As of January 2024, The Russian invasion of Ukraine has had a substantial impact on the Ukrainian economy, leading to approximately $152 billion in overall direct damage to the Ukrainian economy. The energy ($11 billion), transportation ($34 billion), and housing and utilities ($56 billion) sectors were among those that experienced the heaviest damage, constituting nearly 75% of the total damage. Ukraine is projected to require $486 billion in recovery and reconstruction needs within a decade while considering economic factors like inflationary pressure and compliance with modern standards (e.g., low energy intensity). In this regard, the energy ($47 billion), housing ($80 billion), and transportation ($74 billion) sectors would require funding for nearly half of these recovery needs during this period.

This report aims to understand Ukraine’s key reconstruction needs, the response to them, and potential ways the EU can contribute to Ukrainian recovery. It seeks to identify critical areas where the EU can focus its reconstruction efforts for the near-term and long-term perspective and potential benefits for Ukraine and the EU.

This report also explores ways of enhancing collaboration between the Ukrainian government and the EU to speed up reconstruction efforts across Ukraine. It will touch upon the various funding instruments at the EU level and how to utilise them effectively to ensure transparent and sustainable support for the Ukrainian economic recovery.

This report is based on primary (e.g., laws and regulations) and secondary (e.g., think tank reports, damage and recovery needs assessments, as well as EU and official publications) data review and analysis.