increase are the frontline regions of the war, including Donetsk,
Kharkiv, Luhansk, Zaporizhzhia, Kherson and Kyiv oblasts.

UKRAINE ’S IMMEDIATE RECOVERY NEEDS

While Ukraine’s reconstruction is a medium to long-term project and will last for around
a decade or more, the country, still at war, also has short and immediate needs for its
recovery.

The Ukrainian economy saw its real GDP grow by 5.3 % in 2023 and growth in 2024 is
projected to amount to 3 %. But this follows a steep 29.1 % decline in 2022, to the extent
that the IMF doesn’t expect the Ukrainian economy to return to its prewar size until 2029,
assuming the war ends sooner rather than later. Economic growth is now registering the
country’s adjustment to the war, rather than growth in production capacity, and is mainly
driven by budget assistance, recovery funding, and humanitarian aid.

1Direct costs are expressed in monetary values of the replacement price following the invasion. Loss is expressed in
monetary values resulting from the changes in economic flows due to the war.

|1
 2 | TINATIN AKHVLEDIANI

The country continues to heavily rely on external

According to estimates from the
funding to meet its budgetary needs. According to
Kyiv School of Economics, if the estimates from the Kyiv School of Economics, if the
war continues, the country will war continues, the country will need around USD 40
need around USD 40 billion (about billion (about EUR 37.4 billion) every year. According
to estimates made by the Government of Ukraine
EUR 37.4 billion) every year.
(GoU), the country will need around EUR 14 billion in
international support just to cover its 2024 budgetary needs. This includes repairing the
most damaged infrastructure and securing funding for Ukraine’s 2024 strategic economic
and security priorities.

INTERNATIONAL COOPERATION FOR RECOVERY AND RECONSTRUCTION

Multi-Donor Coordination Platform

In December 2022, G7 leaders agreed to set up the Multi-Donor Coordination Platform

for Ukraine. This brings together Ukraine, the EU, the G7 countries and international
financial institutions to coordinate support for Ukraine’s immediate and long-term
recovery and reconstruction. The Platform is governed by a Steering Committee on a
consensus basis and is co-chaired by senior officials from the US, the EU and Ukraine. The
Platform and its Steering Committee is supported by a Secretariat hosted by the European
Commission in Brussels and the GoU in Kyiv.

The Platform launched in January 2023 with the goal to mitigate overlap and maximise
the impact of every financial contribution that Ukraine receives from its donors and
international partners. Thus far, international support has mainly addressed Ukraine’s
immediate short-term needs for recovery but the Platform is expected to take a more
proactive and strategic approach, not only for Ukraine’s immediate recovery but also for
laying the groundwork for its long-term reconstruction.

The Ukraine Recovery Conference

The Ukraine Recovery Conference (URC) was held for the first time in 2022 in Lugano,
Switzerland. The URC was an important event setting the stage for presenting Ukraine’s
Recovery Plan and setting the foundations for an annual gathering of the international
community to continuously collaborate on Ukraine’s reconstruction and recovery.

URC 2022’s main deliverable was the Lugano Declaration, where the participating
countries agreed on seven guiding principles for Ukraine’s recovery processes –
partnership, a reform focus, transparency and accountability, democratic participation,
multi-stakeholder engagement, gender equality and inclusion, and sustainability.
3 | EXPLAINING UKRAINE’S RECOVERY AND RECONSTRUCTION: WHAT, HOW AND WHEN?

URC 2023 was held in London, with the focus on mobilising international support for
Ukraine's economic and social recovery, including through private sector engagement.
URC 2023 resulted in raising over USD 60 billion. Additionally, suggestions were made on
setting up financial guarantees, insurance on bank reserves during times of conflict and
political risk insurance for reconstruction efforts.URC 2024 in Berlin distinguished itself by
actively involving civil society and expanding the conference's focus to four key
dimensions, namely business, social and human, local and regional, and the EU
dimension. Berlin also featured a Recovery Forum Business Fair, which facilitated
matchmaking between Ukrainian businesses and municipalities with potential private and
public partners. This highlighted the importance of private capital and public-private
partnerships in the reconstruction process.

URC 2024 resulted in the signing of over 110 agreements, including numerous business-
to-business agreements. These agreements, together with announcements made during
the conference, amounted to approximately EUR 16 billion, which includes funds through
the EU’s Ukraine Facility. The funds raised in Berlin were modest compared to those raised
in London but overall, the Berlin edition contributed to more inclusiveness and a better
conference structure. URC 2025’s host, Italy, has already committed to maintaining the
conference's structure with Berlin’s four main dimensions, plus an added focus on
sustainability. This sets a precedent for future URC editions to build on each other and to
ensure progress continues unabated. Concerted efforts to establish continuous planning
and organisation for future conferences, with well-defined objectives for each subsequent
edition, would further ensure coherence and maintain momentum in Ukraine's recovery
efforts.

F UNDING SOURCES FOR UKRAINE’S RECONSTRUCTION AND RECOVERY

Ukraine receives various forms of international support, broadly divided into military,
financial, humanitarian aid, and assistance to Ukrainian refugees. Out of all these types of
support, it’s financial support that could be best used for Ukraine’s recovery and
reconstruction.

EU support

According to the Ukraine Support Tracker from the Kiel Institute for the World Economy
(April 2024 edition), the EU provides the most financial support to Ukraine, having
committed EUR 84 billion. This includes the Ukraine Facility, established to streamline the
EU’s financial support for Ukraine’s recovery alongside its European integration.

The Facility has secured EUR 50 billion from the multiannual financial framework (MFF)
for 2024-2027, two-thirds allocated for loans (EUR 33 billion) and one-third for grants
 4 | TINATIN AKHVLEDIANI

(EUR 17 billion). As all these funds are intended to pay for Ukraine’s reconstruction in line
with its eventual EU accession, the Facility comes with conditions attached –
disbursement is dependent on Ukraine undertaking reforms for its European integration
as outlined in the Ukraine Plan. This includes a wide range of reforms covering public
administration, good governance, the rule of law, sound financial management, anti-
corruption and anti-fraud efforts, digital transformation, the green transition,
environmental protection, sustaining and building human capital and other reforms to
modernise the economy and accelerate Ukraine’s EU accession process.

The Ukraine Facility makes the EU The Ukraine Facility makes the EU the largest provider
of financial support for Ukraine’s recovery in a
the largest provider of financial
systematic manner that’s aligned with its European
support for Ukraine’s recovery in integration. Although the funds for grants account for
a systematic manner that’s only EUR 17 billion and are thus limited when
aligned with its European compared to reconstruction needs, this is still the
largest sum of grant money secured for Ukraine’s
integration.
recovery to date.

International support beyond the EU2

After the EU, the US is the second largest provider of financial support, with commitments
totalling EUR 25 billion, almost all of which have been allocated. Additionally, the latest
US support package to Ukraine amounts to USD 61 billion, with USD 8 billion dedicated
to financial aid in the form of loans and not grants. This funding is mainly being spent on
the country’s immediate needs.

Other donor countries include the UK and Japan, each with commitments of up to EUR 6
billion, Canada with around EUR 5 billion, Norway with EUR 3 billion, and South Korea,
Switzerland, and Iceland with less than EUR 1 billion each. Non-bilateral donors such as
the IMF, European Bank for Reconstruction and Development, the United Nations, and
World Bank Group have committed a total of EUR 13 billion for financial support, although
no timeline for allocating these funds has been set (please see Table 1 in the Annex at the
end of this Explainer for more detailed information).

2This section presents statistics based on the Ukraine Support Tracker by the Kiel Institute for the World Economy,
April 2024 edition.
5 | EXPLAINING UKRAINE’S RECOVERY AND RECONSTRUCTION: WHAT, HOW AND WHEN?

Figure 1. Committed and allocated financial Support to Ukraine, by the end of February
2024, in billion EUR.

Financial commitments Financial allocated

84

34

25

21

5
5

3
3

1
EU US UK C ANAD A JAP AN NO R W AY

Source: own compilation, based on the Ukraine Support Tracker by the Kiel Institute for the World Economy.

Overall, international financial support outside the EU is mainly sourced from the US but
these funds have been spent on the country’s immediate budgetary needs, leaving a large
gap in securing much needed long-term funding for Ukraine’s reconstruction and
recovery.
Using frozen Russian assets

An additional avenue for potential funding arises from the Russian Central Bank’s (RCB)
frozen international reserves in the G7 countries and the EU, estimated to be
approximately USD 300 billion (around EUR 280.5 billion).

Russia’s full-scale invasion of Ukraine violates customary international law and the UN
Charter (Article 2 (4)) stating that ‘every internationally wrongful act of a state entails the
international responsibility of that state’. But Russia is a permanent member of the UN
Security Council and it can veto its resolutions on reparations. Thus far, the United Nations
General Assembly has only stepped in to condemn Russia’s aggression and recognised the
need for establishing an international mechanism for reparations due to Russia’s
internationally wrongful acts.

There are, however, legal complications over confiscating the RCB’s assets arising from
the principle of immunity under international law, namely immunity from jurisdiction and
immunity from enforcement. There are some exceptions, however, as explained in a
recent study which concludes that the most legally feasible options for confiscating assets
should be either (i) giving RCB assets as a loan to Ukraine, which should be repayable in
6 | TINATIN AKHVLEDIANI

principle if and when Russia complies with its obligation to pay full reparations; or (ii) RCB
assets could be confiscated based on an exception to immunity for enforcing international
judgments that demand damages to be paid.

There is no precedent for the first option but in practice it means that when Russia accepts
to pay reparations, that amount is likely to exceed what has been 'confiscated', so Ukraine
will not need to make any repayments to Russia. The second option requires for
international court orders to rule in Ukraine’s favour and this usually takes time. Past
experiences also show that international courts rarely rule for large damages repayments
possibly problematic because Ukraine’s reconstruction does require large sums of money.
So, this option requires such a precedent to be created for Ukraine – essentially providing
a completely new blueprint for reparations.

Another option refers to Belgium’s proposal to the G7 countries to use these assets as
collateral for raising debt to fund Ukraine’s reconstruction. This plan involves borrowing
against Russia’s obligation to pay reparations, with a commitment to keep the RCB’s assets
frozen until the obligation is fulfilled. If Russia fails to meet its obligations by the bond
maturity date, the assets would be seized.

However, this proposal faces legal and economic challenges. First, the G7 would issue
bonds backed by their own claims rather than Ukraine’s, which would make it legally
difficult to prove that Russia has committed internationally wrongful acts towards the G7
countries that justifies taking countermeasures. Second, this would damage the credibility
of the threat to seize assets, which is necessary to reassure investors that their loans will
be eventually repaid.

At the 2024 G7 summit, a compromise solution was found by agreeing to use the profits
accrued on the frozen assets, rather than the frozen assets themselves, as the collateral
to fundraise loans for Ukraine, for around a sum of USD 50 billion (around EUR 46.7
billion).

So far, in Europe, it’s only Estonia that has led the way by passing a bill that allows for the
use of frozen Russian assets to support Ukraine. The bill allows for around EUR 38 million
in frozen RCB assets in Estonia to be used to support Ukraine.

The latest US aid package for Ukraine also allows for the seizure of Russian state assets
located in the US to be earmarked for Ukraine. This includes USD 5 billion of RCB assets
frozen by the US, with seizures being carried out under the provisions of the Rebuilding
Economic Prosperity and Opportunity for Ukrainians Act (REPO Act).

While confiscating RCB assets continues to be discussed, utilising windfall profits – the
interest generated from holding these assets – seems to be a quicker solution. In May
7 | EXPLAINING UKRAINE’S RECOVERY AND RECONSTRUCTION: WHAT, HOW AND WHEN?

2024, the EU adopted a plan to use the interest generated from holding RCB assets to
support Ukraine. Here the largest holder of RCB assets is Euroclear, a Brussels-based
private clearing house and securities depository, that holds around EUR 200 billion worth
of assets and cash. In the first nine months of 2023, these assets generated EUR 3 billion
in interest and EUR 34 million in management costs.

A TTRACTING PRIVATE CAPITAL

According to different estimates, between one-sixth and one-third of Ukraine’s
reconstruction needs could be financed by the private sector. This implies that up to EUR
150 billion (one-third of the needs estimated by the RDNA3) should come from private
finance. The GoU estimated that USD 292 billion (around EUR 273 billion) in investments
is needed over the next decade to achieve its strategic goals.

However, due to the war, capital has been fleeing the nation. Ukraine's Foreign Direct
Investment (FDI) experienced a substantial decline following Russia's full-scale invasion,
plummeting from around EUR 540 million in the initial quarter of 2022 to a deficit of
around EUR 267 million in the subsequent quarter, as reported by UkraineInvest. Private
investment has been limited since the full-scale invasion, with new projects totalling
around EUR 1.6 billion. Investors are of course wary of military risks and many Ukrainian
businesses lack sufficient collateral for loans.

Up to 80 % of expected FDI and other private investments may need to be secured

through insurance. However, for war-related insurance it’s difficult to estimate the costs
of losses and insurance premiums are likely to be very high. This could further limit
potential projects, particularly affecting capital-intensive sectors with long
implementation periods, such as energy, processing industries, the extraction of critical
materials and green metallurgy.

Providing export credit insurance proved to be a useful tool for EU countries to maintain
their economic activities with Ukraine. For instance, German, Polish, and Danish export
credit insurance agencies are offering insurance and guarantees for exporters against
commercial and political risks, allowing business to continue trading, despite the ongoing
war.

But to attract new private capital that corresponds with Ukraine’s reconstruction needs
and to provide large-scale insurance beyond shipments and trade, systemic war insurance
needs to be established. Up to now, the World Bank’s Multilateral Investment Guarantee
Agency (MIGA) has issued USD 195 million to cover political risk insurance guarantees
since the start of the invasion. MIGA also launched the Support to Ukraine’s
Reconstruction and Economy (SURE) Trust Fund in February 2023, and at URC 2023 in
 8 | TINATIN AKHVLEDIANI

London, EBRD announced a pilot project of war risk insurance for Ukraine – but this latter
initiative, at the time of writing, still needs to be implemented.

At URC 2024 in Berlin, Aon, in collaboration with the US International Development

Finance Corporation, announced a USD 350 million insurance programme to support
Ukraine’s economic recovery. This includes a USD 50 million reinsurance facility and USD
300 million in war risk insurance for the healthcare and agriculture sectors.

Given Ukraine’s needs, the war risk insurance is rather small and only covers two sectors
but this is an important initiative to help attract new capital into Ukraine and to support
the country’s reconstruction efforts. It also sets precedents for similar public-private
partnership initiatives.

UKRAINE ’S ABSORBING CAPACITY

The colossal task of rebuilding Ukraine means that the country needs to take the
ownership of reforms to strengthen social and private governance. Ukraine’s
underdeveloped financial and capital market and weak corporate governance had already
hindered international investment before the outbreak of the war.

While Ukraine is poised to receive a large amount of investment from the EU and other
international partners, it’s crucial to distribute these funds carefully to align with the
country’s capacity to absorb them. Additionally, an excessive influx of foreign funding
should be avoided in sectors with low levels of productivity.

Additionally, securing medium-term, predictable funding commitments from donors is

critical for planning and managing complex procurement processes. As pointed out by the
RDNA3, it’s important to better integrate priority setting and project planning into the
medium to long-term budget planning process for the required reforms.

Putting in place robust anti- Putting in place robust anti-corruption mechanisms is

important to ensure that reconstruction funds are
corruption mechanisms is
used effectively and transparently, and that trust is
important to ensure that built among international donors and local
reconstruction funds are used stakeholders. Prior to Russia’s full-scale invasion of
effectively and transparently, Ukraine, corruption was a systemic problem impeding
Ukraine’s economic development. Rebuilding the
and that trust is built among
country means that it must now systematically stamp
international donors and local out corruption.
stakeholders.
9 | EXPLAINING UKRAINE’S RECOVERY AND RECONSTRUCTION: WHAT, HOW AND WHEN?

To do this, Ukraine and its international allies have implemented several anti-corruption
measures. These include establishing independent anti-corruption bodies such as the
National Anti-Corruption Bureau of Ukraine (NABU) and the Specialized Anti-Corruption
Prosecutor's Office (SAPO). Additionally, the EU Anti-Corruption Initiative (EUACI) plays a
vital role in supporting these efforts by providing expertise and resources to enhance
transparency and accountability.

However, the effectiveness of these institutions is often hampered by political

interference and insufficient enforcement. Ukraine’s EU accession path and the plans for
its reconstruction provide ample opportunities for the country to align with the EU’s
legislation and anti-corruption best practices, as well as to improve corporate governance
and create a proper business environment for attracting local and international
investment.

Beyond undertaking reforms and strengthening governance, the country needs human
capital to lead and implement the reconstruction and recovery process. This means
refugees need to return and to integrate back into the Ukrainian workforce through
comprehensive reintegration programmes. Supporting veterans’ physical and
psychosocial rehabilitation, reskilling, and reintegration into civilian life is another crucial
factor for boosting economic recovery.

Sector-specific human capital needs are also critical for Ukraine's reconstruction,
specifically a need for skilled workers in construction, healthcare, education, agriculture,
and technology. Here, international partnerships and aid could play a crucial role in
facilitating human capital development, providing the necessary resources and sharing
best practices.

WHEN – NOW OR LATER ?

The ongoing war continues to inflict serious damage, particularly to critical infrastructure.
This raises the question – should international partners wait for the war to end before
investing more in Ukraine's reconstruction or should investments be scaled up now?

Starting investment now carries the risk of further damage and destruction as the war
continues. However, waiting until the war is over risks wasting time and allowing the
damage to escalate to a colossal scale, making reconstruction even more lengthy and
complicated. With these considerations in mind, the World Bank and the European
Investment Bank have acknowledged Ukraine’s immense recovery needs and have thus
recommended that Ukraine's reconstruction should be scaled up sooner rather than later.
But to do so, some security needs should be met first to make sure that reconstructed
parts of the country are not damaged and/or destroyed again.
10 | TINATIN AKHVLEDIANI

Such measures could include establishing ‘secure zones’, where reconstruction can be
safely undertaken, potentially protected by international peacekeeping forces if
necessary. Fortifying critical infrastructure is another essential condition for scaling up
reconstruction, which includes enhanced air defense systems and integrating advanced
surveillance and early warning systems to promptly detect and mitigate threats. This
would prevent key infrastructure from being targeted yet again.

In short, putting in place security measures requires coordination efforts between Ukraine
and its donors and international partners to ensure that they are fully adaptive to how
the conflict evolves over time.

There’s also a need for extensive demining in Ukraine. Up to now, a third of Ukraine
(around 180 000 square km) is littered with mines and explosive hazards, posing severe
risks to civilians, halting agricultural activities and reducing investment prospects. This
also hinders the return of civilians to liberated territories. The United Nations
Development Programme funds 80 % of these operations, with significant contributions
from the EU, the US, South Korea and NGOs like the HALO Trust. Despite accreditation
challenges, external support remains crucial as are calls for more international
engagement to accelerate demining in Ukraine.

C ONCLUSIONS
Rebuilding Ukraine is a colossal task that requires substantial financial resources and
coordinated efforts. While international support has primarily focused on military aid, the
funds allocated for Ukraine’s reconstruction remain limited. The allocated support is
mainly being spent on the country’s immediate budgetary needs, leaving a wide gap in
securing the needed long-term funding for Ukraine’s reconstruction and recovery. The EU
has been the largest provider of reconstruction funds through the Ukraine Facility but the
needs for reconstruction are estimated to be nine times greater than what the EU is
currently providing.

Frozen Russian assets could be used for Ukraine’s reconstruction as Russia is liable for all
the destruction and damage. Several steps have been taken towards utilising the windfall
profits from holding RCB assets but legal and political questions remain regarding how to
use these frozen assets. Estonia has pioneered legislation to allow the use of frozen
Russian assets to support Ukraine, hopefully setting a precedent for other countries to
follow. This will also contribute towards creating a new international blueprint for
confiscating Russian assets.

Attracting private capital remains challenging due to the ongoing war. Developing tailored
strategies to mobilise private capital, including war-related insurance, will be crucial.
11 | EXPLAINING UKRAINE’S RECOVERY AND RECONSTRUCTION: WHAT, HOW AND WHEN?

Planning and predictability are also essential for managing long and complex
reconstruction projects. A clear plan with a defined timeline is vital for Ukraine to
withstand continuous damage and to rebuild effectively.

Rebuilding Ukraine requires the country to take ownership of the reforms needed to
strengthen governance and create a conducive investment environment. Investments
from the EU and international partners should be carefully aligned with Ukraine's capacity
to effectively absorb these funds. Robust anti-corruption measures, strengthening the
independence of the anti-corruption bodies and fostering a culture of accountability are
essential to guarantee transparency and build trust among local and international
stakeholders.

Additionally, reintegrating refugees and veterans into the workforce is critical and needs
to be supported by comprehensive rehabilitation and reskilling programmes. Addressing
sector-specific human capital needs, particularly in construction, healthcare, education,
agriculture, and technology, is vital for a sustainable recovery. International partnerships
and aid will play a crucial role in facilitating these efforts.

Scaling up Ukraine's reconstruction efforts should happen now rather than later to
mitigate further damage and accelerate the country’s recovery. However, this should be
coupled with stringent security measures, including the establishment of secure zones
and enhanced military defenses so that reconstruction efforts are both safe and
sustainable.

The establishment of the Multi-Donor Coordination Platform represents a crucial step for
organising international efforts for Ukraine’s reconstruction. Given its significance, the
Platform is expected to adopt a more actionable and strategic approach, delivering the
necessary funds and enhancing coordination for immediate and long-term reconstruction
efforts.

Similarly, the Ukraine Recovery Conference (URC) is a key initiative in this coordination
process. Each of the three URC conferences thus far have produced specific deliverables
and contributions. Future editions should build on each other and be implemented
through strategic planning, clearer goals and well-defined objectives for each subsequent
edition. This approach will help to maintain coherence and momentum in Ukraine's
recovery efforts.

There is a natural overlap between the reforms needed for Ukraine’s EU membership and
its reconstruction and sustainable recovery. The conditions for Ukraine’s EU integration,
including reforms in the rule of law, transparency, corruption and governance, are also
key to sustainable reconstruction. Streamlining the EU accession process and Ukraine’s
reconstruction is essential and the EU is well-positioned to lead this effort. Efficient
12 | TINATIN AKHVLEDIANI

progress here will significantly benefit Ukraine’s reconstruction by implementing the

necessary reforms to enhance Ukraine’s ownership, governance and absorbing capacity.

The Ukraine Facility is a promising starting point to streamline Ukraine’s reconstruction

with its European integration, positioning the EU as the largest grant and financial support
provider to the country. Implementing the Ukraine Facility will showcase Ukraine’s
readiness and willingness for undertaking reforms and absorbing EU funds while
highlighting the gaps and needs for continued support from the EU and other
international partners.
13 | EXPLAINING UKRAINE’S RECOVERY AND RECONSTRUCTION: WHAT, HOW AND WHEN?

A NNEX
Table 1. Financial support from international donors by the end of February 2024, in billion
euros

Financial support from international donors Commitments Allocations

EU 84 34
EU Member States 6.93 6.34
EU institutions 77.18 27.68
European Investment Bank 2.36 2.36
EU (Commission and Council) 74.82 25.32
US 25 21
UK 6 3
Canada 5 3
Japan 6 5
Norway 3 1
South Korea 0.65 0.29
Switzerland 0.10 0.10
Iceland 0.01 0.01

Nonbilateral donors
IMF 3.21
European Bank for Reconstruction and Development 2.80
United Nations 0.05
World Bank Group 6.95
Total 142.22 68.23

Source: own compilation, based on the Ukraine Support Tracker by the Kiel Institute for the World Economy.
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