Rebuilding the Transportation Sector of Ukraine: a Comprehensive Approach to Financing, Investment and Recovery

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The article presents a comprehensive approach to financing, investing, and restoring Ukraine’s transportation sector both in the current environment and in the postwar period. The direct damage caused by the war to buildings and infrastructure over the past two years amounts to $152 billion. A joint assessment by the Government of Ukraine, the World Bank Group, the European Commission and the United Nations (RDNA3) estimates that the total cost of rebuilding the country over the next decade is $486 billion. The main needs of Ukraine in 2024 are focused on the restoration of key sectors of the economy and infrastructure, which require $15.3 billion in funding. It is noted that the transport sector suffered losses of $36.7 billion, and the needs for recovery are estimated at $78 billion. More than 26 thousand kilometers of roads were damaged, which is estimated at $28.3 billion. Rail transport suffered losses of $4.3 billion, ports – $0.85 billion, and the aviation industry – $2 billion. Measures to restore transport routes that allow Ukraine to ensure its transit potential even in times of war are outlined, namely: the EU solidarity routes and, from September 2023, the Ukrainian maritime export corridor, the development of Danube ports, which allowed for the expansion of alternative routes, and the modernization of border infrastructure with the EU and Moldova. The key measures to restore the transport sector are: updating the National Transport Strategy of Ukraine until 2030, adopting the Strategy for the Development of Border Infrastructure with the EU and Moldova, and submitting a draft law on railway transport reform to the Verkhovna Rada in October 2024. The European Union, the International Monetary Fund (IMF), the Organization for Economic Cooperation and Development (OECD), and private investors are important donors to the recovery. One possible source of funding for reconstruction is frozen Russian assets worth $300 billion. Reconstruction of the country after the war may require up to 500 billion euros, which will include significant investments in infrastructure restoration, housing reconstruction, and modernization of production and energy facilities. It was emphasized that the G7 countries, together with the Donor Coordination Platform, will support the restoration of Ukraine’s transport infrastructure and promote the development of alternative logistics routes for the export of Ukrainian products. The updated National Transport Strategy of Ukraine until 2030, which aims to adapt the transport sector to new conditions, developed priorities for investment and political activity in Ukraine for the next five years and outlined measures for the plan for the recovery and reconstruction of Ukraine.

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