UKRAINE THIRD RAPID DAMAGE AND NEEDS ASSESSMENT RDNA3 FEBRUARY 2022 – DECEMBER 2023 UKRAINE RAPID DAMAGE AND NEEDS ASSESSMENT (RDNA3) FEBRUARY 2022 – DECEMBER 2023 © February 2024, the World Bank, the Government of Ukraine, the European Union, the United Nations. Disclaimer The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of the World Bank, its Board of Executive Directors, or the governments they represent, or those of the European Union (EU) or United Nations (UN). The World Bank, EU and UN do not guarantee the accuracy, completeness, or currency of the data included in this work and do not assume responsibility for any errors, omissions, or discrepancies in the information, or liability with respect to the use of or failure to use the information, methods, processes, or conclusions set forth. 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TABLE OF CONTENTS ABBREVIATIONS AND ACRONYMS 6 ACKNOWLEDGMENTS 8 FOREWORD 9 EXECUTIVE SUMMARY 10 INTRODUCTION 20 2022 Invasion and War Trajectory 20 Emergency and Humanitarian Response 22 Recovery and Reconstruction Efforts 22 RDNA3 Objectives and Methodology 26 SUMMARY OF IMPACTS AND NEEDS 29 RECOVERY AND RECONSTRUCTION PRIORITIES AND PRINCIPLES 39 Recovery and Reconstruction Priorities 40 Principles and Opportunities for Recovery and Reconstruction 47 MACROECONOMIC IMPACTS 52 HUMAN IMPACT ASSESSMENT 56 Displaced Persons and Returnees 57 Youth (Aged 14 – 35) and Child Protection and Rights 59 Elderly Persons 63 Persons with Disabilities 64 Veterans and their Families 67 Gender Specific Impacts 70 SOCIAL SECTORS 73 Housing 74 Education and Science 80 Health 85 Social Protection and Livelihoods 90 Culture and Tourism 96 PRODUCTIVE SECTORS 101 Agriculture 102 Irrigation and Water Resources 107 Commerce and Industry 113 Finance and Banking 121 INFRASTRUCTURE SECTORS 125 Energy and Extractives 126 Transport 132 Telecommunications and Digital 138 Water Supply and Sanitation 142 Municipal Services 147 CROSS-CUTTING AREAS 154 Environment, Natural Resource Management, and Forestry 155 Emergency Response and Civil Protection 161 Justice and Public Administration 165 Explosive Hazards Management 169 ANNEX 1. RDNA3 TEAM 175 LIST OF TABLES Table 1. Total damage, loss, and needs by sector (US$ billion) 35 Table 2. RDNA3 Damage, loss, and needs by oblast (US$ billion) 36 Table 3. RDNA1, RDNA2, and RDNA3 damage, loss, needs by sector (US$ billion) 37 Table 4. Summary of assessed recovery and reconstruction priorities for 2024 financing - estimated contribution by sector and type of expenditure (US$ million) 45 Table 5. Damage, loss, and needs by oblast (US$ million) 78 Table 6. Total recovery and reconstruction needs (US$ million) as of December 31, 2023 79 Table 7. Estimated 2024 recovery and reconstruction priorities (US$ million) 79 Table 8. Damage, loss, and needs by oblast (US$ million) 83 Table 9. Total recovery and reconstruction needs (US$ million) as of December 31, 2023 84 Table 10. Estimated 2024 recovery and reconstruction priorities (US$ million) 84 Table 11. Damage, loss, and needs by oblast (US$ million) 87 Table 12. Total recovery and reconstruction needs (US$ million) as of December 31, 2023 88 Table 13. Estimated 2024 recovery and reconstruction priorities (US$ million) 89 Table 14. Damage, loss, and needs by oblast (US$ million) 94 Table 15. Total recovery and reconstruction needs (US$ million) as of December 31, 2023 95 Table 16. Estimated 2024 recovery and reconstruction priorities (US$ million) 95 Table 17. Damage, loss, and needs by oblast (US$ million) 99 Table 18. Total recovery and reconstruction needs (US$ million) as of December 31, 2023 100 Table 19. Estimated 2024 recovery and reconstruction priorities (US$ million) 100 Table 20. Damage, loss, and needs by oblast (US$ million) 105 Table 21. Total recovery and reconstruction needs (US$ million) as of December 31, 2023 105 Table 22. Estimated 2024 recovery and reconstruction priorities (US$ million) 106 Table 23. Actual donor support (US$ million) 106 Table 24. Damage, loss, and needs by oblast (US$ million) 110 Table 25. Damage per category (US$ million) 111 Table 26. Total recovery and reconstruction needs (US$ million) as of December 31, 2023 112 Table 27. Estimated 2024 recovery and reconstruction priorities (US$ million) 112 Table 28. Damage, loss, and needs by oblast (US$ million) 118 Table 29. Total recovery and reconstruction needs (US$ million) as of December 31, 2023 119 Table 30. Estimated 2024 recovery and reconstruction priorities (US$ million) 119 Table 31. Estimated public sector (GoU, IFIs, and donors) contribution to 2024 priorities (US$ million) 120 Table 32. Damage, loss, and needs by oblast (US$ million) 123 Table 33. Total recovery and reconstruction needs (US$ million) as of December 31, 2023 124 Table 34. Estimated 2024 recovery and reconstruction priorities (US$ million) 124 Table 35. Damage, loss, and needs by oblast (US$ million) 130 Table 36. Total recovery and reconstruction needs (US$ million) as of December 31, 2023 131 Table 37. Estimated 2024 recovery and reconstruction priorities (US$ million) 131 Table 38. Damage, loss, and needs by oblast (US$ million) 135 Table 39. Total recovery and reconstruction needs (US$ million) as of December 31, 2023 136 Table 40. Estimated 2024 recovery and reconstruction priorities (US$ million) 137 Table 41. Damage, loss, and needs by oblast (US$ million) 140 Table 42. Total recovery and reconstruction needs (US$ million) as of December 31, 2023 141 Table 43. Estimated 2024 recovery and reconstruction priorities (US$ million) 141 Table 44. Damage, loss, and needs by oblast (US$ million) 145 Table 45. Total recovery and reconstruction needs (US$ million) as of December 31, 2023 146 Table 46. Estimated 2024 recovery and reconstruction priorities (US$ million) 146 Table 47. Damage, loss, and needs by oblast (US$ million) 152 Table 48. Total recovery and reconstruction needs (US$ million) as of December 31, 2023 153 Table 49. Estimated 2024 recovery and reconstruction priorities (US$ million) 153 Table 50. Damage, loss, and needs by oblast (US$ million) 159 Table 51. Total recovery and reconstruction needs (US$ million) as of December 31, 2023 160 Table 52. Estimated 2024 recovery and reconstruction priorities (US$ million) a 160 Table 53. Damage, loss, and needs by oblast (US$ million) 163 Table 54. Total recovery and reconstruction needs (US$ million) as of December 31, 2023 164 Table 55. Estimated 2024 recovery and reconstruction priorities (US$ million) 164 Table 56. Damage, loss, and needs by oblast (US$ million) 167 Table 57. Total recovery and reconstruction needs (US$ million) as of December 31, 2023 168 Table 58. Estimated 2024 recovery and reconstruction priorities (US$ million) 168 Table 59. Explosive ordnance contamination and estimated clearance cost (US$ million) 172 Table 60. Total recovery and reconstruction needs (US$ million) as of December 31, 2023 173 Table 61. Estimated 2024 recovery and reconstruction priorities (US$ million) 173 Table 62. RDNA3 Team 175 LIST OF FIGURES Figure 1. Spatial evolution of the war until December 31, 2023, and Ukraine RDNAs 13 Figure 2. Extent of damage by region as of February 2023 (left) and December 31, 2023 (right) 14 Figure 3. Comparison of damage in RDNA2 and RDNA3 (billion US$) 14 Figure 4. Comparison of needs in RDNA2 and RDNA3 (billion US$) 15 Figure 5. Summary of RDNA3 recovery and reconstruction priorities and funding needs for 2024 as identified by Ukrainian authorities 17 Figure 6. RDNA3 key results: damage, needs, and 2024 financing priorities 19 Figure 7. Comparison of damage and needs in RDNA3 and RDNA2 (billion US$) 19 Figure 8. Spatial evolution of the war until December 31, 2023, and Ukraine RDNAs 21 Figure 9. Schematic illustration of national and local level institutions engaged in recovery and reconstruction 24 Figure 10. Total damage (US$ billion): US$152 billion 30 Figure 11. Comparison of damage in RDNA1, RDNA2, RDNA3 (billion US$) 31 Figure 12. Total loss (US$ billion): US$499 billion 31 Figure 13. Comparison of losses in RDNA1, RDNA2, RDNA3 (billion US$) 32 Figure 14. Total recovery and reconstruction needs (US486 billion) 34 Figure 15. Comparison of needs in RDNA1, RDNA2, and RDNA3 (in billion US$) 34 Figure 16. Comparison of damage, loss, and needs for sector clusters in RDNA2 and RDNA3 (billion US$) 38 Figure 17. Estimated distribution of RDNA3 priorities by expenditure type (US$ million) 41 Figure 18. Distribution of RDNA3 priority public expenditures by broad sector (US$ million) 41 Figure 19. RDNA3 priority public expenditures by broad sector (US$ million) compared with RDNA2 42 Figure 20. Execution on RDNA2 priorities by sector and funding during 2023 (US$ million) 43 Figure 21. Summary of RDNA3 recovery and reconstruction priorities and funding needs for 2024 as identified by Ukrainian authorities 44 Figure 22. Ukraine real GDP growth, year-on-year (YoY) 54 Figure 23. Yield by Commodity 55 Figure 24. Number Of Registered IDPS In Ukraine (Million), March 25, 2022–December 31, 2023 57 Figure 25. Number of hours spent on unpaid domestic work (housekeeping, care for family members) per week 70 Figure 26. Reference map and areas exposed to war used as baseline 173 LIST OF BOXES Box 1. First and Second Ukraine Rapid Damage and Needs Assessment 12 Box 2. RDNA3 key definitions 12 Box 3. Additional urgent strategic priorities 16 Box 4. Summary of the assessment of the Kakhovka Dam breach 21 Box 5. Ongoing World Bank–supported projects 25 Box 6. First and Second Ukraine Rapid Damage and Needs Assessment (RDNA1 and RDNA2) 26 Box 7. RDNA3 definitions 28 6 Abbreviations and Acronyms ABBREVIATIONS AND ACRONYMS ACLED Armed Conflict Location and Event Data BBB build(ing) back better BCP border crossing point CBRN chemical, biological, radiological, and nuclear CCI cultural and creative industries CHA Confirmed Hazardous Areas CHPP combined heat and power plant CRSV conflict-related sexual violence DALY disability-adjusted life year DGF Deposit Guarantee Fund DTM Displacement Tracking Matrix EBRD European Bank for Reconstruction and Development EC European Commission ENTSO-E European Network of Transmission System Operators for Electricity ERW explosive remnants of war EU European Union GBV gender-based violence GDP gross domestic product GHG greenhouse gas GIS geographic information system GIZ German Agency for International Cooperation GMI Guaranteed Minimum Income GoU Government of Ukraine ha hectare HPP hydropower plant/hydroelectric power plan HUS Housing Utility Subsidy ICF International Classification of Functioning, Disability and Health ICH Intangible Cultural Heritage I&D irrigation and drainage IDP internally displaced person IFC International Finance Corporation IFI international financial institution ILO International Labour Organization IMF International Monetary Fund IOM International Organization for Migration IT information technology kWh kilowatt-hour LGBTIQ+ lesbian, gay, bisexual, transgender, intersex, queer, and other minority gender identities MCTID Ministry For Communities, Territories and Infrastructure Development MFB multifamily building MMC Military Medical Commission MoES Ministry of Education and Science MoH Ministry of Health Abbreviations and Acronyms 7 MoVA Ministry of Veterans Affairs MRII - MPІЇ Multi-Donor Resources for Institutions and Infrastructure MSEC Medical and Social Expert Commission NBFI nonbank financial institution NBU National Bank of Ukraine NGO nongovernmental organization NMAA National Mine Action Authority of Ukraine NPL nonperforming loan NTS nontechnical survey OHCHR Office of the High Commissioner for Human Rights PDNA Post-Disaster Needs Assessment PHC primary health care PIM Public Investment Management PISA Program for International Student Assessment PPP public-private partnership RDNA Rapid Damage and Needs Assessment RDO Reforms Delivery Office of the Cabinet of Ministers of Ukraine SAWR State Agency of Water Resources SCS State Customs Service SESU State Emergency Service of Ukraine SFH single-family house SHA Suspected Hazardous Areas SMEs small and medium enterprises SOB state-owned bank SOE state-owned enterprise SSSU State Statistics Service of Ukraine SWM solid waste management TS technical survey TSO transmission system operator UCPM Union Civil Protection Mechanism UN United Nations UNDP United Nations Development Programme UNESCO United Nations Educational, Scientific and Cultural Organization UNFPA United Nations Population Fund UNHCR United Nations High Commissioner for Refugees UNICEF United Nations International Children’s Fund UN Women United Nations Entity for Gender Equality and the Empowerment of Women URTF Ukraine Relief, Recovery, Reconstruction and Reform Trust Fund UVF Ukrainian Veterans Foundation VAT value added tax WSS water supply and sanitation WUO Water User Organization 8 ACKNOWLEDGMENTS ACKNOWLEDGMENTS The Third Ukraine Rapid Damage and Needs Assessment (RDNA3), covering period between February 24, 2022, and December 31, 2023, was jointly prepared by the World Bank, the Government of Ukraine (GoU), the European Union (EU) services, and the United Nations (UN) in coordination with humanitarian and development partners, academia, civil society organizations, and the private sector. On the part of the GoU, the RDNA3 was led by the Ministry for Communities, Territories and Infrastructure Development of Ukraine (MCTID), with support from the ProSteer Office under MCTID, the Reforms Delivery Office of the Cabinet of Ministers of Ukraine (RDO), and the Kyiv School of Economics (KSE). All relevant line ministries have participated in the assessment. The European Commission services’ contribution was led by the Directorate-General for Neighbourhood and Enlargement Negotiations (DG NEAR) in coordination with the Delegation of the EU to Ukraine, the Service for Foreign Policy Instruments (FPI), and other services. From the UN, the report benefited from support and inputs from the United Nations Development Programme (UNDP), United Nations Children’s Fund (UNICEF), United Nations High Commissioner for Refugees (UNHCR), International Organization for Migration (IOM), United Nations Office for Project Services (UNOPS), World Health Organization (WHO), United Nations Educational, Scientific and Cultural Organization (UNESCO), International Labour Organization (ILO), United Nations Human Settlements Programme (UN-Habitat), Office of the United Nations High Commissioner for Human Rights (OHCHR), United Nations Population Fund (UNFPA), United Nations Entity for Gender Equality and the Empowerment of Women (UN Women), United Nations Economic Commission for Europe (UNECE), United Nations Office on Drugs and Crime (UNODC), United Nations Environment Programme (UNEP), World Food Programme (WFP), International Telecommunication Union (ITU), Food and Agriculture Organization (FAO), United Nations Industrial Development Organization (UNIDO), and International Civil Aviation Organization (ICAO). The World Bank Group’s technical assistance was provided by the World Bank’s Eastern Europe Country Management Unit, Global Practices and Cross-Cutting areas, as well as the International Finance Corporation (IFC), coordinated by the Europe and Central Asia Region. Annex 1 includes a list of main contributors. The RDNA team would like to express its deep appreciation to all individuals and organizations who contributed to this assessment. This report benefited from the generous financial support of the Global Facility for Disaster Reduction and Recovery (GFDRR) and the Swiss Secretariat for Economic Affairs (SECO). FOREWORD 9 FOREWORD On February 24, 2022, the Russian Federation invaded Ukraine, resulting in vast impacts that will be felt over generations. This third Rapid Damage and Needs Assessment (RDNA3)—undertaken jointly by the World Bank, the Government of Ukraine, the European Commission, and the United Nations and supported by other partners— takes stock of almost two years of the ongoing war, estimating damage and losses along with recovery and reconstruction needs for 10 years. Beyond physical and financial impacts that are more readily quantified, the RDNA3 provides a qualitative description of how people’s lives have been dramatically altered since the invasion. RDNA3 builds on the previous two Rapid Damage and Needs Assessments (RDNA1 and RDNA2), which respectively covered the initial 3 and 12 months of the war. Considering almost two years of the war, as of December 31, 2023, direct damage has reached almost US$152 billion, with housing, transport, commerce and industry, agriculture, and energy the most affected sectors. Damage continued to be concentrated in Donetska, Kharkivska, Luhanska, Zaporizka, Khersonska, and Kyivska oblasts. Disruptions to economic flows and production, as well as additional costs associated with war (such as debris management), are collectively measured as economic loss amounting to over US$499 billion. As of December 31, 2023, recovery and reconstruction needs are estimated at almost US$486 billion considering an (ambitious) 10-year period to meet them. These needs include critical steps for short-term recovery as well as medium-term reconstruction that builds back better to modern, low-carbon, and climate-resilient standards, and that—where relevant and possible—excludes needs already met through the Ukraine state budget or through partners and international support. The report also highlights, from Ukrainian authorities, a US$9.5 billion financing gap for addressing immediate recovery and reconstruction priorities that need funding in 2024. Ukrainian line ministries have identified US$15 billion in priorities for 2024, with particular focus on the industry and services sector (nearly US$3.6 billion), housing and utilities (US$3.1 billion), energy (US$2.7 billion), social infrastructure and services (US$2.4 billion), and transport (US$2.3 billion), as well as US$1.2 billion needed to address cross-sectoral priorities. While delivering these priorities will require more than US$8 billion in public and state-owned company investments, along with nearly US$7 billion in other public expenditures, a significant share of financing needs have been met through the state budget and donor support. This public expenditure can catalyze up to US$5.5 billion in private investment, underscoring the critical importance of the private sector in supporting recovery and reconstruction. The report underlines the importance of Ukraine’s authorities and international partners continuing to build up capacities for implementation, given the challenges of absorbing large volumes of funding in the current circumstances. While the RDNA3 focuses primarily on war-related impacts and recovery and reconstruction, the principles of building back better are aligned with the vision, reforms, and investments to be set by the Government’s Ukraine Plan and the European Union (EU) Ukraine Facility, both under preparation and the long-term development vision of Agenda 2030 and the Sustainable Development Goals as safeguards of inclusive and equitable human development. The findings in the RDNA3 complement the forthcoming Ukraine Plan and the Ukraine Facility – and the reform and investment agenda that comes with these instruments in the next four years. The Plan will bring about reforms and approaches to help scale up absorptive and institutional capacity of national and subnational authorities in Ukraine in parallel with identifying investment priorities and providing financing availability. Global experience shows that a phased approach to recovery, reconstruction, and development of human capital, underpinned by strategic prioritization across sectors, is critical given the substantial overall needs. Planning should consider approaches to scale up Ukraine’s absorptive capacity so they can manage and utilize the financing available, ensure continuous improvement of systems and processes, and increase institutional and technical capacities to promote efficient and effective investment project preparation, implementation, and monitoring—all focused on the benefits for the population. Targeting public financing to maximize private investment and to meet urgent community needs further contributes to a comprehensive financial and operational strategy and plan for Ukraine’s early recovery and long-term reconstruction, to which we are strongly committed. The World Bank Government of Directorate General for United Group Ukraine Neighbourhood Policy and Nations Enlargement Negotiations 10 EXECUTIVE SUMMARY Damaged historical building in Lviv, July 2023. Photo by UNESCO/Yuriy Yurchenko. EXECUTIVE SUMMARY 11 Since the Russian Federation’s invasion of Ukraine had reached US$135 billion.6 Regular intense attacks on February 24, 2022, the war continues to on infrastructure continued throughout 2023, with cause civilian casualties and hardship, damage unpredictable air and drone attacks extending to infrastructure and productive assets, and beyond established and largely unshifting battle disruption to the economy. As of December 2023, zones, and impacting cities like Kyiv, Odesa, and an estimated 5.9 million people were recorded as Lviv. The destruction of the Kakhovka Dam and the refugees across Europe;1 3.7 million people were hydropower plant (HPP) in June 2023 has resulted reported as internally displaced persons (IDPs) as in incalculable impacts to the environment and of October 2023.2 Since the invasion, over 10,000 exacerbated challenges already faced by people civilians have lost their lives, thousands have been struggling to access housing, water, food, and injured, and millions have lost their homes.3 Poverty health services, among others.7 There have also and food insecurity have increased: according to initial been serious attacks of ports, including in Odeska estimates from a monthly phone survey conducted and Mykolaivska regions and alongside the Danube by the World Bank since April 2023, 9 percent of River, as well as cyberattacks and intensification of households reported having run out of food at some drone and air attacks in the last months of 2023. point in a 30-day period in November 2023.4 The impacts of war are uneven, and the greatest effects Despite the ongoing war, the GoU has, with support are felt by women, persons with disabilities, children from partners, been leading early recovery and and youth, IDPs, and the elderly. The war has caused restoration efforts alongside an ambitious reform significant loss of jobs and income in the private and modernization agenda, in line with Ukraine’s sector, as well as loss of purchasing power and loss European Union (EU) integration efforts. In 2023, of assets among Ukrainians, particularly the most some US$7.2 billion was disbursed by the GoU to vulnerable. The estimated gross domestic product finance urgent recovery projects in energy, critical (GDP) for 2023 is 74 percent of 2021 GDP in real and social infrastructure, housing, humanitarian terms. Overall, there have been dramatic setbacks demining as well as for the public sector support.8 in the country’s development and in its progress For example, in 2023 restoration works were toward many of the Sustainable Development Goals. completed for 3,836 multifamily apartment buildings and 19,091 single-family houses; for 448 schools, Over the almost two years of ongoing war, the 237 kindergartens, and 390 medical facilities and war intensity has shifted across different spatial social protection institutions; and for 9,200 critical areas of Ukraine (Figure 1). The initial three months infrastructure facilities, 449 heating supply facilities, brought widespread destruction, with direct damage and 221 water supply and sanitation facilities. In quickly reaching US$97 billion. 5 During the latter half addition, emergency repairs were conducted on of 2022, the Government of Ukraine (GoU) regained over 2,000 km of motorways, highways, and other control in embattled areas and limited its loss of national roads, while 115 road bridges and about 26 control in other areas, and by reducing advances km of rail infrastructure and 46 rail bridges were of Russian forces minimized the rapid escalation in restored. The GoU has established institutional damage. However, attacks on critical infrastructure arrangements and introduced reforms to improve in the fall and winter 2022 resulted in a rapid increase planning and implementation of the recovery and in energy sector damage. By February 2023, damage reconstruction efforts. Ukraine, on its path toward 1 UN High Commissioner for Refugees (UNHCR), Operational Data Portal, Link. 2 International Organization for Migration (IOM), “Ukraine: Internal Displacement Report—General Population Survey Round 14 (September–October 2023),” Link. 3 Office of the High Commissioner for Human Rights (OHCHR), “Russia ‘Should Immediately Cease Its Use of Force against Ukraine,’ Türk Declares,” Statement of the UN High Commissioner for Human Rights, December 19, 2023, Link. The actual figures are certainly even higher; however, the receipt of information and reports from locations experiencing war and intense hostilities is a challenge, and many are still pending verification. 4 World Bank, Listening to Ukraine phone surveys (report forthcoming). 5 World Bank, Government of Ukraine (GoU), and European Commission (EC), “Ukraine Rapid Damage and Needs Assessment,” 2022, Link. 6 World Bank, GoU, EC, and United Nations (UN), “Ukraine Rapid Damage and Needs Assessment: February 2022–February 2023,” March 2023, Link. 7 GoU and UN, “Post-Disaster Needs Assessment: 2023 Kakhovka Dam Disaster, Ukraine,” 2023, Link. 8 According to the GoU data, Ukraine has mobilized nearly US$11.2 billion to finance its urgent recovery needs (including US$3.7 billion of state budget funding), of which approximately US$7.2 billion was disbursed to finance projects in energy, critical and social infrastructure, housing, and humanitarian demining as well as for public sector support in 2023. 12 EXECUTIVE SUMMARY accession to the EU, is preparing an ambitious set and projected), and estimates financial needs for of reforms under its Ukraine Plan, which is linked recovery and reconstruction (see Box 2 with key to the Ukraine Facility planned by the European definitions). To support immediate recovery and Commission (EC).9 reconstruction planning, RDNA3 also includes short- term priorities identified by Ukrainian line ministries The Third Rapid Damage and Needs Assessment that need financing in 2024. (RDNA3) presents a consistent, validated, and transparent assessment of almost two years of Consistent with previous RDNAs, the RDNA3 war impacts. Jointly developed by the World Bank, integrates the most recent data and estimations, the GoU, the EC, and the United Nations (UN), it avoids double-counting, and deducts already met presents the impacts as of December 31, 2023, in recovery and reconstruction needs, based on line with a globally accepted methodology. RDNA3 available information. However, the assessment is updates the second RDNA (RDNA2), which covered subject to inherent and documented data limitations the first 12 months of the war and built on the and makes certain assumptions due to the ongoing RDNA1, which covered the first three months of the war. A further important limitation is that total needs war (Box 1). The RDNA3 presents an assessment of and priorities are presented at sector level and the physical damage to infrastructure and buildings, do not consider the strategic prioritization across quantifies indirect losses for 40 months (both actual sectors. Box 1. First and Second Ukraine Rapid Damage and Needs Assessment RDNA1 estimated US$97.4 billion in direct damage (between February 24 and June 1, 2022), US$252 billion in losses (comprising 3 months of actual losses and 18 months of projected losses), and US$348.5 billion in recovery and reconstruction needs (over 10 years). RDNA2 estimated US$134.7 billion in direct damage (between February 24, 2022, and February 24, 2023), US$289 billion in losses (comprising 12 months of actual losses and 18 months of projected losses), and US$410.6 billion in recovery and reconstruction needs (over 10 years). A sum of US$14 billion was estimated to address 2023 implementation priorities. Sources: World Bank, GoU, and EC, “Ukraine Rapid Damage and Needs Assessment,” 2022, Link ; World Bank, GoU, EC, and UN, “Ukraine Rapid Damage and Needs Assessment: February 2022–February 2023,” March 2023, Link. Box 2. RDNA3 key definitions Damage: Direct costs of destroyed or damaged physical assets and infrastructure, valued in monetary terms. Costs are estimated considering the replacement price prevailing before the invasion. Loss: Changes in economic flows resulting from the war, valued in monetary terms. Examples include disrupted services, increased operating costs, loss of revenue for authorities/private sector, and debris removal. Needs: Costs for repair, restoration, and reconstruction, considering a build back better premium, such as improvements for energy efficiency (EE), modernization, and sustainability standards, as well as factors such as inflation, surge pricing due to volume of construction, higher insurance, and so forth. Needs are expressed in monetary terms according to market prices prevailing as of December 31, 2023. Needs do not equal the sum of damage and losses. 9 Government Portal, “European Parliament Approves the Launch of the Ukraine Facility Program Worth EUR 50 Billion over 2024–2027,” October 17, 2023, Link. EXECUTIVE SUMMARY 13 Figure 1. Spatial evolution of the war until December 31, 2023, and Ukraine RDNAs MARCH 1, 2023 – DECEMBER 31, 2023 (FEBRUARY 2022 – JUNE 1, 2022) RDNA1 FEBRUARY 2022 – DECEMBER 31, 2023 JUNE 1, 2022 – FEBRUARY 28, 2023 (FEBRUARY 2022 – FEB 2023) RDNA 2 (FEBRUARY 2022– DECEMBER 31, 2023) FEBRUARY 2022 - MAY 31, 2022 RDNA3 (RDNA1&2) Source: Assessment team. Note: Map is based on ACLED, considering average monthly conflict events. For ACLED, see Clionadh Raleigh et al., “Introducing ACLED: Armed Conflict Location and Event Data,” Journal of Peace Research 47, no. 5 (2010): 651–60, Link. Note: Conflict events includes battles and explosions/remote violence as classified per ACLED methodology. RDNA = rapid damage and needs assessment. Source: Assessment team. Note: Map is based on Armed Conflict Location and Event Data (ACLED), considering average monthly conflict events. For ACLED, see Clionadh Raleigh et al., “Introducing ACLED: Armed Conflict Location and Event Data,” Journal of Peace Research 47, no. 5 (2010): 651–60, Link. Conflict events includes battles and explosions/remote violence as classified per ACLED methodology. RDNA = rapid damage and needs assessment. Summary of Damage and Needs Direct damage has not escalated substantially since the second assessment (Figure 3), when it totaled The RDNA3 estimates that up to US$152 billion US$135 billion11 (€126 billion) – due to limited shifts (€138 billion)10 in direct damage to buildings and in the front line of war; however, the impacts on infrastructure has resulted from nearly two years Ukraine remain immense. According to the current of war (see key results in Figure 6). The most assessment, 10 percent of the total housing stock of affected sectors have been housing (almost US$56 Ukraine has been either damaged or destroyed. As a billion, or 37 percent of total damage), transport result, millions of people have lost their homes and (almost US$34 billion, or 22 percent), commerce and need to secure shelter from an increasingly limited industry (almost US$16 billion, or 10 percent), energy pool of homes. There has also been a stark increase (almost US$11 billion, or 7 percent), and agriculture in damage in several other sectors: environment, (US$10 billion, or 7 percent). In the transport sector, natural resources, and forestry; irrigation and water damaged or destroyed assets include 8,400 km of resource management; water supply and sanitation; motorways, highways, and other national roads; over municipal services; emergency response and civil 140 bridges on the national road network and 150 protection; commerce and industry; and culture and bridges on the oblast and village roads; and more tourism. In part, this escalation of damage is due than 50km of railways lines, 83 railways bridges, and to the June 2023 destruction of the Kakhovka Dam over 1,400km of railways catenary lines have been and HPP, which resulted in a threefold increase in damaged or destroyed. Across sectors, Donetska, damage to the aquaculture and fishery industries. Kharkivska, Luhanska, Zaporizka, Khersonska, and Increased attacks on cultural heritage sites in areas Kyivska oblasts have sustained the greatest damage protected under the World Heritage Convention – (Figure 2). such as Lviv and Odesa cities – are reflected in an almost 33 percent increase in damage in the culture sector. Some estimates have increased (e.g., for the 10 US$ to € exchange rate: 0.906 as of December 31, 2023. 11 RDNA3 uses the same exchange rate as RDNA2, while RDNA1 used a different exchange rate. Damage reported under RDNA1 and RDNA2 is not double counted under RDNA3. 14 EXECUTIVE SUMMARY Figure 2. Extent of damage by region as of February 2023 (left) and December 31, 2023 (right) Source: Assessment team. Note: The maps draw on damage data as collected and assessed under the RDNA2 (left) and RDNA3 (right) respectively. There were data limitations for certain regions. Figure 3. Comparison of damage in RDNA2 and RDNA3 (billion US$) 60 50 40 30 20 10 0 Housing Education Health Social Protection Culture and Tourism Energy and Extractives Transport Telecommunications and Digital Water Supply and Sanitation Municipal Services Agriculture Commerce and Industry Irrigation and Water Resource Management Finance and Banking Environment and Forestry Emergency Response and Civil Protection Governance and Public Administration Management of explosive hazards RDNA2 RDNA3 Source: Assessment team. Note: x axis = US$ billion, y axis = sectors under RDNA2 and RDNA3. RDNA2 damage covers the period February 24, 2022, to February 24, 2023, while RDNA3 damage covers the period February 24, 2022, to December 31, 2023. emergency response and civil protection sector) or times the estimated nominal GDP of Ukraine decreased (e.g., for the health sector) due to new and for 2023. These considerable needs arise from a improved data,12 changes in subsector classification,13 war that has spanned a large geographical area or adjustments in methodology and assumptions.14 (including urban areas) for an extended period of time. The costs — estimated within a period of As of end-December 2023, recovery and 10 years — include measures required for lower reconstruction needs are estimated at US$486 energy intensity and more resilient, inclusive, billion (€440 billion), which is approximately 2.8 and modern standards, as well as surge pricing 12 Sectors that used new or more precise data include agriculture, culture and tourism, commerce and industry, and emergency response and civil protection. In the health sector, baseline data were updated, leading to a decrease in damage. 13 The RDNA1 and RDNA2 included district heating under the energy sector, whereas RDNA3 includes it under the municipal sector. 14 In the transport sector, some cost assumptions were updated, while in the commerce and industry sector, new data allowed new calculation and an adjusted methodology. EXECUTIVE SUMMARY 15 (commonly observed when large spatial areas are of emergency road repairs were made, 115 road reconstructed), global inflationary pressures, and bridges were replaced with temporary structures, higher insurance premiums. and more than In the transport sector, basic road and rail connectivity has been restored in areas where Housing needs are the highest (over US$80 billion, the GoU regained control; the largest efforts focused or 17 percent of the total), followed by transport on Kharkivska, Chernihivska, Kyivska, and Sumska (almost US$74 billion, or 15 percent), commerce oblasts, where over 2,000 km of emergency road and industry (US$67.5 billion, or 14 percent), repairs were made, 115 road bridges were replaced agriculture (US$56 billion, or 12 percent), energy with temporary structures, and more than 25 km of (US$47 billion, or 10 percent), social protection railways lines, and 46 rail bridges were repaired or and livelihoods (US$44 billion, or 9 percent), rebuilt. The Shandor gate of the Kazarovytska Dam and explosive hazard management (almost 35 was repaired, and the Slovyansk water monitoring billion, or 7 percent). Across all sectors, the cost of laboratory (Donetska oblast) was again made debris clearance and management alone reaches operational reducing current needs in the irrigation almost US$11 billion. Regions with the greatest sector. net change in needs since February 2023 include Kyivska, Dnipropetrovska, Donetska, Khersonska, The increase in needs compared with RDNA2 Kharkivska, Zaporizka, and Odeska. (US$411 billion/€372 billion) is overall commensurate with the increase in observed Needs that have already been met by the GoU with damage and proportionate to RDNA2 (see Figure the support of its partners have been deducted 4). For example, increases in damage to commerce from current needs. For example, according to and industry, agriculture, and water supply and the GoU data, in 2023, US$1 billion was disbursed sanitation translate into increased needs. However, from state budget and donor funds for housing successful efforts across sectors to collect data, sector recovery, with most being dedicated to the update cost estimates and further prioritize needs repair and reconstruction of damaged assets. In the also reduced overall costs in some cases. For education sector, some 500 educational institutions example, in the transport sector, a greater focus were rebuilt, and since January 2023, the share of on recovery and reconstruction of core services educational institutions with shelters has increased and completed repairs contribute to a 20 percent from 68 percent to 80 percent. In the transport reduction in needs. In the finance and banking sector, sector, basic road and rail connectivity has been war-related credit losses decreased. The continued restored in areas where the GoU regained control; the decrease in costs associated with explosive hazard largest efforts focused on Kharkivska, Chernihivska, management is a testament to ongoing efforts to Kyivska, and Sumska oblasts, where over 2,000 km assess areas for potential explosive contamination. Figure 4. Comparison of needs in RDNA2 and RDNA3 (billion US$) 100 90 80 70 60 50 40 30 20 10 0 Housing Education Health Social Protection Culture and Tourism Energy and Extractives Transport Telecommunications and Digital Water Supply and Sanitation Municipal Services Agriculture Commerce and Industry Irrigation and Water Resource Management Finance and Banking Environment and Forestry and Civil Protection Governance and Public Administration Management of explosive hazards Emergency Response RDNA2 RDNA3 Source: Assessment team. Note: y axis = US$ billion; x axis = sectors under RDNA2 and RDNA3. Needs in both RDNA reports cover the period up to 2033. 16 EXECUTIVE SUMMARY Recovery and Reconstruction Given the magnitude and complexity of the needs, the GoU has taken an organized, sector-level Principles and Priorities for 2024 approach to recovery and reconstruction planning. financing Coordinated through the MCTID, the Ministry of Economy, and the Reforms Delivery Office of the Meeting the specified needs is critical for long- Cabinet of Ministers of Ukraine, line ministries worked term recovery and restoration of development across 20 sectors to identify project-level priorities, progress, but this will take time. Key factors driving determine financing needs, and monitor funding, this time frame are the war trajectory and financing implementation, and disbursement. This process availability. But absorptive capacity of the state was supported by workshops and consultations budget is also relevant, as is the implementation with experts from the RDNA sectoral teams, with capacity of, and coordination among, line ministries, discussions focused on technical, economic, and subnational authorities, civil society, community- social impacts of different project priorities and their based organizations, and implementing agencies. implementation feasibility and timeframes. Restoring Ukraine’s productive capacity and reversing the destructive impact of the war will This process identified US$9.5 billion (€8.6 billion) require significant public intervention. This includes needed in 2024 to address unmet funding for the rebuilding and improved planning of essential most urgent repair, recovery and reconstruction infrastructure, encouraging financing of promising priorities. Overall, the most urgent priorities businesses, and supporting the financial sector identified by line ministries require more than as the full financial cost of the war is revealed. US$15 billion (€13.6 billion) in public funding; at The readiness of the private sector to implement least US$5.5 billion (€5 billion) in funding for these capital investments and the availability of materials priorities is already met through the state budget and labor are also significant factors. To ensure and donor support, in addition to the US$3.6 billion the buy in of the private sector, targeted policies budgeted to support social protection (Figure 5). and reforms are critical to create an operating Among the six priority sectors defined by the GoU environment conducive to donor support, private ministries, the largest share of public expenditures sector investment, and return of people. However, is for the industry and services sector (nearly there will be a tremendous social and economic cost US$3.6 billion), followed by housing and utilities if the most urgent needs are not met in the shortest (US$3.1 billion). Energy, social infrastructure and possible time frame—and this cost will be borne services (mainly education and health) and transport especially by the poorest and most vulnerable. account for US$2.7 billion, US$2.4 billion and US$2.3 billion of priorities, respectively, with another US$1.2 billion needed for cross-sectoral priorities.15 Some additional urgent strategic priorities fall outside the RDNA3 (Box 3). Box 3. Additional urgent strategic priorities Beyond the RDNA3 recovery and reconstruction projects identified above, the GoU has identified around US$3 billion in additional strategic 2024 priorities16 as part of multiannual projects to support economic growth and security. These include: US$2 billion for nuclear power plants (out of a total estimate of US$8.9 billion for several nuclear projects); US$700 million for additional high-level protection for substations (total project cost is US$2.1 billion); and around US$280 million for reconstruction of key refineries (total project cost is US$2.5 billion). 15 Using Government of Ukraine sectoral definitions, industry and services includes agribusiness, industry and commerce, and irrigation; housing and utilities includes: housing, central heating, energy efficiency, municipal services, waste management, and water supply and sanitation; transport includes transport and postal services; social infrastructure and services includes culture, education, health, and social protection; and cross-sectoral includes: demining, emergency response and civil protection, democracy, justice and human rights, and telecom, digital, and cybersecurity. 16 Due to confidentiality reasons and the innovative nature of some of these projects. the Bank cannot fully validated validate the cost estimates for this projects. EXECUTIVE SUMMARY 17 Figure 5. Summary of RDNA3 recovery and reconstruction priorities and funding needs for 2024 as identified by Ukrainian authorities RDNA3 RECONSTRUCTION AND RECOVERY PRIORITIES Recovery and reconstruction public Private sector (estimated)a Social protectionc expendituresb ~US$11 BILLION ~US$15 BILLION ~US$3.5 BILLION Working capital + Investments housing financing ~US$5.5 BILLION ~US$5.5 BILLION Unmet funding needs Already fundedd ~US$9.5 BILLION ~US$5.5 BILLION Subsidies, guarantees and Public investment Other public non-capital expenditures other financial support ~US$3.5 BILLION ~US$4.5 BILLION ~US$1.5 BILLION Source: Assessment team, based on data in sector templates prepared by GoU line ministries and coordinated by the MCTID. a. Private sector includes firms and households; figures are estimated based on assumptions of investment and lending multipliers of various public support instruments; note that private sector investments not estimated in RDNA2. b. Includes expenditures and investments from Government and SOEs as well from donors and international financial institutions. c. Social transfers are part of RDNA-defined needs but are not included in GoU RDNA priorities, as they are considered an ongoing core responsibility covered by the state budget. Figure excludes non-RDNA-related pensions. d. Including through state and local budgets; loans and grants from international financial institutions and donors; and SOE own funds; includes funding under negotiation but not finalized. Public investments have the potential to catalyze up and its concentration in industry, commerce, to US$5.5 billion in private investment for recovery agriculture, and housing in the near term, is in line and reconstruction in 2024.17 Meeting the priorities with the estimations from the International Finance identified by line ministries for 2024 across sectors Corporation (IFC) that between one-sixth and one- would require more than US$8 billion in public and third of the needs identified in the RDNA2 could be state-owned enterprise (SOE) investments, along financed by the private sector, depending on reforms with close to US$5 billion in transfers, subsidies, and public interventions.18 and guarantees to de-risk financing and overcome constraints to private investment and nearly US$2 While RDNA3 priorities defined by line ministries billion in other expenditures. These instruments represent an increase over RDNA2 priorities can help catalyze up to US$5.5 billion in private (US$15.3 billion compared to US14.1 billion) and investment, while also facilitating a similar volume of 2023 execution, implementation will be a multi- working capital (through programs such as 5-7-9 for year process. Public expenditures required to firms and preferential mortgages for consumers) to address identified RDNA3 priorities are 8.5 percent maintain the functioning of firms and supply chains higher than those identified for RDNA2, which is less and stimulate consumer investment in the housing than half the growth of needs during this period. market. This level of private sector contribution, Moreover, despite relatively good performance 17 Private sector contributions are estimated using assumptions on investment multipliers for the proposed programs identified by line ministries. 18 IFC, “Private Sector Opportunities for a Green and Resilient Reconstruction in Ukraine,” 2023, Link. 18 EXECUTIVE SUMMARY in executing on mobilized commitments in 2023, Beyond strategic prioritization, several key actions RDNA3 priorities are more than twice the level in the short term can improve the effectiveness of of execution in 2023 (US$7.2 billion). Increased recovery and reconstruction: priorities in RDNA3 reflects growing needs but also a recognition of the importance of planning and • Accelerate the reform agenda, including the financing across multi-year investment program framework of the Government’s Ukraine Plan cycles, especially for large infrastructure projects under preparation. This will help foster economic that may have long procurement lead times and growth, modernize the economy and institutions, requirements for funding in advance of procurement. and promote strengthening of public sector Thus, funding commitments may be needed in 2024, capacity at the local level, in alignment with the even if actual expenditure takes place over more than standards and policies of the EU. one year. Planning and financing across multi-year investments will become more critical as Ukraine • Strengthen public sector capacity to plan, prepare, moves from recovery to full-scale reconstruction. and deliver recovery and reconstruction activities, through continuous improvements in systems for Moving forward on recovery and reconstruction public finance management, procurement, and in the context of resource and implementation strategic and medium-term budget planning. constraints will require further strategic In addition, strengthen the institutional and prioritization, supported by timely and predictable technical capacities of authorities and relevant funding. In the context of the likely challenges in stakeholders alongside cross-institutional mobilizing an additional US$9.5 billion beyond existing coordination and cross-sectoral prioritization. budget financing in 2024, the GoU is discussing The Government’s adoption and implementation processes to carry out strategic prioritization across of the PIM reform roadmap will play a key role in sectors to ensure that the most critical needs are this respect. met, considering among others implementation capacity of different sectors, priorities related to • Leverage opportunities for private investment, different geographic areas, needs of communities including through an accelerated agenda of pro- and vulnerable groups, and financing availability. At competition reforms and deeper integration the same time, securing medium-term, predictable with the EU and international markets. Reforms funding commitments from donors is critical and public interventions that can boost private for enabling implementing agencies to plan and sector investment and enable the private sector manage long and complex procurement. Meeting to play a greater role in reconstruction include this requirement would be facilitated by better liberalization of energy prices; privatization of (or integrating priority setting and project planning into private participation in) the transport and banking the medium-term budget planning process as well as sectors; public investments in irrigation, and by implementing other steps envisaged by the Public public-private partnerships (PPPs) in a variety of Investment Management (PIM) Reform Roadmap, sectors. adopted by the GoU, including establishment of a Strategic Investment Council. • Strengthen the capacity of local authorities in strategic planning, project management, procurement, execution of investments, and stakeholder engagement as well as relevant technical skills to build modern, inclusive, and resilient communities that will thrive. EXECUTIVE SUMMARY 19 Figure 6. RDNA3 key results: damage, needs, and 2024 financing priorities 1.2 3.6 2.3 US$15 B 2024 PRIORITIES 2.4 3.1 2.7 $152 B $486 B DAMAGE RECOVERY AND Cross-sectoral Transport RECONSTRUCTION NEEDS Social infrastructure and services Energy Quantifies direct physical Estimates needs considering damage to infrastructure building back better Housing and utilities Industry and services and buildings Source: Assessment team. Note: US$15 billion reflects sectoral assessment and does not consider social protection needs already included in the budget. Figure 7. Comparison of damage and needs in RDNA3 and RDNA2 (billion US$) $180 B $160 B $140 B $120 B $100 B $80 B $60 B $40 B $20 B $0 B Social Sectors Infrastructure Sectors Productive Sectors Cross Cutting Sectors RDNA 2 Damage RDNA 3 Damage RDNA 2 Needs RDNA 3 Needs Source: Assessment team. Note: y axis = US$ billion; x axis = sectors under RDNA2 and RDNA3. RDNA2 damage covers the period February 24, 2022, to February 24, 2023, while RDNA3 damage covers the period February 24, 2022, to December 31, 2023. Needs are counted within a period of 10 years. . 20 INTRODUCTION INTRODUCTION 2022 Invasion and War Trajectory Since Russia’s invasion of Ukraine in February 100,000 residents were directly affected by the 2022, the war has entered varying phases of resulting deluge.20 More information about the intensity, as depicted in Figure 8. The early months impacts of the dam breach is in Box 4. During the brought destruction in several cities, municipalities last months of 2023, severe attacks were carried and regions, especially where the Government of out on ports, including in Odeska and Mykolaivska Ukraine (GoU) temporarily lost control. Instances of oblasts and along the Danube River, and attacks on destruction and disruption correlate strongly with infrastructure increased in intensity, particularly in areas where activity relating to the conduct of war the southeast. Unpredictable air and combat drone was frequent and intense. From April 2022 onwards, attacks, as well as artillery assaults, extended the GoU has brought more than half of this territory beyond established battle zones, continue to impact back under its control, and broadly from summer cities like Kyiv. 2022 until presently, the main line of hostilities has not changed significantly. Missile and combat In 2023, the hostilities hotspots shifted toward drone attacks on Ukrainian critical infrastructure, Donetska and Zaporizka oblasts, where intense especially on energy infrastructure and housing, clashes occurred as Ukraine sought to gain control escalated in early October 2022 and continued over territories temporarily not under government through the autumn and winter of 2022/2023. control. Counteroffensive operations in spring 2023 Attacks were sustained across major cities and at expanded battlefields to Zaporizka and Khersonska least 16 Ukrainian regions, leaving millions of people oblasts. Notably, Zaporizka oblast faced heavy without electricity, water, and/or heating.19 artillery, missile attacks, and combat air/drone strikes during Ukraine’s attempts to regain control During 2023, there were regular intense attacks on during summer. The civilian toll has been heavy infrastructure mainly in the southeast, spanning throughout the war; the UN High Commissioner many regions. In the second year of the war, Russia for Human Rights reported in December 2023 over focused its offensive on the East of Ukraine. The 10,000 civilian deaths and 18,500 injuries since Kakhovka Dam breach and destruction of the February 2022.21 According to statistics from the hydroelectric power plants (HPP) in June 2023 led Children of War GoU portal, as of December 9, 2023, to extensive flooding that impacted 80 settlements 19,546 Ukrainian children had been deported and/or across four oblasts: Khersonska, Mykolaivska, forcibly displaced to Russia.22 Dnipropetrovska, and Zaporizka. Approximately 19 United Nations High Commissioner for Refugees (UNHCR), “Ukraine Situation: Flash Update #35,” November 18, 2022, Link. 20 According to the PDNA, up to a million people lost access to drinking water, and 140,000 were deprived of electricity. See GoU and UN, “Post-Disaster Needs Assessment: 2023 Kakhovka Dam Disaster, Ukraine,” 2023, Link. 21 OHCHR. 2023. Statement of the UN High Commissioner for Human Rights, 19 December 2023, Link. 22 GoU’s Children of War website, Link. INTRODUCTION 21 Figure 8. Spatial evolution of the war until December 31, 2023, and Ukraine RDNAs MARCH 1, 2023 – DECEMBER 31, 2023 (FEBRUARY 2022 – JUNE 1, 2022) RDNA1 FEBRUARY 2022 – DECEMBER 31, 2023 JUNE 1, 2022 – FEBRUARY 28, 2023 (FEBRUARY 2022 – FEB 2023) RDNA 2 (FEBRUARY 2022– DECEMBER 31, 2023) FEBRUARY 2022 - MAY 31, 2022 RDNA3 (RDNA1&2) Source: Assessment team. Note: Map is based on ACLED, considering average monthly conflict events. For ACLED, see Clionadh Raleigh et al., “Introducing ACLED: Armed Conflict Location and Event Data,” Journal of Peace Research 47, no. 5 (2010): 651–60, Link. Note: Conflict events includes battles and explosions/remote violence as classified per ACLED methodology. RDNA = rapid damage and needs assessment. Source: Assessment team. Note: Map is based on on Armed Conflict Location and Event Data (ACLED), considering average monthly conflict events. For ACLED, see Clionadh Raleigh et al., “Introducing ACLED: Armed Conflict Location and Event Data,” Journal of Peace Research 47, no. 5 (2010): 651–60, Link. Conflict events includes battles and explosions/remote violence as classified per ACLED methodology. RDNA = rapid damage and needs assessment. Box 4. Summary of the assessment of the Kakhovka Dam breach The Government of Ukraine and the United Nations carried out a Post-Disaster Needs Assessment (PDNA) to evaluate the extent of the damage and losses incurred due to the destruction of the Kakhovka Dam. The PDNA estimated approximately US$2.79 billion in direct damage to infrastructure and assets as a result of the event and losses exceeding US$11 billion. The impact on the environment is expected to be particularly long-lasting. The energy and housing sectors were hit the hardest in terms of direct damage; the energy sector suffered US$1.26 billion in damage, and housing damage amounted to over US$1.1 billion. The environmental and energy sectors recorded the highest losses, which have the potential to undermine long-term stability and recovery. Based on a build back better approach, the PDNA estimates the total recovery and reconstruction needs to be approximately US$5.04 billion, with US$1.82 billion required in the immediate/short term. The report puts forth suggestions for addressing short-term needs in 2023–2024, and for tailoring the response to meet recovery and reconstruction needs over the medium and long term, spanning the next 10 years (until 2033). Source: GoU and UN, “Post-Disaster Needs Assessment: 2023 Kakhovka Dam Disaster, Ukraine,” 2023, Link. 22 INTRODUCTION Emergency and Humanitarian Response Since February 2022, the GoU has continued to US$3.4 billion worth of assistance, including provide and coordinate humanitarian support cash, emergency shelter and house repairs, food, to war-affected regions and populations. Online medicine, generators, protection services and humanitarian support platforms have been winter supplies. In 2023 the Humanitarian Country established to provide services, coordination, Team further reached 11 million people with life- and support to Ukraine; these are operated by saving assistance,24 particularly within front line state authorities and volunteers and include cash areas, through approximately US$2.69 billion assistance and housing allowances for IDPs and are worth of humanitarian funding from more 38 UN an important source of sustenance. member states and many other private donors.25 The UN development system has implemented As of February 2024, the EU, its member states, over US$1 billion in 2022-2023 in support to the and European financial institutions had made government’s early recovery efforts focusing on approximately €88 billion available to support community recovery investments in housing, energy, Ukraine.23 This includes humanitarian, economic, social infrastructure, humanitarian demining, and military support as well as funding for Ukrainian local economic development, mental health and refugees in the EU. Through the Union Civil psychological support as well as strengthening Protection Mechanism (UCPM), the EU has delivered the capacity of national systems and community 97,484 tons of assistance to Ukraine, including mobilization.26 items and equipment related to CBRN, shelter and shelter-related items (such as appliances, kitchen Since February 2022, the World Bank Group supplies, and bedding), and over 900 vehicles, has mobilized over US$39 billion  in emergency including ambulances and fire trucks. The EU has financing in support of the people of Ukraine to help deployed a range of rescEU assets, including power blunt the war’s widespread human and economic generators, medical equipment, temporary shelter impacts. About 94 percent of this mobilized capital units, and other specialized equipment, and it has comes from donor countries. The World Bank’s coordinated the medical evacuation of over 1,700 flagship financing instrument for Ukraine, the Public Ukrainian patients in urgent need of treatment. The Expenditures for Administrative Capacity Endurance total financial value of the assistance is estimated (PEACE) Project, enables international donors to at €796 million. The UCPM logistic hubs in Poland, provide support27 and is helping to sustain essential Romania, and Slovakia have played a crucial role in public service delivery, pensions for the elderly, and facilitating the delivery of support. social programs for the vulnerable. The World Bank also supports preparation and implementation of In response to the war, the United Nations in framework projects that reflect Ukraine’s emergency partnership with the humanitarian community relief needs, are aligned with the RDNA approach, have scaled up their presence in Ukraine and and are designed to be scalable to absorb additional supported 16 million people in 2022 through financing as it becomes available. Recovery and Reconstruction Efforts While the war is ongoing, the GoU is leading of Ukraine determines the priority areas for the recovery and reconstruction efforts in relevant recovery of Ukraine on an annual basis, mobilizes areas, having set up relevant institutional appropriate financial resources, and ensures structures (see Figure 9). The Cabinet of Ministers the involvement of international partners in the 23 EU assistance to Ukraine - European Commission (europa.eu). 24 Humanitarian partner reporting under the 2023 HRP, January 2024. Ukraine OCHA, Link. 25 Financial Tracking System, January 2024. Link. 26 UN Recovery Programming in Ukraine, November 2023, Link. 27 World Bank, “Supporting Ukraine through the War,” Link. INTRODUCTION 23 recovery process. In 2022, the National Council The GoU is also advancing several reforms for the Recovery of Ukraine from the War was related to the construction sector, decentralization established, co-chaired by the prime minister and reform, energy efficiency, as well as a reform the Office of the President.28 This council is charged of Public Investment Management (PIM). In with developing proposals for priority reforms and December 2023, the GoU has adopted a roadmap the plan for postwar recovery and development. The for the PIM reform, incorporating recommendations Government Office for the Coordination of European from the IMF and the World Bank. The roadmap and Euro-Atlantic Integration of the Secretariat of introduced the target PIM model that will the Cabinet of Ministers of Ukraine is responsible for streamline and adapt decision making process to coordinating the process of approximation to the EU the new challenges. It will  focus on  prioritization, in close cooperation with public authorities. financial sustainability, effectiveness and efficiency, timeliness, environmental sustainability, Also, in 2023, the GoU, jointly with the G7 countries inclusiveness and accessibility, transparency and and the EU, set up the Multi-Donor Coordination accountability. The GoU is currently developing a Platform for Ukraine to support Ukraine’s repair, detailed action plan for the implementation of the recovery, and reconstruction process and to help PIM reform. bridge the gap between needs and resources.29 The Platform is co-chaired by representatives of Several institutional and policy reforms have Ukraine, the EU, and USA. A number of international been implemented to support the recovery institutions, including Council of Europe Development and reconstruction process. The Ministry for Bank, European Bank for Reconstruction and Communities, Territories and Infrastructure Development, European Investment Bank, Development (MCTID or Ministry for Recovery) International Monetary Fund, Organisation for facilitates coordination and efficient reconstruction Economic Co-operation and Development, and the of war-affected regions.32 To support a more World Bank, actively contribute to the coordination systematic approach to planning the restoration of efforts of the platform. The platform meets Ukraine, the position of deputy prime minister for regularly to coordinate the support for Ukraine’s restoration of Ukraine was established; the minister financing needs and future economic recovery and in parallel heads the MCTID. The State Agency for reconstruction. Infrastructure Restoration and Development of Ukraine (the Agency for Restoration), through its The GoU is developing a Ukraine Plan linked to the territorial offices, is responsible for the largest planned Ukraine Facility by the EC (see below).30 infrastructure projects at the national level, support The Ukraine Plan is planned as a program of actions and implementation of regional and local recovery and reforms for the period 2024-2027, which will projects based on the requests of the relevant include macro-financial scenarios for recovery, project customers. The activities of the Agency for major sectoral reforms, with the view of priority Restoration are coordinated by MCTID. sectors for development, increasing the capacity to absorb investment, and cross-cutting issues such Territorial communities are responsible for as European integration, digital transformation, developing planning documents, establishing green transition, environmental protection, as well communication with international partners, as human capital.31 The plan’s development by the and implementing restoration projects in the GoU is coordinated by the Ministry of Economy of respective territories. This should be done in an Ukraine (MoE), in cooperation with representatives inclusive manner engaging and consulting with local of regional and local authorities, private sector, civil society. Regional state (military) administrations experts, and think tanks. (RSA/RMA) can be authorized to implement recovery projects on behalf of territorial communities. 28 Government Portal, “About the National Council for the Recovery of Ukraine from the War,” Link. 29 European Commission, “Ukraine: Multi-agency Donor Coordination Platform for Ukraine Kick-starts Work,” January 26, 2023, Link. 30 Government of Ukraine Portal, European Parliament approves the launch of the Ukraine Facility program worth EUR 50 billion over 2024-2027, October 2023. Link. 31 ibid. Decentralization and regional policy are considered part of sectoral reforms. 32 Government Portal, “Oleksandr Kubrakov Appointed Deputy Prime Minister for Restoration of Ukraine–Minister for Communities, Territories and Infrastructure Development of Ukraine,” December 1, 2022, Link. 24 INTRODUCTION Figure 9. Schematic illustration of national and local level institutions engaged in recovery and reconstruction GOVERNMENT OF UKRAINE | CABINET OF MINISTERS OF UKRAINE the highest body in the system of executive authorities, determines the priority areas for the recovery of Ukraine on an annual basis, mobilizes appropriate financial resources, and ensures the involvement of international partners in the recovery process THE MINISTRY FOR COMMUNITIES, TERRITORIES AND INFRASTRUCTURE DEVELOPMENT OF UKRAINE (MINISTRY FOR RESTORATION) • responsible for the formation and implementation of the recovery policy of the regions and territories of Ukraine • ensures overall coordination of recovery policies in close cooperation with line ministries MINISTRY OF ECONOMY LINE MINISTRIES THE STATE AGENCY FOR INFRASTRUCTURE RESTORATION Private sector engagement NATIONAL AND DEVELOPMENT OF UKRAINE MINISTRY OF FINANCE LEVEL (AGENCY FOR RESTORATION) ensure macroeconomic stability and effective mobilization and administration of public responsible for the largest infrastructure projects at the national level, funds support and implementation of regional and local recovery projects + 16 SECTORAL MINISTRIES based on the requests of the relevant project customers social; healthcare; energy; education; digital; environment; youth and sports; agro; strategic industries; internal affairs; foreign affairs; reintegration; veterans’ affairs; defense; justice; culture and information THE REFORMS DELIVERY OFFICE OF THE CABINET OF MINISTERS OF UKRAINE advisory body that assists the Government of Ukraine in developing and implementing priority reforms REGIONAL STATE (MILITARY) ADMINISTRATIONS (RSA/RMA) an act as customers of projects for the construction of critical and social infrastructure AGENCY FOR RESTORATION facilities, authorized to implement recovery projects on behalf of territorial communities TERRITORIAL OFFICES OBLAST / LOCAL LEVEL TERRITORIAL COMMUNITIES / HROMADAS • key recipient of the results of the recovery • responsible for developing planning documents, establishing communication with international partners, and implementing restoration projects Source: Assessment team. The EU has committed to playing a strong role in The UN in Ukraine leverages its large operational Ukraine’s recovery and reconstruction, which is footprint (24 agencies, 3,000 personnel) in linked to the implementation of reforms consistent communities across the country to support with Ukraine’s European path. In keeping with this communities to implement recovery and role, the EC has proposed a multi-annual instrument reconstruction initiatives. These communities are to support Ukraine between 2024 and 2027. This is mobilizing, articulating their needs, and building the Ukraine Facility, which aims at supporting the their capacity to drive their own recovery. The UN state’s basic needs as well as Ukraine’s recovery, has a strong focus on supporting the inclusion of reconstruction, and modernization, in part through marginalized groups and seeks to ensure that the catalyzing of private sector investment tied closely to recovery process benefits those farthest behind, Ukraine’s EU path. 33 The European Council confirmed reduces inequalities, and promotes social cohesion in February 2023 that the overall resources made and livelihoods. In collaboration with the GoU and available for the Ukraine Facility will be €50 billion. MCTID, the UN in Ukraine has established a flexible In December 2023, the European Council, in line Ukraine Community Recovery Fund.34 The fund with the EC’s recommendations in November 2023, supports communities that are driving their own agreed to open accession negotiations with Ukraine. recovery efforts in targeted communities to reduce This agreement marks a historical step in the EU current and prevent future humanitarian needs; enlargement, and the explanatory presentation of to rebuild the social and economic fabric; and to the acquis have started. provide the conditions for people to voluntarily return to their homes and rebuild their lives. These 33 European Commission, “Questions and Answers—A New Ukraine Facility,” June 20, 2023, Link. 34 United Nations, “Ukraine Community Recovery Fund,” Concept note “Ukraine Community Recovery Fund’. Link. INTRODUCTION 25 community-focused early recovery efforts sit in the administrative capacity of the government. The URTF nexus of humanitarian, recovery, and social cohesion operates under the overarching World Bank Multi- interventions. Donor Resources for Institutions and Infrastructure (MRII - МРІЇ ) for Ukraine Facility, which is part of In December 2022, the Ukraine Relief, Recovery, broader international support to Ukraine. MRII - Reconstruction and Reform Trust Fund (URTF)35 МРІЇ takes a phased and multipronged approach to was set up by the World Bank to channel donor mobilizing financing, using guarantees, co-financing, support.36 The URTF provides a coordinated financing parallel financing, and other financial instruments to and support mechanism that helps the GoU sustain help Ukraine. The multisectoral support provided by its administrative and service delivery capacity, the World Bank during the war builds on a decades- conduct relief efforts, and plan and implement long development partnership and sets the stage Ukraine’s reconstruction and reform agenda. The for resilient reconstruction when peace returns.37 URTF is financing projects with a focus on repairing A list of ongoing World Bank–supported projects is damaged infrastructure, restoring public services, in Box 5. Through the Economic Resilience Action and sustaining economic activities in the areas Program, the International Finance Corporation of health care, energy, logistics, agriculture, and (IFC) is providing for the immediate needs of housing. As of January 2024, URTF has over US$1.5 Ukraine’s private sector with a US$2 billion package billion in contributions from 14 donor countries, to help build private sector resilience and support making grants to support early recovery and livelihoods.38 Box 5. Ongoing World Bank–supported projects The Health Enhancement and Lifesaving Ukraine Project (HEAL), approved in December 2022, is helping restore and improve access to health care and address new and urgent needs for health services due to the war. The Repairing Essential Logistics and Network Connectivity Project (RELINC), approved in February 2023, is helping repair damaged critical road and rail networks; the goal is to reconnect communities and improve westward transport linkages that mitigate impacts of Black Sea disruption. The Restoration Project of Winterization and Energy Resources, approved in April 2023, is helping restore essential energy services by financing emergency repairs to the power transmission and heating infrastructure. The Housing Repair for People’s Empowerment (HOPE) Project, approved in August 2023, is helping more than 100,000 families in Ukraine make urgent repairs to homes damaged by the war. The Ukraine Agriculture Recovery Inclusive Support Emergency (ARISE) Project, approved in October 2023, targets the agriculture sector, which was negatively impacted by the war, with further ramifications for food and nutrition security globally. The ARISE Project will help more than 90,000 farmers access affordable loans and receive grants for agricultural production. The Investing in Social Protection for Inclusion, Resilience, and Efficiency (INSPIRE) Project, approved in November 2023, will provide additional support to 29 social assistance programs targeting the most vulnerable war-affected people in Ukraine. The poorest households need adequate support to mitigate the impacts of the ongoing war and avoid slipping further into poverty. The Ukraine Relief and Recovery Development Policy Loan (DPL), approved in June 2023, is designed to address the needs of the newly poor and displaced by providing relief to households; to enhance the transparency and accountability of public resource expenditures; and to help markets function better during and after the war. Source: The World Bank in Ukraine website. Link. 35 World Bank. 2024. Ukraine Relief, Recovery, Reconstruction and Reform Trust Fund (URTF). Link. 36 World Bank, “Ukraine Relief, Recovery, Reconstruction and Reform Trust Fund (URTF),” December 16, 2022, Link. 37 World Bank, “The World Bank and Ukraine: Laying the Groundwork for Reconstruction in the Midst of War,” November 30, 2023, Link. 38 IFC, “IFC Launches $2 Billion Response Package to Support Ukrainian Private Sector,” December 15, 2022, Link. 26 INTRODUCTION RDNA3 Objectives and Methodology The Third Rapid Damage and Needs Assessment and the United Nations. This approach has been (RDNA3) considers social, infrastructure, and applied globally in post-disaster and war contexts productive sectors as well as cross-cutting sectors to inform recovery and reconstruction planning. The and issues. The RDNA3 assesses the impact during report uses standard terminology; key terms are the period February 24, 2022, to December 31, highlighted in Box 7. The use of the global approach 2023—almost two years of the war. In doing so, it and standard terminology facilitates any future builds on the foundations and analytics of RDNA1, assessments. An integral part of the assessment which covered the period between February 24 and across all sectors is the understanding of the direct June 1, 2022; the RDNA2, which covered the period and indirect damage and loss and human impacts; between February 24, 2022, and February 24, 2023 application of the build back better (BBB) approach; (Box 6). The RDNA3 takes also into account important and use of principles of green, resilient, inclusive, assessments, including the 2023 Kakhovka Dam and sustainable recovery and reconstruction in Post-Disaster Needs Assessment (PDNA) and estimating needs. Where information was available, several other analytics.39 recovery and reconstruction needs already met were deducted from the needs estimates. In line The RDNA3 follows a globally established and with the exchange rate used in RDNA2, the RDNA3 recognized PDNA methodology jointly developed uses the rate of US$1 = UAH 36.5686.40 Regions are by the World Bank, the European Union (EU), organized according to groupings presented by the Box 6. First and Second Ukraine Rapid Damage and Needs Assessment (RDNA1 and RDNA2) RDNA1: Focused on the first three months of the war. It estimated US$97.4 billion in direct damage (covering the period between February 24 and June 1, 2022), US$252 billion in losses (which considered in 21 months in total comprising 3 months of actual and 18 months of projected losses), and US$348.5 billion in recovery and reconstruction needs (10 years). The most damage-affected sectors were housing (40 percent of total damage), transport (31 percent), and commerce and industry (10 percent). The most affected oblasts in terms of direct damage were Donetska, Luhanska, and Kharkivska, followed by Kyivska, Chernihivska, and Zaporizka. RDNA2: Focused on the first year of the war. It estimated US$134.7 billion in direct damage (covering the period between February 24 and February 24, 2023), US$289 billion in losses (which considered in 30 months in total comprising 12 months of actual loss and 18 months of projected losses), and US$410.6 billion in recovery and reconstruction needs (10 years). The RDNA2 estimated implementation priorities for 2023 at around US$14 billion, or close to 3.5 percent of total needs identified. The most affected sectors were housing (38 percent), transport (26 percent), energy (8 percent), commerce and industry (8 percent), and agriculture (6 percent). Donetska, Kharkivska, Luhanska, Zaporizka, Kyivska, and Khersonska oblasts have sustained the greatest direct damage. Sources: World Bank, GoU, and EC. Ukraine Rapid Damage and Needs Assessment,” Link ; World Bank, GoU, EC, and UN. Ukraine Rapid Damage and Needs Assessment: February 2022–February 2023,” March 2023, Link. 39 GoU and UN, “Post-Disaster Needs Assessment: 2023 Kakhovka Dam Disaster, Ukraine,” 2023, Link. Other assessments include International Finance Corporation (IFC), “Private Sector Opportunities for a Green and Resilient Reconstruction in Ukraine,” 2023, Link; Kyiv School of Economics (KSE), “Report on Damages to Infrastructure Caused by Russia’s War against Ukraine One Year after the Start of the Full-Scale Invasion,” Link; UN Environment Programme (UNEP), “The Environmental Impact of the Conflict in Ukraine: A Preliminary Review,” 2022, Link; United Nations Development Programme (UNDP), “Ukraine: Human Impact Assessment,” June 2023, Link; UNESCO, “In the Face of War, UNESCO’s Action in Ukraine,” 2023, Link ; UNDP, “Towards a Green Transition of the Energy Sector in Ukraine,” 2023, Link ; UN, World Bank, and Government of Ukraine, “Ukraine Energy Damage Assessment,” 2023, Link; Food and Agriculture Organization of the United Nations (FAO), “Ukraine: Impact of the War on Agricultural Enterprises,” 2023, Link. 40 For conversions from US$ to €, the exchange rate: 0.906 as of the end December 2023 was used. INTRODUCTION 27 GoU in 2022, updated based on the current situation. RDNA3 also includes short-term priorities identified Frontline regions are those areas temporarily not by Ukrainian line ministries that need financing in under government control and/or areas of active 2024. These priorities have been defined by line war; support regions are those providing logistics ministries through an ongoing process of project for defense and humanitarian cargo, backline development and monitoring and involving extensive regions are those protecting export/import logistics consultations with development partners. Sectoral hubs and evacuated enterprises, and regions where priorities, to be monitored and refined over time, are the government has regained control are areas intended to inform investment planning, mobilization recovering from sustained damage. of resources, and implementation. The RDNA3 also includes an overview of key requirements to While much of this report focuses on areas where facilitate more effective and efficient recovery and the impact of the war can be financially quantified, reconstruction planning and implementation. it also provides a qualitative description of how people’s lives have been altered. This analysis The RDNA3 faced several constraints and relied follows the specific groups/topics identified. In on several specific assumptions. The sector addition to the four groups/topics covered in RDNA2 assessments were produced in a short timeframe (displaced persons and returnees, persons with with sometimes significant limitations related to data disabilities, veterans and their families, and gender- availability (such as for data related to the private specific impacts), RDNA3 includes two more: (i) sector, certain geographic areas, or comprehensive youth and child protection and rights; and (ii) elderly. information on recovery and reconstruction needs The human impacts chapter also describes a met) and data sensitivity (such as for critical energy broader set of needs and priorities that cut across infrastructure). Field verification was not possible sectors and that can improve people’s lives as due to the ongoing war. To ensure the relevance of the war continues. Addressing this set of needs the estimations, substantial efforts have been made and priorities will also contribute toward more to improve the accuracy of the information that was socially inclusive development for Ukraine beyond collected, analyzed, and verified. The RDNA3 does the immediate response. It should be noted that in not provide asset-level information and instead addition to the group-specific issues assessed, there provides portfolio level information at the level are population-wide human impacts felt by everyone of oblast. Damage to asset types considers three in Ukraine, as mentioned across sectoral chapters in levels: fully destroyed, damaged, and no/minor the report. damage. Since loss is typically measured until “normality” is restored, the calculation includes in While focusing on war-related impacts and needs, total 40 months, which included 22 months between the RDNA3 contributes to and complements other February 24, 2022, and December 31, 2023, as well ongoing efforts related to Ukraine’s reconstruction, as an additional 18 months. The geographic scope modernization, and integration into the European includes all areas under government control on community. The principles of building back better February 1, 2022. An important limitation is that the are aligned with the vision and investments to be total needs and priorities are presented at sector set by the Government’s Ukraine Plan and the EU level and do not consider balancing of one sector’s Ukraine Facility, both under preparation, that will needs against those of another sector. The RDNA3 support Ukraine’s reform agenda to become a is not intended for legal or compensatory claims. modern country, aligned with EU policies and ready While the assessment considers human impacts of to join the EU. Results of the RDNA3 can also inform the war, there continue to be gaps, and the report and complement other sector-specific analytics as can serve as the basis for further analysis. Future well as ongoing efforts by the GoU and partners analyses may also focus more in depth on the reform to identify key reforms, medium-term economic and growth agenda – including different types of growth opportunities, and opportunities for private reforms depending on war trajectory, priorities and sector engagement. expected outcomes, as well as the deterioration of infrastructure and services in areas with limited or Building on the analysis of 2023 priorities in RDNA2 no fighting due to reduced investment during the and complementary to the needs’ estimation, the war and therefore increased investment needs. 28 INTRODUCTION Box 7. RDNA3 definitions Damage: Direct costs of destroyed or damaged physical assets and infrastructure, valued in monetary terms. Costs are estimated based on replacing or repairing physical assets and infrastructure, considering the replacement price prevailing before the war. The data cut-off for RDNA3 was December 31, 2023. Loss: Changes in economic flows resulting from the war, valued in monetary terms. Examples include increased operating costs and loss of revenue for authorities/private sector. Needs: Value associated with the resumption of prewar normality through activities such as repair and restoration, including a premium linked to build back better principles—e.g., improved energy efficiency, modernization efforts, and sustainability standards—as well as factors such as global inflation, surge pricing due to volume of construction, higher insurance, and so forth. Needs are expressed in monetary terms according to market prices prevailing as of December 31, 2023. Needs do not equal the sum of damage and losses. Needs met were discounted as relevant. Build back better: Relates to improvements integrated into rehabilitation and reconstruction of damaged assets, including improved functionality, energy efficiency, universal access, disaster and climate resilience (greening, decarbonization), and critical modernization measures, such as right-sizing and right-siting of infrastructure and services. This costing is added in the needs calculation, and each sector uses appropriate standards and costing assumptions. Recovery and reconstruction financing priorities for 2024: Priorities refer to recovery and reconstruction needs identified by GoU line ministries, that are considered highest priority for urgent delivery and require funding in 2024. Investment priorities account for both capital and current expenditures and consider expenditures that would be made by central and local governments, by state-owned enterprises (SOEs), by the private sector (including households), or by other actors (e.g., development partners). 29 Government of Ukraine – Trostianets Hospital SUMMARY OF IMPACTS AND NEEDS 30 SUMMARY OF IMPACTS AND NEEDS Summary of Damage motorways, highways, and other national roads, over 140 bridges on the national road network and 150 The total direct damage to buildings and bridges on the oblast and village roads, more than infrastructure across sectors is estimated at In transport, this includes 8,400 km of motorways, approximately US$152 billion (Table 1, Figure highways, and other national roads, over 140 bridges 10). The most affected sectors have been housing on the national road network and 150 bridges on the (almost US$56 billion, or 37 percent of total damage), oblast and village roads, more than 50 km of railways transport (almost US$34 billion, or 22 percent), and 83 railway bridges damaged or destroyed. commerce and industry (almost US$16 billion, or 10 percent), energy (almost US$11 billion, or 7 percent) RDNA3 records changes in damage for some and agriculture (US$10 billion, or 7 percent). Across sectors for several reason since the RDNA2 (see sectors, Donetska, Kharkivska, Luhanska, Zaporizka, Figure 11). For example, there has been stark Khersonska, and Kyivska oblasts have sustained the increase in emergency response and civil protection greatest damage (Table 2). (almost 115 percent) environment, natural resources, and forestry sector (112 percent), irrigation and Figure 10. Total damage (US$ billion): water resource management sector (almost 95 percent), water supply and sanitation sector (82 US$152 billion percent). For example, 207 water treatment facilities and pumping stations, and 234 sewage treatment Commerce and plants and pumping stations have been destroyed or Environment and Foresty $3 Industry $16 damaged as of December 31, 2023. Agriculture $10 Housing $56 The Kakhovka Dam breach contributed to considerable increase in damage across several Municipal Services $5 sectors. For example, in the agriculture sector, the dam break resulted in a threefold increase in damage to the aquaculture and fishery industries. In the Water Supply housing sector, of the 11 percent increase in the cost and Sanitation $4 of damage since RDNA2, approximately a fifth can be attributed to the damage caused by the breakage Education $6 Telecommunications of the Kakhovka Dam and the subsequent flooding and Digital $2 Health $1 (primarily in the Khersonska oblast).42 Increased Culture and Tourism $3 attacks on cultural heritage sites in areas protected Transport $34 Energy and Extractives $11 under the World Heritage Convention such as Lviv and Odesa cities, including, among others, damage to the Transfiguration Cathedral, the first and Source: Assessment team. foremost Orthodox church in Odesa founded in 1794, Note: Values are for the period between February 24, 2022, and December 31, 2023. are reflected in an almost 33 percent increase in the culture sector. In the culture sector, it is estimated that On average, across assessed sectors, the direct in total 4,779 cultural and tourism assets destroyed damage has not escalated substantially due to or damaged as of December 31, 2023. limited shifts in the front line of war since the second assessment (US$135 billion)41 (Figure 8), It is important to note that some changes in damage but the impacts on Ukraine remain immense. For (increase or decrease) is linked to the inclusion example, 10 percent of the total housing stock of of new or improved data, changes in subsector Ukraine has been either damaged or destroyed, classification, or adjustments in methodology and impacting more than 2 million housing units across assumptions. For example, sectors that used new the country. There is US$4.8 billion in damage in the or more precise data include agriculture, culture and municipal sector of which 42 percent is in district tourism, commerce and industry, and emergency heating. In transport, this includes 8,400 km of response and civil protection. In the health sector, baseline and damage data was updated contributing 41 RDNA3 uses the same exchange rate as RDNA2, while RDNA1 used a different exchange rate. Damage reported under RDNA1 and RDNA2 is not double counted under RDNA3. 42 European Union et al., “Analysis of the Impact of the Kakhovka Hydroelectric Power Station Explosion on the Populated Areas of Kherson and Mykolaiv Regions,” 2023, Link. SUMMARY OF IMPACTS AND NEEDS 31 Figure 11. Comparison of damage in RDNA1, RDNA2, RDNA3 (billion US$) 60 50 40 30 20 10 0 Housing Education Health Social Protection Culture and Tourism Energy and Extractives Transport Telecommunications and Digital Water Supply and Sanitation Municipal Services Agriculture Commerce and Industry Irrigation and Water Resource Management Finance and Banking Environment and Forestry Emergency Response and Civil Protection Governance and Public Administration Management of explosive hazards RDNA1 RDNA2 RDNA3 Source: Assessment team. Note: y axis = US$ billion; x axis = = sectors under RDNA1, RDNA2 and RDNA3. RDNA1 damage covers the period between February 24, 202,2 and June 1, 2022. RDNA2 damage covers the period between February 24, 2022, and February 24, 2023, while RDNA3 damage covers the period between February 24, 2022, and December 31, 2023. to a 40 percent decrease in damage. In the transport Figure 12. Total loss (US$ billion): US$499 sector, some cost assumptions were updated, billion contributing to an almost 6 percent decrease in damage, while in the commerce and industry sector, new data allowed the use of new calculation and Housing $17 Education $7 Management of Health $18 adjusted methodology, contributing an almost 43 Explosive Hazards $35 Social Protection percent increase in damage compared to RDNA2. Finance and and Livelihoods $10 Damage in municipal services sector increased over Banking $6 Culture and 103 percent, in large part due to the inclusion of Tourism $20 district heating under which was previously included Energy and under the energy sector in RDNA2 and RDNA1, Extractives $54 and this change also contributes to explaining only a slight increase in damage in the energy sector Transport $41 compared with RDNA2. Telecommunications Summary of Loss and Digital $2 Commerce and Water Supply Industry $173 and Sanitation $12 Aggregate economic, social, and other monetary Municipal Agriculture $70 losses total almost US$499 billion (Table 1, Figure Services $7 12). Loss is dominated by commerce and industry (over US$173 billion, or 35 percent of the total loss), Source: Assessment team. and in a lesser degree by agriculture (almost US$70 Note: Loss includes an additional 18 months beyond the 12 billion, or 14 percent), energy and extractives (US$54 months between February 24, 2022, and December 31, 2023. Loss in social protection does not include loss of household billion, or 11 percent), transport (almost US$41 billion, income to avoid potential double-counting. 8 percent), and explosive hazards management (almost US$35 billion, or 7 percent). Five percent of total loss is attributed to the environment, natural resource management, and forestry sector, in large part linked to the Kakhovka Dam breach and inclusion of new types of losses (such as assessment of ecosystem service losses). In the banking and finance sector, there are US$5.7 billion 32 SUMMARY OF IMPACTS AND NEEDS estimated in credit. It should be noted that losses loss in the case of education (not assessed under in one sector can flow into and intersect with those RDNA1 or RDNA2) and loss of ecosystem services in other sectors, though careful efforts are made in the environment sector (RDNA2 estimated only to avoid double-counting. For example, reduction losses from reduced forest carbon sequestration in agricultural production affects transportation and a limited range of forest ecosystem services) needs, and loss of electricity affects commerce contribute to the steep increase in losses. In the and industry in areas that are otherwise unaffected agriculture sector, which saw increase over 120 by the war. The total loss figures do not include percent of losses, the RDNA3 estimates include household income loss—estimated under the social crop losses for the entire year of 2023 (while the protection and livelihoods sector and valued at over RDNA2 considered only production in 2022 and US$60 billion—to avoid potential double-counting in winter 2023) as well as projected crop production relation to other sectors. losses for all of 2024, with similar principle for livestock production. The commerce and industry On average and across all sectors assessed, sector recorded an increase of 100 percent, based compared with RDNA2 loss results (US$290 on updated methodology which used actual sales billion), RDNA3 loss results show a considerable data for industry and commerce that have become increase (see Figure 13). As was the case for available and updated assumptions. damage, the increased loss in some sectors is linked to specific events such as the Kakhovka Dam As loss comprises several categories including break (which affected the energy, irrigation and disruption of the production of goods/services and water resource management, and environment access to goods/services, disruption to governance, sectors), or to cyberattacks and increased costs of and increased risks/vulnerabilities, loss is not generators (which affected the telecommunications proportionately linked to damage. For example, and digital sector). The most pronounced increase in agriculture, damage in farm equipment can be in losses compared with RDNA2 is in Kyivska, relatively low, while loss to crops can be still high; in Dnipropetrovska, Zaporizka, Khersonska, Kyiv City, commerce, damage to commercial/industry buildings and Odeska oblasts. can be low but sales drop can be still significant. For example, Dnipro was a major industrial center In the case of losses, much of the increase has to do contributing to 14.7 percent of national sales before the with new and improved data and new estimations. war and hence damage disproportionately affected In the education sector and environment sectors, the sales, and losses in turn. In the social protection inclusion of new types of losses, specifically learning sector, while damage is relatively small, losses are Figure 13. Comparison of losses in RDNA1, RDNA2, RDNA3 (billion US$) 200 180 160 140 120 100 80 60 40 20 0 Housing Education Health Social Protection Culture and Tourism Energy and Extractives Transport Telecommunications and Digital Water Supply and Sanitation Municipal Services Agriculture Commerce and Industry Irrigation and Water Resource Management Finance and Banking Environment and Forestry Emergency Response and Civil Protection Governance and Public Administration Management of explosive hazards RDNA1 RDNA2 RDNA3 Source: Assessment team. Note: Loss in RDNA1 considers 21 months in total - 3 months between March and June 2022, and additional 18 months. Loss in RDNA2 considers 30 months in total - 12 months between February 24, 2022, and February 24, 2023, and additional 18 months. Loss in RDNA3 considers 40 months in total - 22 months between February 24, 2022, and December 31, 2023, and additional 18 months. SUMMARY OF IMPACTS AND NEEDS 33 considerable – for example US$3.3 billion in additional and private financing. However, after a significant social protection expenditure for internally displaced Gross Domestic Product (GDP) contraction in 2022, persons as of December 2023. Ukraine’s economy has demonstrated resilience and returned to growth in 2023. More reliable electricity supply, an exceptional wheat harvest, and regular Summary of Macroeconomic and inflows of external assistance have allowed for a Social impacts growth recovery in 2023. Yearly growth for 2023 is estimated at 4.8 percent (compared with a 29.1 Human development impacts of the war continue percent contraction in 2022), though growth in to be deep and wide-ranging. Between February 2024 is expected to be slower than in 2023. As of 2022 and July 2023, almost 10,000 civilian deaths December 31, 2023, Ukraine has yet to secure firm and 18,500 injuries were reported.43 At the start of commitments for sufficient support receipts to the war, 13.5 million people—approximately one-third finance its budget deficit. The 2024 budget plans for of Ukraine’s population—were forcibly displaced. As the receipt of US$37.3 billion in external loan and of December 2023, an estimated 5.9 million people44 grant to meet Ukraine’s fiscal needs. The receipt remain recorded as refugees across Europe and 3.7 of this is, however, highly uncertain, as no firm million as IDPs, as of October 2023.45 The war has commitments of this magnitude have been received brought hardship as livelihoods have been lost and to date. Given the budget financing shortfalls, access to basic services has been severely disrupted Ukraine needs to prioritize any external assistance to and resulted in decrease of living standards. Different meet its budgetary needs, and thus to pay for social societal groups face unique sets of challenges. For assistance, pensions and salaries, among others. example, youth have suffered learning loss and increased mental health issues, additional to those already accumulated during the COVID-19 pandemic. Summary of Needs The elderly have been disproportionally impacted with The total estimated recovery and reconstruction many impoverished and unable to meet basic needs, needs is almost US$486 billion (Table 1, Figure 14). especially if they live close to frontlines, support These costs — estimated within a period of 10 years adults and children who became IDPs and refugees, — consider building back better principles, including lost their social networks or access to coping shift toward lower energy intensity, modern mechanisms such as kitchen gardens to supplement standards including climate resilience and inclusive food supply. The invasion has resulted in increased design, as well as inflation, market conditions, surge cases of trauma and serious injuries, leading to a pricing in construction commonly seen in areas of rapid rise in the number of people with disabilities. major construction, and higher insurance premiums. IDPs and returnees face many challenges linked to The highest estimated needs are in housing (over their socio-economic existence facing employment US$80 billion, or 17 percent of the total), followed challenges, scarcity and geographical mismatches by transport (almost US$74 billion, or 15 percent), of vacancies and reduced wages, and barriers in the commerce and industry (US$67.5 billion, or 14 labor market, particularly for women and vulnerable percent), agriculture (US$56 billion, or 12 percent), subgroups such as, young people and persons with energy (US$47 billion, or 10 percent), social protection disabilities. Demobilization, reintegration, and socio- and livelihoods (US$44.3 billion, or 9 percent), and economic support are needed to address the needs explosive hazard management (almost 35 billion, of veterans and their families. Risks of gender-based or 7 percent). Across all sectors, the cost of debris violence, including war-related sexual violence, human clearance and management (and demolition where trafficking and partner violence, have increased since needed) reaches almost US$11 billion. The health February 2022.46 sector (over US$14 billion) and education sector (almost US$14 billion) each represent 3 percent of The invasion has caused economic disruption, job the total needs. loss, and low investor confidence, affecting public 43 Office of the High Commissioner for Human Rights (OHCHR). Report on the human rights situation in Ukraine, 1 February to 31 July 2023, Link. 44 UNHCR. Ukraine Refugee Situation, website, accessed December 2023. Link. 45 International Organization for Migration (IOM), “Ukraine: Internal Displacement Report—General Population Survey Round 14 (September – October 2023),” Link. This compares to 5.4 million people in the Ukraine RDNA2 report. 46 Regional Gender Task Force, “Making the Invisible Visible: An evidence-based analysis of gender in the regional response to the war in Ukraine”, October 2022, Link. 34 SUMMARY OF IMPACTS AND NEEDS Figure 14. Total recovery and reconstruction to changes for specific sectors between RDNA3 needs (US486 billion) and RDNA2 sector needs. An updated baseline and damage data led to a decrease in needs in the health sector. In the transport sector, adjustment of cost Finance and Banking $2 Management of Explosive Hazards $35 assumptions and a greater focus on recovery and Irrigation and Water Housing $80 reconstruction of core services contributed to a 20 Resource Management Education $14 percent decline compared with RDNA2. This sector $11 has recorded also several needs met. In the finance Health $14 Commerce and and banking sector, decrease in needs reflects Industry $68 results of the 2023 resilience assessment, and decrease of war-related credit losses. A decrease of Social Protection Agriculture and Livelihoods 8 percent for management of explosive hazards is $56 $45 linked to improved accuracy of data due to ongoing Municipal and increased data collection, estimating 174, 000 Culture and Services $11 Tourism $9 km2 of area contaminated with explosive ordnance. Water Supply The regions with the greatest net change in needs and Sanitation $11 include Kyivska, Dnipropetrovska, Donetska, Energy and Telecommunications Extractives $47 Khersonska, Kharkivska, Zaporizka, and Odeska. and Digital $5 Transport $74 Meeting the overall estimated needs will be critical Source: Assessment team. for the long-term recovery from the war, but all Note: Needs relate to total estimated needs covering the needs cannot be met immediately. The timeframe for period 2024–2033. Where data was available, needs met covering these needs will depend on the availability were deducted. of financing, but also on several other factors: the absorptive capacity of the Ukrainian budget; the On average, across assessed sectors, the increase implementation capacity of and coordination among in needs in RDNA3 compared to RDNA2 (US$411 line ministries, subnational authorities, civil society, billion, see Figure 7) is moderate and proportionate community-based organizations, and implementing to the impacts sustained (Figure 4, Figure 15, Figure agencies; the readiness of the private sector to 16). Sectors with the highest increase in needs support capital investments; and the trajectory of the include those that have seen an increase in damage, war. The critical role of private sector investments in specifically commerce and industry, agriculture, meeting needs should be noted; further information and water supply and sanitation. However, new or is provided in the final chapter. An estimation of improved data, changes in subsector classification, recovery and reconstruction priorities for 2024 is adjustments in methodology and assumptions, as discussed in the next section. well as and deduction of needs met, contributed Figure 15. Comparison of needs in RDNA1, RDNA2, and RDNA3 (in billion US$) 100 90 80 70 60 50 40 30 20 10 0 Housing Education Health Social Protection Culture and Tourism Energy and Extractives Transport Telecommunications and Digital Water Supply and Sanitation Municipal Services Agriculture Commerce and Industry Irrigation and Water Resource Management Finance and Banking Environment and Forestry Emergency Response and Civil Protection Governance and Public Administration Management of explosive hazards RDNA1 RDNA2 RDNA3 Source: Assessment team. Note: y axis = US$ billion; x axis = sectors under RDNA1, RDNA2 and RDNA3. Needs are counted within a period of 10 years. SUMMARY OF IMPACTS AND NEEDS 35 Table 1. Total damage, loss, and needs by sector (US$ billion) Sector Damage Loss Needs Social sectors Housing 55.9 17.4 80.3 Education and science 5.6 6.9 13.9 Health 1.4 17.8 14.2 Social protection and livelihoods a 0.2 9.5 a 44.5 Culture and tourism 3.5 19.6 8.9 Infrastructure sectors Energy and extractives 10.6 54.0 47.1 Transport 33.6 40.7 73.7 Telecommunications and digital 2.1 2.3 4.7 Water supply and sanitation 4.0 11.6 11.1 Municipal services 4.9 6.8 11.4 Productive sectors Agriculture 10.3 69.8 56.1 Commerce and industry 15.6 173.2 67.5 Irrigation and water resource management 0.7 0.7 10.7 Finance and banking 0.0 5.7 2.3 Cross-cutting sectors Environment, natural resource management, and forestry 3.3 26.5 2.3 Emergency response and civil protection 0.4 0.5 2.3 Justice and public administration 0.3 1.7 0.7 Explosive hazard management - 34.6 34.6 Total 152.5 499.3 486.2 Source: Assessment team. Note: - = not relevant. Damage covers 22 months of war between February 24, 2022, and December 31, 2023; loss covers a total of 40 months, which includes 22 months between February 24, 2022, and December 31, 2023, and an additional 18 months through June 30, 2025; needs cover the period 2024–2033. a. Under social protection, household income loss valued at US$60 billion is not included to avoid potential double-counting in relation to other sectors. 36 SUMMARY OF IMPACTS AND NEEDS Table 2. RDNA3 Damage, loss, and needs by oblast (US$ billion) Oblast Damage Loss Needs Frontline regions, subtotal 116.0 157.6 250.5 Donetska 38.7 39.0 73.9 Zaporizka 13.5 30.4 33.6 Luhanska 17.8 19.1 39.0 Mykolaivska 5.6 11.1 14.2 Kharkivska 27.8 32.3 54.9 Khersonska 12.6 25.7 35.0 Support regions, subtotal 5.3 81.3 36.3 Vinnytska 0.2 9.3 4.7 Dnipropetrovska 2.9 39.3 16.4 Kirovohradska 0.2 5.7 2.7 Odeska 1.3 15.2 7.2 Poltavska 0.8 12.0 5.3 Backline regions, subtotal 1.2 47.5 19.1 Volynska 0.1 4.6 1.7 Zakarpatska 0.3 2.9 1.4 Ivano-Frankivska 0.1 5.6 1.9 Lvivska 0.3 11.3 3.3 Rivnenska 0.1 3.5 1.6 Ternopilska 0.0 3.9 1.7 Khmelnytska 0.2 6.9 3.6 Chernivetska 0.0 1.6 0.7 Cherkaska 0.2 7.2 3.2 Regions where government has regained control, subtotal 22.9 135.7 80.8 Kyiv City 2.2 27.4 8.2 Zhytomyrska 1.1 6.2 4.7 Kyivska 11.2 82.7 42.5 Sumska 3.0 8.8 10.4 Chernihivska 5.5 10.6 15.0 Not specified—nationwide, subtotal 7.1 77.2 99.5 Source: Assessment team. Note: Damage covers 22 months of war between February 24, 2022, and December 31, 2023; loss covers a total of 40 months, which includes 22 months between February 24, 2022, and December 31, 2023, and an additional 18 months through June 30, 2025; needs cover the period 2024–2033. The regions follow categorization as presented by the GoU at the July 2022 Lugano conference, with some updates. As of December 2023, there were hostilities in Mykolaivska, even though most clashes had moved to the Khersonska region. SUMMARY OF IMPACTS AND NEEDS 37 Table 3. RDNA1, RDNA2, and RDNA3 damage, loss, needs by sector (US$ billion) Damage Loss Needs Sector RDNA3 RDNA2 RDNA1 RDNA3 RDNA2 RDNA1 RDNA3 RDNA2 RDNA1 Social sectors Housing 55.9 50.4 39.2 17.4 17.2 13.3 80.3 68.6 69.0 Education 5.6 4.4 3.4 6.9 0.8 0.5 13.9 10.7 9.2 Health 1.4 2.5 1.4 17.8 16.5 6.4 14.2 16.4 15.1 Social protection 0.2 0.2 0.2 9.4 4.2 4.5 44.5 41.8 20.6 Culture and tourism 3.5 2.6 1.1 19.6 15.2 19.3 8.9 6.9 5.2 Infrastructure sectors Energy and 10.6 10.6 3.1 54.0 27.2 12.0 47.1 47.0 10.7 extractives Transport 33.6 35.7 29.9 40.7 31.6 26.1 73.7 92.1 73.8 Telecommunications 2.1 1.6 0.7 2.3 1.6 0.6 4.7 4.5 3.3 and digital Water supply and 4.0 2.2 1.3 11.6 7.5 6.8 11.1 7.1 5.4 sanitation Municipal services 4.9 2.4 2.3 6.8 3.0 4.3 11.4 5.7 5.7 Productive sectors Agriculture 10.3 8.7 2.2 69.8 31.5 28.3 56.1 29.7 18.7 Commerce and 15.6 10.9 9.7 173.2 85.8 47.5 67.5 23.2 20.8 industry Irrigation and water resource 0.7 0.4 0.2 0.7 0.3 0.1 10.7 8.9 7.5 management Finance and banking 0.0 0.0 0.0 5.7 6.8 8.1 2.3 6.8 8.0 Cross cutting sectors Environment, natural 3.3 1.5 2.5 6.5 0.5 0.7 2.3 1.5 1.2 resources, forestry Emergency response 0.4 0.2 0.1 0.5 0.5 0.2 2.3 1.5 0.7 and civil protection Justice and public 0.3 0.3 0.1 1.7 1.4 0.0 0.7 0.6 0.2 administration Management of - - - 34.6 37.6 73.2 34.6 37.6 73.2 explosive hazards Total 152.5 134.7 97.4 499.3 289.1 252.0 486.2 410.6 348.5 Source: Assessment team. Data per RDNA1, RDNA2 and RDNA3. 38 SUMMARY OF IMPACTS AND NEEDS Figure 16. Comparison of damage, loss, and needs for sector clusters in RDNA2 and RDNA3 (billion US$) $280 B $260 B $240 B $220 B $200 B $180 B $160 B $140 B $120 B $100 B $80 B $60 B $40 B $20 B $0 B Social Sectors Infrastructure Sectors Productive Sectors Cross Cutting Sectors RDNA 2 Damage RDNA 3 Damage RDNA 2 Loss RDNA 3 Loss RDNA 2 Needs RDNA 3 Needs Source: Assessment team. Note: y axis = US$ billion; x axis = sectors under RDNA2 and RDNA3. 39 RECOVERY AND RECONSTRUCTION PRIORITIES AND PRINCIPLES Photo by UNICEF/Katya Klochko. A school in the village of Lezhyno, Zaporizhzhia oblast. 27 October 2023 40 RECOVERY and RECONSTRUCTION PRIORITIES and PRINCIPLES Recovery and Reconstruction Priorities As needs continue to grow, it will be increasingly priorities have been defined, in line with RDNA2. As important to establish clear priorities for recovery described above, determination of 2024 recovery and and reconstruction, to mobilize and leverage reconstruction priorities has been made bottom-up financing effectively, and to ensure organized and by line ministries and has not been prioritized across efficient implementation. This chapter summarizes sectors in line with an overall resource envelope. the implementation priorities identified by the GoU However, the GoU has organized discussions of line ministries, assesses the implications of these needs around six broad priorities, as listed below.48 priorities from a financing and implementation These are mainly in line with RDNA2, with some perspective, and sets out some recommendations small additions and reorganization. for ensuring effective and efficient recovery and reconstruction efforts over the medium term.47 1. Energy, including restoration and repair of transmission and distribution lines and Given the magnitude and complexity of the needs, restoration and decentralization of generation the GoU has taken an organized, sector-level capacity, such as through the development of approach to recovery and reconstruction planning. renewables and protection of the power grid Coordinated through the MCTID, the MOE, and the RDO, line ministries worked across 20 sectors to 2. Transport, with a strong focus on internal and identify project-level priorities, determine financing cross-border connectivity, including repair and needs, and monitor funding, implementation, and reconstruction of road, rail, bridges, ports, border disbursement. Along with a detailed data collection crossings, and postal services49 and monitoring effort, a series of workshops and consultations was organized in June and November 3. Housing and utilities, including routine repair 2023 with line ministries and development and capital reconstruction of housing; as well as partners to review progress on implementation, reconstruction and service restoration of central outline priorities and expected impacts, discuss heating,50 energy efficiency,51 water supply and implementation feasibility and timelines, and assess sanitation services, and waste management funding needs. This process has enabled individual services52 ministries to determine existing 2023 priorities that will require continued implementation in 2024, 4. Social infrastructure and services, including confirm new priorities to be mobilized in 2024, and, repair, reconstruction, and service restoration of in coordination with the established state budgeting schools and health facilities, as well as social and and donor coordination processes, identify funding cultural infrastructure and services53 sources. 5. Industry and services, encompassing the main While the GoU has not established an overall support to the private sector, including industry financial envelope under which to prioritize and commerce, agribusiness, and irrigation,54 recovery and reconstruction needs, some broad with a focus on de-risking investment and trade 47 Figures presented in this chapter are based on priorities as defined by line ministries through a process coordinated by the Ministry for Restoration. They reflect line ministry priorities. 48 It should be noted that the GoU’s first and foremost priority is to ensure its ability under the state budget to finance its core functions and deliver services to its citizens. Reconstruction and recovery needs come as the next priority. 49 Postal services are included under telecommunications and digital in the RDNA nomenclature. 50 Central heating is covered under energy in the RDNA nomenclature, while district heating is covered under municipal services. 51 Energy efficiency is not covered in the RDNA nomenclature as a separate sector but considered in a cross-cutting manner. 52 Waste management is covered under municipal services in the RDNA3 nomenclature. 53 These are municipal services, social protection, and culture and tourism, respectively, in the RDNA3 nomenclature. 54 These are commerce and industry, agriculture, and irrigation and water resource management, respectively, in the RDNA3 nomenclature. RECOVERY and RECONSTRUCTION PRIORITIES and PRINCIPLES 41 Figure 17. Estimated distribution of Figure 18. Distribution of RDNA3 priority RDNA3 priorities by expenditure type public expenditures by broad sector (US$ million) (US$ million) 1,186 5,884 2,656 (estimated) 8% 17% 8,221 3,593 24% 2,334 15% 5,201 (estimated) 2,440 4,733 3,078 16% 2,332 20% Energy Public and SOE investment Transport Grants, subsidies, and other financial support Housing and utilities Other public expenditure Social infrastructure and services Private investments Industry and services Private working capital/financing Cross-sectoral Source: Assessment team, based on data in sector templates prepared by GoU line ministries and coordinated by the MCTID. Note: SOE = state-owned enterprise. 6. Cross-sectoral priorities, including demining,55 guarantees to de-risk financing and overcome telecommunications, digital and cybersecurity,56 constraints to private investment (Figure 17). This emergency response and civil protection, and would be complemented by US$2.3 billion in other democracy, justice, and human rights.57 government current expenditures.59 Public support to de-risk and facilitate financing has the potential to Recovery and reconstruction priorities in 2024 catalyze up to US$5.5 billion in private investment, identified by line ministries total US$15.3 billion in while also facilitating a similar volume in working public funding58, while the private sector (including capital (through programs such as 5-7-9 for firms firms and households) could contribute up to and preferential mortgages for consumers) to another US$11 billion to meeting the most urgent maintain the functioning of firms and supply chains needs. Total public and private spending accounts and stimulate consumer investment in the housing for around 6 percent of overall RDNA needs over the market.60 span of 10 years. Meeting the priorities identified by line ministries for 2024 across sectors would Support for the private sector accounts for the require US$8.2 billion in public and SOE investments, largest share of 2024 priorities. Based on priorities along with US$4.7 billion in grants, subsidies, and defined by line ministries, the largest share of 55 This is explosive hazards management in the RDNA nomenclature. 56 This is telecommunications and digital in the RDNA nomenclature; cybersecurity is not covered in the RDNA nomenclature. 57 This is justice and public administration in the RDNA nomenclature. 58 Note that public funding is based on priority sectors/programs as identified by the GoU and does not include an additional US$3.6 billion in RDNA-related social transfers that are an established part of the state budget, or possible transfers to support liquidity needs of the district heating sector. 59 A significant share of this expenditure is accounted for by a provision of US$740 million in gas and electricity purchases. 60 Private sector contributions are estimated using assumptions on investment multipliers for the proposed programs identified by line ministries. In the case of the industry and services sector this includes programs like 5-7-9 that primarily facilitate working capital loans and grants, credit facilities, risk mitigation facilities, and direct investments. In the housing sector this includes various mortgage assistance programs as well as direct transfers (compensation) that stimulate investments in the housing market; for purposes of assessing investment impacts, the analysis uses the pre-war market dynamics whereby 10 percent of housing lending supports purchases of new facilities in the primary market while 90 percent supports purchases of existing units in the secondary market (as per IFC, 2023) 42 RECOVERY and RECONSTRUCTION PRIORITIES and PRINCIPLES recovery and reconstruction expenditures are in the expenditures required to address RDNA3 priorities industry and services sector (nearly US$3.6 billion, are 8.5 percent higher than in RDNA2 (US$14.1 billion). or 23.5 percent of total public expenditures) followed This increase in urgent priorities is less than half the by housing and utilities (US$3.1 billion). Energy, overall increase in needs in RDNA3. As shown in social infrastructure and services (mainly education Figure 19, the increase is explained by sharply rising and health)61 and transport account for US$2.7 priorities in the social infrastructure and services billion, US$2.4 billion and US$2.3 billion of priorities, sector (increased more than 50 percent compared to respectively), with another US$1.2 billion needed RDNA2) as well as the industry and services and the to address cross-sectoral priorities, including housing and utilities sectors (increases of around demining, emergency response, telecommunications 30 percent each), though these are partly offset by and digital, and the justice sector (Figure 18). Private a decline of estimated urgent priorities in transport expenditures and investments are expected to (one-third lower than RDNA2) and energy (20 percent be concentrated in the industry and commerce, lower). This relative shift in concentration of urgent agribusiness, and housing sectors in 2024 (Table priorities reflects in part an increased strategic focus 4), although there are opportunities for private on the private and social sectors of the economy, investment in other sectors, including energy and and also reflects successful planning, prioritization, transport. and execution in key infrastructure sectors. On the other hand, it is important to recognize that needs in Priorities identified by line ministries for RDNA3 sectors like transport and energy remain huge and have increased modestly over those in RDNA2 these sectors remain exposed to significant risks (for 2023). Estimated at US$15.3 billion, public that could require urgent investments. Figure 19. RDNA3 priority public expenditures by broad sector (US$ million) compared with RDNA2 1,000 851 824 755 500 0 -30 -500 -644 -1,000 -1,141 -1,500 Energy Transport Housing and Social Industry and Cross-sectoral utilities infrastructure and services services Source: Assessment team, based on data in sector templates prepared by GoU line ministries and coordinated by the MCTID. 61 Note that while (nonpension) social transfers—around US$3.6 billion in 2024—are considered part of RDNA3 needs, they are fully covered in the state budget and not considered part of the RDNA3 priorities defined by GoU line ministries. This is in line with the approach taken in RDNA2. RECOVERY and RECONSTRUCTION PRIORITIES and PRINCIPLES 43 Figure 20. Execution on RDNA2 priorities by sector and funding during 2023 (US$ million) Public funds Loans Grants Cross-cutting Industry and services Social infrastructure and services Housing and utilities Transport Energy - 1,000 2,000 3,000 4,000 5,000 Funds disbursed Funds available but undisbursed Funds committed but not available No commitments Source: Assessment team, based on ‘2023 Monitoring report’ (dated February 1, 2024) provided by GoU; report is based on a combination of actual data verified by Ministry of Finance and self-reported data from line ministries. Note: Figure above presents results using RDNA3 sector definitions; Cross-cutting sector here includes only demining and telecommunications and digital; Disbursement ratio equals funds disbursed as a share of funds available. While all the funding identified as priorities by line highly unlikely. At the same time, one of the main ministries is unlikely to be fully disbursed in 2024, barriers to disbursement is lack of timely availability mobilizing funding commitments will be important of funds that enable development of multi-year to facilitate implementation. Monitoring of execution investment programs. Moreover, for infrastructure on RDNA2 priorities shows that more than US$7.2 projects, long lead times mean that delays of a billion was disbursed in 2023, which was around 61 year or more can occur between procurement and percent of available funding mobilized through the disbursement, and funding is typically required in state budget and donors.62 The disbursement ratio63 advance of procurement. Thus, while the priorities was highest in the Housing and utilities sector (70 identified by line ministries may not all require full percent)64, and was above 60 percent in all sectors funding on the ground in 2024, implementation will (Figure 20); committed funding was highest in the depend crucially on securing funding commitments. infrastructure sectors and lagged in the private and social sectors. While 84 percent of public funds Significant funding has already been secured to meet (mainly from the state budget) were disbursed recovery and reconstruction priorities in 2024, but during the year, indicating relatively strong execution around US$9.5 billion in additional funding would of budget funds, execution was much lower for be needed in 2024 to support all priorities identified loans and grants, which may be a function of more by the line ministries. As of January 2024, around complex disbursement procedures but may also be US$5.5 billion in funding had already been secured explained by funding from donors coming available, to meet the public expenditure priorities for recovery on average, later in the year. Looking ahead to and reconstruction, in addition to the US$3.6 billion 2024, absolute levels of disbursement would need budgeted to support war-related social protection. to more than double to fully execute the RDNA3 Secured funding includes expenditure allocation priorities within a year. Despite relatively positive from the state budget and complementary spending performance in 2023, such an increase in 2024 is through local budgets, which are underpinned by 62 Commitments were achieved on around 84 percent of identified RDNA2 priorities. 63 Disbursement as a share of available funds 64 The disbursement ratio was 100 percent in the Cross-cutting sector, but that accounted only for small funding in demining and telecommunications. 44 RECOVERY and RECONSTRUCTION PRIORITIES and PRINCIPLES Figure 21. Summary of RDNA3 recovery and reconstruction priorities and funding needs for 2024 as identified by Ukrainian authorities RDNA3 RECONSTRUCTION AND RECOVERY PRIORITIES Recovery and reconstruction public Private sector (estimated)a Social protectionc expendituresb ~US$11 BILLION ~US$15 BILLION ~US$3.5 BILLION Working capital + Investments housing financing ~US$5.5 BILLION ~US$5.5 BILLION Unmet funding needs Already fundedd ~US$9.5 BILLION ~US$5.5 BILLION Subsidies, guarantees and Public investment Other public non-capital expenditures other financial support ~US$3.5 BILLION ~US$4.5 BILLION ~US$1.5 BILLION Source: Assessment team, based on data in sector templates prepared by GoU line ministries and coordinated by the MCTID. a. Private sector includes firms and households; figures estimated based on assumptions of investment and lending multipliers of various public support instruments; note private sector investments not assessed in RDNA2. b. Includes expenditures and investments from Government and SOEs as well from donors and international financial institutions. c. Social transfers are part of RDNA-defined needs but are not included in GoU RDNA priorities, as they are considered an ongoing core responsibility covered by the state budget. Figure excludes non-RDNA-related pensions. d. Including through state and local budgets; loans and grants from international financial institutions and donors; and SOE own funds; includes funding under negotiation but not finalized. support through loans and grants from international 2024, it will be important for the government to carry financial institutions (IFIs) and other donor (these out strategic prioritization across sectors to ensure account for around two-thirds of existing funding). that the most critical needs are met. At the same Yet more than 60 percent (around US$9.5 billion) time, securing medium-term, predictable funding in funding needs are still unmet (Figure 21). Unmet commitments from donors is critical for enabling funding needs are particularly high, in both nominal implementing agencies to plan and manage long and percentage terms, in the energy and industry and complex procurement. Meeting this requirement and services sector. An estimated US$3.5 billion can be facilitated by better integrating priority of unmet funding needs relates to programs and setting and project planning into the medium-term instruments designed to catalyze private investment budget planning process as well as by implementing (in industry and services and in housing); failure to other steps envisaged by the adopted PIM Reform secure this would have negative spillovers on the Roadmap. private sector’s contribution to meeting recovery and reconstruction priorities. Beyond this, several key actions will accelerate disbursement against priorities and maximize Moving forward on recovery and reconstruction the effectiveness and efficiency of recovery and in the context of resource and implementation reconstruction investments: constraints will require further strategic prioritization, supported by timely and predictable • Accelerating the reform agenda, including funding. Given the likely challenges in mobilizing the framework of the Government’s Ukraine an additional US$9.5 billion beyond existing budget Plan under preparation. This action will help financing (and additional funding already secured) in foster economic growth and modernization RECOVERY and RECONSTRUCTION PRIORITIES and PRINCIPLES 45 of the economy and institutions and promote including through establishment of the Strategic strengthening of public sector capacity at the Investment Council. local level, in alignment with the standards and policies of the EU. • Leveraging opportunities for private investment. As the figures presented in this report show, the • Strengthening public sector capacity. Alongside private sector will play a critical role in meeting increasing the role of the private sector, recovery and reconstruction needs. As market continued strengthening of public sector capacity conditions evolve, and with commitment to to plan and deliver recovery and reconstruction reforms, the sectoral scope and depth of private projects will be critical to ensure effective and investment can increase substantially. This efficient implementation. The Government’s growth will help accelerate implementation while adoption and implementation of the PIM reform reducing fiscal burdens. roadmap will play a key role in this respect, in part by bringing public investments within the • Strengthening the competencies of local framework of strategic and medium-term budget authorities and community representatives. planning, and by developing a single project Stronger strategic planning, project management, pipeline, by strengthening institutional and investment activities, coordination with different technical capacities of authorities and relevant stakeholders, and relevant technical capacities stakeholders, and by fostering cross-institutional will promote modern, inclusive, resilient, and coordination and cross-sectoral prioritization, thriving communities. Table 4. Summary of assessed recovery and reconstruction priorities for 2024 financing - estimated contribution by sector and type of expenditure (US$ million) Public funds – estimated distribution across types of Private funds – estimated additional expenditure contribution to meeting priorities Public Subsidies, Total Estimated Estimated private Other public Total and SOE guarantees, and other private private working capital / b expenditure c investmenta financial support sector investmentd financinge Energy 2,656 1,874 - 782 - -g - Transport 2,334 2,334 - - - - - Housing and 3,078 1,494 1,214 370 2,500 500 2,000 utilities Housing 2,116 533 1,214 370 2,500 500 2,000 Central heating 159 159 - - - - - Municipal 247 247 - - - - - services Energy efficiency 258 258 - - - - - Waste 56 56 - - - - - management Water supply and 242 242 - - - - - sanitation Social infrastructure 2,440 1,869 - 571 - - - and services Education 1,193 743 - 450 - - - Healthcare 873 816 - 57 - - - Culture 6 6 - - - - - Social protection f 369 305 - 64 - - - 46 RECOVERY and RECONSTRUCTION PRIORITIES and PRINCIPLES Public funds – estimated distribution across types of Private funds – estimated additional expenditure contribution to meeting priorities Public Subsidies, Total Estimated Estimated private Other public Total and SOE guarantees, and other private private working capital / b expenditure c investmenta financial support sector investmentd financinge Industry and 3,593 44 3,519 30 8,000 4,500 3,500 services Industry and 3,114 - 3,104 10 6,000 4,000h 2,000h commerce Agribusiness 435 - 415 20 2,000 500 1,500 Irrigation 44 44 - - - - - Cross-sectoral 1,186 606 - 580 300 300 i - Demining 492 - - 492 - - - Emergency response and 272 272 - - - - - civil protection Democracy, justice, and 22 22 - - - - - human rights Telecom and 400 312 - 87 300 300 - digital up to Total 15,287 8,241 5,014 2,031 ~5,300 ~ 5,500 11,000 Source: Assessment team, based on data in sector templates prepared by GoU line ministries and coordinated by the Ministry for Restoration. Note that the analysis of distribution across expenditure types and private sector potential contribution is made by the World Bank team based on analysis of GoU monitoring data and other sources and is intended as an estimate to provide perspective on the nature of expenditure needs and contributions. Figures shown here are assessed priorities for 2024 and do not indicate the funding commitments mobilized to meet these priorities. Sectoral definitions used in this table are aligned with priority sectors as defined by GoU and do not match exactly with the structure and nomenclature of the RDNA3. a. Public investment includes investment from central and local governments and SOEs as well as from international financial institutions and other donors and development partners. b. Instruments include subsidies, grants, and other transfers to firms and households that are intended to enable private investment, including by reducing risks to credit provision and risks and costs of investment. This includes in agriculture: all projects other than technical assistance support (US$20 million); in housing: e-recovery, voucher compensation, preferential loans to rural developers, and various preferential mortgage programs; in industry and services: all projects other than technical assistance (US$10 million). c. Other public expenditure includes non-capital expenditures by the state, excluding grants, subsidies, and other expenditures covered in the previous column. d. Private investment includes investments by private firms and households, which are facilitated by the public financial support instruments (grants, loans, guarantees, etc.). Figures are estimates from the World Bank assessment team and calculated based on assumed multipliers on private capital mobilization from different support instruments. e. Private working capital/financing includes expenditures made by firms for reconstruction and recovery needs as well as expenditures made by private households in the housing market. which are financed by private capital mobilized through instruments of public financial support (e.g., subsidized or guaranteed lending). Figures are estimates from the World Bank assessment team and calculated based on assumed multipliers on private capital mobilization from different support instruments. f. Excludes US$3.56 billion in RDNA-related social transfers not included in GoU-identified sectoral priorities because they are established as an ongoing commitment in the state budget. g. There are expected to be opportunities for private investment in the energy sector as part of recovery and reconstruction, although these are not captured in the analysis presented here as it is linked to sector-specific instruments (note: some programs under Industry and services sector could facilitate private investment in energy. h. Investments and working capital facilitated through programs from the Ministry of Economy will not be restricted to the industry and services sector and the agribusiness sector and may also support infrastructure sectors like energy, transport, and construction. i. Reflects expected investments by private telecommunications operators. RECOVERY and RECONSTRUCTION PRIORITIES and PRINCIPLES 47 Principles and Opportunities for Recovery and Reconstruction Guiding Principles • Engagement and building capacity • Inclusivity and equity • Continuous data collection as well as monitoring Guiding principles have already been adopted by and evaluation processes the GoU and the international community.65 These include partnership, reform focus, transparency, The remainder of this chapter highlights areas of accountability, and rule of law; democratic particular focus in the short-term. They include participation; multi-stakeholder engagement; accelerating broad reforms; maximizing private gender equality and inclusion; and sustainability. The financing for reconstruction; and building back key guiding principles of the government’s recovery inclusively. efforts so far have been to start immediately and ramp up gradually; grow prosperity in an equitable way; integrate into the EU and be consistent with and Accelerating Broad Reforms supportive of the accession path; build back better (for the future); and enable private investment and Ukraine’s ambitious reform and EU integration entrepreneurship.66 agenda, coupled with financial and technical assistance from partners, requires a strong Challenges in post-war settings include government-led coordination architecture at limited resources, security concerns, political political, strategic, and technical levels. This complexities, and social divisions and trauma. coordination architecture would facilitate dialogue Securing adequate funding and resources is crucial between the GoU, partners, local authorities, for effective reconstruction, as is ensuring a safe private sector, and civil society on lessons learned, and secure environment. Overcoming political successes, challenges and solutions. It would also challenges and ensuring inclusive decision-making promote transparency and mutual accountability processes are crucial as well. A successful recovery for measuring results by ensuring the efficient will require rebuilding trust, promoting social collection of data for monitoring and reporting and cohesion, and addressing the psychological needs of by creating an evidence base for prioritization and the affected population. investments. The previous assessments proposed a set of Successful recovery and reconstruction, and complementary recommendations based on progress toward EU standards, will require international experience with post-war and post- significant institutional reforms that both strengthen disaster recovery and reconstruction efforts. The public sector capacity and facilitate a competitive following points remain relevant for the RDNA3 (with private sector. Implementation of extensive more details available in RDNA2): reforms—both prior to the invasion and during the past two years—has played a major role in enabling • Leadership and coordination by the government the government to deliver on its core functions and and partners initiate recovery. But further changes are needed. • Balancing of urgent needs and medium- to long- Experience from other post-war situations highlights term goals the central role of government in managing resource • Differentiated approaches that prioritize impact and allocation and ensuring coordination during the needs and advance decentralization reconstruction process. Moreover, given the scale • Building back better for a more sustainable future of financing needs and the capacity of the Ukrainian and strengthening disaster and climate resilience, private sector, there is a significant opportunity including through mitigation and adaptation efforts67 and need to take full advantage of the potential for 65 URC2022, “Lugano Declaration,” 2022, Link. The 2022 Lugano Declaration for the Reconstruction of Ukraine outlines several guiding principles for recovery and reconstruction. 66 See Government of Ukraine, “Plan for the Recovery of Ukraine (ПЛАН ВІДНОВЛЕННЯ УКРАЇНИ),” 2022, Link. 67 Please refer to sectoral chapters for specific principles highlighted, such as greening and decarbonization, and alignment with the EU laow, standards and acquis communautaire. 48 RECOVERY and RECONSTRUCTION PRIORITIES and PRINCIPLES the private sector to finance and execute recovery grant registration procedure, and (iii) implementation and reconstruction investments. In this context, the of electronic tools to track approvals and signatures, Ukraine Plan —which will include economy-wide as well as introduction of signature delegation to and sectoral reforms, increasing the capacity to avoid delays caused by business travel. absorb investment, and cross-cutting issues such as European integration, digital transformation, Private sector and growth-oriented reforms are green transition, environmental protection, as well at the heart of recovery and reconstruction. As as human capital68— will play a critical role over the discussed in the previous subsection, the private coming years. Programs under the Ukraine Plan sector will be an essential component in financing include actions and reforms for the period 2024– and executing Ukraine’s recovery. Beyond that, 2027, among them macro-financial scenarios for however, recovery is dependent on accelerated and recovery and major sectoral reforms, with the view sustained private sector growth. Again, catalyzing of priority sectors for development. the private sector is central to the Ukraine Plan and the associated Ukraine Facility, and will require Reconstruction is an opportunity for, but also implementation of a wide range of economywide, dependent on, strengthening of public sector sectoral, and financial reforms. capacity. In particular, reforms to strengthen the efficiency of public investment management, project implementation, and financial management will Maximizing Private Financing for be critical to ensure effective implementation and Reconstruction69 make efficient use of budget and donor resources. To this end, the government’s adoption of the Draft Recent analysis by IFC highlights the potential Roadmap for Reforming the PIM System as a crucial of the private sector to finance recovery and component of a sustainable and efficient public reconstruction investments, particularly if finance management system. Building effective sufficient reforms and public measures are put in investments is an important step in setting out both place to provide a supportive policy environment. the framework for a public investment management IFC estimates that the private sector could finance system in which investment projects are planned between one-sixth and one-third of the needs based on strategic priorities (single, prioritized identified in the RDNA2, depending on reforms and pipeline of projects), and a medium-term budgetary public interventions. The IFC assessment concludes framework, in which projects are selected following that private investment will be more easily attracted with unified and transparent procedures and to commercial sectors (agriculture, commerce and clear criteria and implemented within the planned industry, banking) and housing in the current policy timeframe and funding. Complementary reforms will environment. However, an accelerated agenda of also be needed to strengthen public procurement and pro-competition reforms and deeper integration with public financial management. Moreover, institutional the EU and international markets could significantly strengthening will need to cascade across both increase the private sector’s role in reconstruction, central and local governments. especially in infrastructure sectors, while also creating additional investment opportunities beyond Reforms to increase absorption capacity and speed the needs outlined in the RDNA2. Reforms and up procurement processes are needed. There are public interventions that can boost private sector bottlenecks that slow down receipt of necessary investment include the liberalization of energy financing from IFIs and other financial parties, which prices; privatization or private participation in the have slowed down procurement even for urgent ownership and/or management of state-owned needs. In general, the following improvements could assets in the transport and banking sectors; be considered, including (i) removing barriers to public investment in irrigation, and public-private advanced procurement and simplify the procurement partnerships (PPPs) in a variety of sectors, including process to ensure procurement before loans are traditionally state-dominated social sectors (water signed, to speed up implementation, (ii) simplifying and sanitation, health, education). Beyond the needs further the authorization process and ensure clear identified in the RDNA2, and depending on which procedures for grants, as currently there is no clear reforms and interventions are implemented, IFC 68 Government Portal, “European Parliament Approves the Launch of the Ukraine Facility Program Worth EUR 50 Billion over 2024–2027,” October 17, 2023, Link. Decentralization and regional policy are considered part of sectoral reforms. 69 This section draws on the IFC. “Private Sector Opportunities for a Green and Resilient Reconstruction in Ukraine,” 2023, Link. RECOVERY and RECONSTRUCTION PRIORITIES and PRINCIPLES 49 identifies private investment opportunities between to be combined with risk mitigation instruments. 2023 and 2033— supporting Ukraine’s economic Government-backed incentives, subsidies, and/ growth but not directly related to reconstruction—in or infrastructure development can lower barriers the range of US$99 and US$282 billion (in constant to entry and reduce otherwise risk for businesses, 2023 prices). while accelerating the adoption of climate-smart technologies. Public support is required to de-risk The GoU has continued introducing financial private investment in selected sectors. For example, incentives, structural reforms, and policies to infrastructure projects typically face uncertainty maintain financial stability and strengthen the that extends over a long payback period, making private sector during the war. For example, in the them less attractive to private investors without last two years, the GoU accelerated energy sector publicly financed risk mitigation. Such interventions reforms by (i) approving its Energy Strategy 2050, must be judiciously designed to avoid crowding out which sets clear decarbonization targets and aligns private finance but rather to mitigate enough of the with the EU Clean Energy Package; (ii) increasing risk to maximize private sector financing. maximum price caps in the wholesale electricity market; (iii) improving market liquidity and supporting investments in renewable energy (notably wind); and Building Back Inclusively (iv) implementation by Ukrenergo of the key technical While large capital investments in infrastructure requirements to enable permanent interconnection at national level are critical for Ukraine’s overall with the European Network of Transmission System recovery and economic growth, it will be small- Operators for Electricity (ENTSO-E), which is an scale recovery and reconstruction of infrastructure important step in integrating Ukraine’s united energy and housing in communities around the country system into both the regional electricity market and that allows people to rebuild their lives and return the EU internal market. Beyond the energy sector, an to their homes. The RDNA3 investment priorities in important reform supporting delivery of PPPs was housing reconstruction, energy, social infrastructure, enacted. The Law on Amendments to the Budget humanitarian demining, and support to livelihoods Code of Ukraine on the Regulation of Budgetary and local economic development reflect this Relations in the Implementation of Contracts community approach. These interventions have to Concluded within the Framework of Public Private be combined with targeted capacity strengthening Partnerships specifies the conditions for increasing of local authorities for essential service provision, investment in infrastructure and facilitates provision and with community mobilization to create the of high-quality public services. In July 2021, the GoU conditions that allow people to recover from removed its moratorium on domestic transactions the impacts of the war. Strengthening of local involving small land plots by individuals, the first systems for managing and coordinating data and stage of land reform. Since January 1, 2024, the projects, along with efforts to promote community second phase of land reform has been underway; engagement and participation, is critically important it will eventually allow Ukrainian businesses to buy to the recovery. Numerous partners support the GoU land, thus expanding opportunities for investment in with community-level investments, and community- agriculture. Interventions supporting private sector level recovery initiatives in 2023 have offered resilience include risk mitigation programs such as tangible improvements for Ukrainians in affected the government’s “Affordable Loans 5-7-9” program, communities. The GoU has worked with partners to through which the GoU partially compensates the map the needs and resources of affected hromadas, interest on loans to Ukrainian SMEs. Through this launch local recovery planning, and develop local program, businesses received 78,303 loans from recovery coordination mechanisms. These efforts both private and state-owned banks for a total of must be expanded in 2024 with rapid, focused, and UAH 263.1 billion as of December 25, 2023.70 These efficient area-based early recovery support for are just a few examples of recent GoU policy changes people in communities affected by the war. Similarly, that have created positive momentum to unlock it will be important to provide comprehensive private sector opportunities. assistance and incentives to the local private sector to stimulate economic recovery and create IFC notes that economic reforms will not be job opportunities. Such efforts can empower sufficient to attract private investment and may need 70 Government Portal. “Ministry of Finance: About 43,500 soft loans amounting to UAH 173.5 billion issued under Affordable Loans at 5-7-9% State Programme.” December 25, 2023. Link. 50 RECOVERY and RECONSTRUCTION PRIORITIES and PRINCIPLES communities, enhance resilience, and pave the way design and deliver solutions that meet these needs for long-term prosperity. with tailor-made packages to support communities. These support packages could also offer mental Effectively scaled up and accessible social health and psychosocial support, assistance with protection programs are at the core of GoU’s livelihoods and business financing, and technical recovery agenda, which pays particular attention assistance to facilitate return and integration of to vulnerable groups and their needs. Social refugees and IDPs. services, including employment-related measures with underlying budgeting and estimated Persons with disabilities. The rising number of implementation priorities, are indicated under the persons with disabilities caused directly by the war social protection and livelihoods sector. Health, highlights the importance of deinstitutionalization well-being, and mental health services for the and community-based living for disabled persons population, particularly for veterans and victims in Ukraine. Socialization and adaptation should of gender-based violence (GBV), are accounted for be at the core of any measures taken, with due under the health sector. To respond to the need of consideration for creating accessible rehabilitation IDPs, the elderly, and people with disabilities and to spaces; the primary aim is the return of such persons address child-care issues, accessible and inclusive to active socioeconomic participation in their infrastructure aspects need to be reflected in community. Establishing accessible and barrier- temporary housing, emergency support options, free environment for the persons with different affordable mortgages, compensations for housing impairments helps persons with disabilities maintain repair and reconstruction, safety designs (including mobility and autonomous care skills, increases barrier-free parameters), construction of bomb their motivation to maintain social contacts, and shelters, and so on. Specific assistance for veterans promotes their participation in the labor market, is envisaged under the 2024 state budget allocations allowing them to contribute to economic growth and for the Ministry of Veterans Affairs; it focuses active decision-making in the community. Housing on the transition to civilian life (UAH 3.8 billion, and workplace arrangement services should be or about US$100 million) and mental, physical, introduced to facilitate rehabilitation and enable and psychological rehabilitation and professional effective social and labor adaptation for persons adaptation (UAH 2.5 billion, or about US$66 million). with disabilities. The priority is to strengthen Ministry of Social Policy programs with 2024 budget community-level facilitation by meeting the needs of allocations include support for persons who have those returning to their communities so they can live suffered from GBV (UAH 200 million, or about as independently as possible. US$5.3 million) and provision of small group homes and housing for children (UAH 575 million, or about Veterans and their families. Guaranteed access US$15 million). Civic and economic initiatives for to housing and health services, rehabilitation, youth that focus on physical culture and sports are prostheses, essential drugs, employment essential for attracting youth to return to and grow opportunities, education/retraining options and in the country. The Ministry of Youth and Sports has prior consideration of the needs of the specified a 2024 budget of UAH 94 million (US$2.5 million) for categories and personal life circumstances should youth economic activities and a budget totaling UAH underline any community support for veterans. 5 billion (US$132 million) for physical culture and Demobilization efforts and effective social and sports. The Ukraine Youth Fund and the Ukrainian economic reintegration should take into account Veterans Foundation have been established to the changing demographic profile; moreover, the attract and coordinate support to youth and veterans implementation of the transition strategy from armed as alternative off-budget financing tools. service to civilian life must include psychological and legal assistance; social, professional, and Displaced persons and returnees. There is a need skill development; and cultural adaptation and life to invest in housing, basic services, social protection, planning support—not just for members of the and livelihoods, all of which are regularly cited by military and war veterans, but also for their family refugees and IDPs as enablers of return, integration members, and family members of fallen soldiers. of IDPs and their durable solutions.71 Partnerships between central- and local-level authorities, civil Gender-specific impacts. Gender equality and society, academia, and the private sector can help to nondiscrimination reforms need to be an integral 71 UNHCR, Lives on hold: Intentions and Perspectives of Refugees and IDPs from Ukraine #4, Link. RECOVERY and RECONSTRUCTION PRIORITIES and PRINCIPLES 51 part of recovery and reconstruction planning, through counseling and support groups to address with civil society organizations and advocacy mental health issues, social and physical activities groups that represent women and LGBTIQ+ for displaced and idle youth, and training and individuals participating fully and equally in state guidance to promote youth employment. These and local planning processes. Gender equality measures will contribute to the growth agenda and and a women’s empowerment agenda—including ensure a future-oriented Ukraine by drawing the women’s expanded access to and inclusion in the country’s young people into both national and local- labor market and business in order to build short- level recovery planning and reconstruction. At the and long-term economic security—are priorities to community level, the system of childcare and child ensure that building back better in Ukraine proceeds rearing must be transformed so that it meets the in a gender-responsive and inclusive way. Within the country’s economic development needs; contributes recovery process, it will be important for women to the development of social, educational, medical, to be engaged in decision-making at all levels and other services at the local level; and protects the where gender-responsive planning, budgeting, right of children to grow up in a family. and monitoring tools are applied. Among the most urgent issues is how to prevent and respond to GBV Elderly. A combination of community-based social that is a direct result of the war or indirectly due to services, employment assistance programs, and the stressors of war. investment in inclusive infrastructure with barrier- free public transportation will meet the elderly Youth and children. High-quality in-person education populations’ critical needs and ensure attainment of with reliable security conditions allows children to the long-term goal of deinstitutionalization. Efforts socialize with peers and lays a foundation for the to strengthen cooperation among neighboring large-scale return of children and young people to communities, or indeed to establish redistribution the country and for their future productivity and mechanisms between communities, will ensure employment. The functions of the community- equitable access to service provision. based youth infrastructure should be strengthened 52 MACROECONOMIC IMPACTS Ministry for Restoration, Agency for Restoration, Service for restoration and development of infrastructure in Dnipropetrovska oblast. Kryvyi Rih district of Dnipropetrovska oblast. MACROECONOMIC IMPACTS 53 Economic and Poverty Update rate of UAH 36.57 per US$1; but it has been depreciating since late November 2023. Ukraine’s Despite Russia’s on-going invasion of Ukraine, cash exchange rate—the rate at which households economic growth in 2023 exceeded expectations. In can sell foreign currency—has diverged from the 2022, the widespread destruction of infrastructure, official rate since February 2022, but the difference internal and external displacement, and attacks on has narrowed since the transition to a more flexible the energy infrastructure had led to a 29.1 percent regime; in early January 2024, average cash selling GDP contraction; but Ukraine’s economy has since and buying rates differed from the official rate by 1.3 shown signs of recovery and resilience. More reliable percent and 2.3 percent, respectively. electricity supply, an exceptional wheat harvest, and the steadier receipt of external assistance have After recording a surplus in 2022, Ukraine’s current allowed for gradual growth recovery in 2023, with account turned into a deficit in 2023. By November GDP expanding by 19.5 percent and 9.3 percent in 2023 Ukraine’s trade deficit had reached US$34 Q2 and Q3, respectively (Figure 22). Yearly growth billion, which exceeded the deficit during all of 2022 for 2023 is estimated at 4.8 percent, with potential by US$9 billion. The increase in the trade deficit was to the upside. This constitutes a significant upward driven by a US$6 billion reduction in merchandise revision from the 2 percent growth rate projected in exports, partially resulting from continued export mid-2023. On the demand side, growth was driven by bottlenecks, including the discontinuation of the continued strong public consumption and a modest Black Sea Grain Initiative, blockades of Ukrainian expansion of exports; the supply side was helped agricultural exports by some neighboring countries, by better-than-expected agricultural output (Figure attacks on the trade infrastructure, and a continued 23) and continued growth in sectors supporting increase in imports. While Ukraine was able to open the war economy. Growth in 2024 is expected to new shipping routes through the Black Sea, these be slower than in 2023: base effects and one-off were unable to compensate for the loss of volume factors, including the agricultural harvest, will caused by the other shocks to export logistics. At subside, whereas key growth constraints related to the same time, Ukraine received US$20.6 billion in the invasion, low investment, constrained exports, secondary income, almost US$1 billion less than in and the need for a restrictive monetary policy, will the same period in 2022. Foreign aid through loans remain. was sufficient to finance the current account deficit while accumulating over US$10 billion in reserves, Monetary policy has remained restrictive which reached a historic peak of US$41.7 billion in throughout 2023, which has contributed to a July 2023 before decreasing modestly to US$40.5 substantial decline in inflation and facilitated the billion by January 1, 2024. transition to a slightly more flexible exchange rate regime. The National Bank of Ukraine entered Greater needs for defense expenditure necessitated 2023 with an exchange rate pegged to the US dollar a significant revision of the 2023 budget and an and a key policy rate of 25 percent. This policy expansion of the fiscal deficit. Nominal expenditure stance helped to anchor inflation expectations, in 2023 reached UAH 4.4 trillion, 46 percent higher attract bank deposits, and increase private savings, than in 2022. This increase was driven by higher thereby contributing to a gradual decline in inflation spending on goods and services, primarily for throughout 2023. At the end of 2023, inflation was defense needs, which reached UAH 1.7 trillion, 97 estimated at only 5.1 percent, compared with 26.6 percent more than in 2022. Capital expenditures percent at the end of 2022. The decline in inflation and interest payments also increased, albeit from was also aided by conducive supply-side factors, a significantly lower base. Total revenue (excluding as high agricultural yields and export bottlenecks grants) reached UAH 2.7 trillion (56 percent more boosted excess domestic food supply. With the than in 2022). Most of the increase is accounted for decline of inflation exceeding expectations (mid-year by UAH 840 billion in profit transfers from budgetary World Bank projections had end-of-year inflation institutions, including the National Bank of Ukraine. rates at 14 percent), the National Bank of Ukraine has Tax revenues broadly increased in line with inflation taken steps to adjust its monetary policy, gradually and were aided by a return to prewar excise duty and lowering the nominal policy rate to 15 percent and VAT rates for motor fuels starting July 1. The high transitioning to an exchange rate regime of managed expenditure outturn necessitated a budget revision flexibility. Following the implementation of this for 2023, enacted in October, which targets a general system, the exchange rate temporarily appreciated, government fiscal deficit (excluding grants) of 27 dropping below UAH 36 per US$1 from the pegged percent of estimated GDP. 54 MACROECONOMIC IMPACTS External aid through grants and loans was the service payments unless it reaches an agreement main mechanism used to finance the budget deficit. with creditors on a debt treatment or an extension In 2023, international partners provided Ukraine of the moratorium. The pressures on the budget are with the equivalent of US$11.9 billion (6.7 percent reflected in the fiscal deficit (excluding grants), which of GDP) in grants and US$29.7 billion (16.8 percent the 2024 state budget expects to be 20.5 percent of of GDP) in loans, which in addition to financing the GDP, compared to the targeted 27 percent of GDP deficit covered 1.1 percent of GDP in external debt in the October revision of the 2023 budget. Similar amortization. Domestic borrowing in local and to the share in the 2023 budget, 95.1 percent of the foreign currency provided 3.7 percent of GDP in 2024 budget is channeled to current expenditure, financing net of amortization. and only the remaining UAH 176.8 billion (US$4.8 billion) is budgeted for capital expenditure. Macroeconomic Risks Overview and The 2024 budget plans for the receipt of US$37.3 Policy Recommendations billion in external aid (loans and grants) to finance the deficit, but these resources have not The 2024 state budget reflects the current outlook been committed yet. Specifically, critical external of continued hostilities throughout the year. The financing sources from the United States and the invasion has generated elevated expenditure needs European Union remain uncertain at the time of for defense, amounting to UAH 1,692.6 billion writing and it is unclear if Ukraine will receive (US$46.3 billion), or a forecasted 22.1 percent of GDP. sufficient aid in 2024 to meet its budgetary needs. This is less than the UAH 1,973 billion (US$54 billion) Should aid subside, the Ukrainian authorities could that was budgeted for 2023, but it remains the main partially meet the increased needs from domestic expenditure item. Social protection expenditure sources. For example, in 2023, a redistribution of is critical for restraining the rising poverty and income tax revenue from local budgets to the state dampening the negative effects of unemployment, budget added US$0.7 billion in state revenue. Yet which erode the social contract. Accordingly, the such sources cannot compensate for all external 2024 budget has allocated UAH 469.4 billion (US$12.8 financing. Therefore, where available, external billion) to social protection, an amount similar to the financing needs to be prioritized for meeting UAH 469.3 billion (US$12.83 billion) spent in 2023. budget needs before being allocated to additional Interest payments are budgeted to increase from reconstruction and capital expenditure. In addition, UAH 253.9 billion (US$6.9 billion) in 2023 to UAH 422 the Ukrainian authorities will need to mobilize billion (US$11.5 billion) in 2024, putting additional additional revenue. The implementation of the initial pressure on the government budget. In addition, steps in the National Revenue Strategy contributes Ukraine’s moratorium on external commercial toward this goal by broadening the excise base and debt payments is set to expire in August 2024, and collecting revenue from additional taxes on the Ukraine will be liable to resume significant debt banking sector. Figure 22. Ukraine real GDP growth, year-on-year (YoY) 30 19.5% 20 9.3% 10 6.2% 6.3% 2.9% -2.3% PERCENT 0 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 -10 -14.9% -10.5% -20 -30.6% -30 -31.4% -36.9% -40 Source: State Statistics Service of Ukraine. MACROECONOMIC IMPACTS 55 The public sector has an instrumental role to play invasion is revealed. Recognizing the limited fiscal in the reconstruction of Ukraine once hostilities space while hostilities continue, Ukrainian authorities end. Restoring Ukraine’s productive capacity and can prioritize less fiscally demanding policies that reversing the destructive impact of the invasion create an environment conducive to donor support will require significant public intervention, such as and private sector participation in reconstruction. rebuilding essential infrastructure, encouraging Such policies, coupled with domestic revenue financing of promising businesses, and supporting mobilization, will enable the eventual successful the financial sector as the full financial cost of the reconstruction of Ukraine. Figure 23. Yield by Commodity 9 8 Corn 7 METRIC TON PER HECTARE 6 5 Wheat 4 Barley 3 Oilseed (sunflower seed) Oilseed (rapeseed) 2 1 0 2015 2016 2017 2018 2019 2020 2021 2022 2023 MARKET YEAR Source: U.S. Department of Agriculture, Foreign Agricultural Service. 56 HUMAN IMPACT ASSESSMENT Caption: A pram is seen against the backdrop of a destroyed bridge in Irpin, Kyiv oblast UNHCR Alina Kovalenko. HUMAN IMPACT ASSESSMENT 57 Displaced Persons and Returnees Summary and public life (social tensions).74 The proximity of hostilities is the dominant factor in refugees’ decision about whether to return to Ukraine.75 UNHCR’s periodic At the start of the war, 13.5 million people— intention surveys find that 76 percent of refugees from approximately one-third of Ukraine’s population— Ukraine and 82 percent of internally displaced persons were displaced. Some have since returned to their hope and intend to ultimately return to their home places of origin. As of December 2023, an estimated in Ukraine, and that the key enablers of sustainable 5.9 million people were recorded as refugees across return – apart from security and safety which is cited Europe,72 compared with the 8.1 million reported in by 95 percent - are access to housing, basic services RDNA2 as of February 2023. As of October 2023, and jobs.76 Refugees who have undertaken short IOM estimated 3.7 million internally displaced visits to Ukraine, to visit family members and their persons (IDPs), compared to 5.4 million people in the community, are more likely to express an intention RDNA2 report.73 The number of individuals officially to return compared to those who have not been back registered as IDPs with the Ministry of Social Policy to Ukraine since they fled.77 Decisions may also be has been increasing since February 2022, peaking affected by the difficulty of returning to host countries just under 4.9 million in December 2022; fluctuating, after visits to Ukraine. Among people who returned to and reaching 4.9 as of December 2023 (Figure 24). host countries following visits to Ukraine, the share reporting challenges tripled between Q4 2022 and Q3 Both external and domestic factors have driven the 2023, from 6 percent to 18 percent. These challenges return of displaced persons to their places of origin. included revocation of legal status, suspension The IOM Displacement Tracking Matrix (DTM) identifies of social protection benefits, and obstacles when five drivers for returns: livelihoods; utilities and reentering host countries.78 services; residential destruction; safety and security; Figure 24. Number Of Registered IDPS In Ukraine (Million), March 25, 2022–December 31, 2023 4.913 4.903 4.873 4.869 4.846 4.843 4.579 4.162 3.606 3.605 3.549 3.525 3.511 3.509 3.217 2.850 2.776 2.737 2.731 2.703 2.702 2.693 2.654 2.496 1.538 0.063 0.062 March 25, June 1, September 1, December 1, February 24, March 1, June 1, September 1, December 31, 2022 2022 2022 2022 2023 2023 2023 2023 2023 Registered IDPs, total IDPs displaced after February 24, 2022 Registered for the first time since February 24, 2022 Source: Ministry of Social Policy of Ukraine, “Dynamics of Key Indicators That Characterize the State of Registration, Re- registration and Record Keeping of Internally Displaced Persons for the Period of Martial Law.” 72 UN High Commissioner for Refugees (UNHCR), Operational Data Portal, Link. 73 IOM, ”Ukraine—Returns Report—General Population Survey Round 14 (September–October 2023),” November 10, 2023, Link, 74 IOM, “Ukraine: Conditions of Return Assessment Factsheet—Round 3 (June 2023),” Link. 75 Other factors include integration into host countries, education and employment opportunities in host countries, and reunion with family members in Ukraine. 76 UNHCR, Lives on hold: Intentions and Perspectives of Refugees and IDPs from Ukraine #4 , Link. 77 Ibid. 78 UNHCR Operational Data Portal, “Displacement Patterns, Protection Risks and Needs of Refugees from Ukraine: Regional Protection Analysis #3,” November 2023, Link. 58 HUMAN IMPACT ASSESSMENT Observed Impacts who moved continued receiving cash transfers.83 Enhanced targeting since July 2023, however, has To receive IDP assistant, IDPs must be registered improved the program’s efficiency and increased its and have an IDP certificate. IDPs had been eligible fiscal sustainability. for a monthly allowance and housing support, but in 2023, the GoU changed the criteria for aid eligibility, Affordable and accessible housing is a challenge namely revising the residency criteria, including an for IDPs, especially the most vulnerable. Most IDPs assessment of financial and property status, limiting temporarily relocate to reside with family and friends the payment term to a six-month period (under or find rental or other long-term accommodations. certain conditions, this term may be extended), and However, approximately 120,000 remain in collective also introducing current and preventive verification sites on a permanent basis. These individuals tend mechanisms. The aim is to reduce the expected to be the most vulnerable: the elderly, solitary number of IDP beneficiaries in 2024 to 170,000, persons, and sick and/or disabled persons.84 Few down from 2.6 million in 2023 (according to the IDP households can afford to purchase a home, and ombudsman for human rights). rental housing is both scarce and expensive in areas of high IDP concentration. The most vulnerable IDPs IDPs were experiencing employment challenges struggle to find affordable rental housing that meets before February 2022. In 2020, 60 percent of IDPs the needs of the elderly, those with disabilities, or ages 20–64 were employed, compared to 69 percent others with limited mobility. of peers in the general population. This discrepancy represents an improvement in IDP employment from Unemployment and underemployment are more prior years.79 extreme among IDPs. As of January 2023, only 30 percent of IDP households had a salary as their The average IDP household size is 3.3 individuals; primary source of income,85 and 24 percent relied on 43.6 percent of IDPs are of working age; 21.2 government transfers for income. Many employers percent are children; and 26 percent are elderly.80 are reluctant to hire IDPs, seeing them as transient. This indicates that these households tend to be IDPs also often lack necessary documentation for larger compared to the average household size in formal employment, such as proper termination Ukraine before the invasion (2.58 persons).81 from previous places of work in their home regions. To mitigate this challenge, in 2022 the government The state provides all displaced persons with introduced an employer subsidy—UAH 6,500 monetary assistance. Disabled persons and children (US$178) per month for two months—for hiring IDPs. under 18 receive UAH 3,000 (US$83) monthly, while adults receive UAH 2,000 (US$55) monthly for For households with children, employment the duration of displacement.82 However, the cash difficulties are exacerbated by schooling issues. transfers are insufficient to meet essential needs. Host communities in the east of the country rely on online schooling, and preschools in the country’s The program supporting IDPs has become fiscally center and west lack the capacity to absorb IDP unsustainable. In 2022, IDP cash transfers totaled children. Beyond slowing integration and learning UAH 53.5 billion (US$1.5 billion), half of which among the youngest IDPs, this creates a barrier was funded through external aid. Monitoring and to employment for IDP caregivers, who are mostly verification of IDPs was also inadequate, and some mothers. 79 IOM, “National Monitoring System on the Situation with IDPs: Summary of Key Findings,” Link. 80 IOM DTM. 2023. Ukraine — Snapshot report: Population Figures and Geographic Distribution — General Population Survey Round 13 (11–23 May), Link. 81 State Statistics Service of Ukraine. 2022. Sex and age population structure, Link. 82 Cabinet of Ministers of Ukraine. March 2022. Decree 332 “Some issues of payment of accommodation allowance to internally displaced persons”, Link. 83 Law and Business, “Uncontrolled Payments to IDPs Deplete the State Budget,” July 5, 2023, Link. 84 IMPACT REACH Initiative. April 2023. Collective Site Monitoring Round 7, Link. 85 It should be noted that only 45 percent of non-IDP households had a salary as their primary source of income; this figure speaks to the widespread unemployment and underemployment in Ukraine during the war. IOM DTM. 2023. Ukraine — Internal Displacement Report — General Population Survey Round 12 (16–23 January 2023). Link. HUMAN IMPACT ASSESSMENT 59 Recovery and Reconstruction Needs, under); and in facilitating the aggregation of home including Build Back Better care beyond individual caregivers. Provide IDPs with vocational training for Evaluate the effectiveness of the IDP cash re-qualification and with microfinance for assistance program, the adequacy of cash transfers entrepreneurship. NGOs and voluntary organizations to meet the basic needs of low-income IDPs, and that have been aiding IDPs should move beyond the fiscal sustainability of the program. Through humanitarian relief to promote livelihoods by training Resolution of the Cabinet of Ministers No. 709, IDPs for re-qualification and providing microfinance dated July 11, 2023, the GoU has enhance targeted for small-scale entrepreneurial activities. Technical support to IDPs. It should also increase the focus on and vocational education training (TVET) institutions housing rental support, since the program does not should also be utilized. currently account for geographic variations in rents; and it should offer additional childcare options, so Prepare a time-bound strategy to relocate individuals parents have opportunities for employment and the residing in collective sites. Most IDP households stay associated income. temporarily at collective sites and then relocate to family and friends, rental housing, or other longer- Construct or renovate kindergartens and schools term accommodations. The estimated 100,000-plus in overstretched IDP host communities and individuals who remain at these sites are among expand access to home-based care. IDP families— the most vulnerable and include the elderly, solitary mostly women and children—are clustered in host persons, disabled persons, and those unable to afford communities with inadequate capacity for childcare, housing at market rates. A time-bound action plan preschool, and secondary education. Local is needed to relocate these individuals to affordable governments should be supported in building more and accessible housing and/or to convert collective kindergartens and bomb shelters to meet security site buildings into appropriate long-term housing. requirements; in expanding the Municipal Nanny Instruments for subsidizing rent for IDPs and other program to cover the cost of a nanny for children six vulnerable persons should be developed as one of the and under (it currently applies to children three and tools for providing social housing. Youth (Aged 14 – 35) and Child Protection and Rights Summary moved toward inclusive classrooms for children with disabilities, though inaccessible infrastructure and This section focuses on the youth demographic transport and lack of adapted materials remained as defined by the United Nations—i.e., individuals problems. ages 15 to 24; but it also includes information on those 14 to 35, which is the definition of youth in Before February 2022, Ukraine was home to Ukraine.86 This age bracket represents a crucial 3,893,000 young people ages 15 to 24 (representing phase of transitioning from childhood to adulthood, 9.5 percent of the population) and to 10.5 million marked by selection of educational paths, entry into people ages 14 to 35 (representing about one- the workforce, and career-related decision-making. quarter of the population).87 Two-thirds (67 percent) of young people lived in cities. The share of males Before February 2022, Ukraine’s network of youth in this age group slightly exceeded the share of centers provided educational and career guidance females at 51.5 percent.88 Following the decade- and legal aid for vulnerable youth. Ukraine had also long decrease in birthrate,89 since aggravated by the 86 United Nations Department of Economic and Social Affairs (UNDESA), “Definition of Youth,” Link. 87 Data on population are from the State Statistics Service of Ukraine (SSSU) and are as of January 1, 2022. 88 SSSU provides population data, including age and regional distribution, that are estimations based on data from the last general census, conducted in 2001. Thus the real number of young people and their distribution may differ from SSSU estimates. After the war began, SSSU stopped assessing the size of the population and surveying households, so there is no information on the number of young people after March 1, 2022. 89 SSSU, 2022 data. 60 HUMAN IMPACT ASSESSMENT war,90 the number and share of youth is expected to and future.95 Nearly two-thirds of parents (61 percent) gradually decrease in the future. believe their children have signs of stress and poor sleep; 24 percent of young people ages 14–24 believe In 2022, 58,630 children were in institutions with their psychological state has deteriorated; and 11 24-hour stay, among them 5,626 orphans (children percent believe they need psychological help.96 deprived of parental care). Of this number, 4,909 children were under full state support in institutions. Reintegration of displaced youth into secondary, As of August 2023, 5,083 children were under full vocational, and higher education systems will be state care in institutions (including 1,309 children with critical for long-term employment, productivity, disabilities) and need placement in noninstitutional and earnings. The government is developing plans educational settings.91 and tools for addressing war-related learning losses. Ukraine’s 2019 Strategy for Development Observed Impacts of Educational Assessments in Secondary Schools by 2030, not yet implemented, is being updated for rollout.97 A learning assessment toolkit for grades Since February 2022, children and youth have been 6–8 has also been developed. heavily impacted by displacement. Some 37 percent youth have experienced internal displacement; this In-person learning remains disrupted by a lack share consists of 20 percent who have returned to of equipped and accessible bomb shelters with their places of origin, 11 percent who intend to return, enough space for all students. Students can access and 6 percent who do not intend to return. According in-person classes only if educational institutions are to the Ministry of Social Policy, as of December equipped with bomb shelters – and if these shelters 2023, 1.04 million children under the age of 18 are too small to accommodate all students and school were registered as IDPs. UNHCR data shows that staff, education takes place in shifts. As a result, 36 percent of the refugee population are children.92 the GoU and local governments have prioritized According to the Ministry of Youth and Sports, about the establishment of bomb shelters in educational 2 million youth ages 14 to 35 are still abroad, which institutions across the country: as of December 2023, is around 20 percent of this age group. In addition, 80 percent of educational institutions in Ukraine an unknown number of youth up to the age of 35 were equipped with bomb shelters, compared to 68 are in military service, including those conscripted percent in December 2022. However, many of these to temporary service in 2020–2021 and those who shelters are established in the basement of the volunteered or were conscripted after February institution and lack adequate equipment for the well- 2022.93 being of students. Many shelters are not guaranteed to be secure, as their construction has not been Children and youth have suffered learning losses systematically assessed against the standards set and increased mental health challenges. Data from by authorities. In addition, important geographical the 2022 iteration of the Program for International disparities remain: as of May 2023, only 54 percent of Student Assessment (PISA) found that learning schools in Odeska, 41 percent in Dnipropetrovska, 23 levels decreased compared to 2018—in math by 12 percent in Mykolaivska, and 5 percent in Kharkivska points, in science by 19 points, and in reading by 38 had shelters, per Ministry of Education and Science points.94 Parents and teachers perceive deteriorating data. Therefore, online learning remains a defining mental health and significant learning losses owing feature of the Ukrainian education system. According to the COVID-19 pandemic and subsequent invasion. to the Ministry of Education and Science, as of Eighty-five percent of surveyed parents agreed that September 2023, nearly two million children, more the pandemic- and war-related knowledge and skills than 50 percent of the 3.837 million children enrolled gap would have an impact on their child’s education 90 Opendatabot, “The Birth Rate in Ukraine Has Decreased by 28% Since the Beginning of the Full-Scale War,” July 31, 2023, Link. 91 Data are from the Ministry of Social Policy of Ukraine 92 UNHCR, Ukraine Situation Regional Refugee Response Plan (January-December 2024), Link. 93 Access to data on the general mobilization and those who volunteered for the military is restricted. 94 UNICEF, “Education Survey Reveals Impact of War on Ukraine’s Students,” December 5, 2023, Link. 95 Cedos, “War and Education: How a Year of the Full-Scale Invasion Influenced Ukrainian Schools,” March 21, 2023, Link. 96 United Nations Population Fund (UNFPA), “Impact of the War on the Youth in Ukraine,” 2023, Link. 97 Ukrainian Center for Educational Quality Assessment, “Strategy of Educational Assessments in Ukraine until 2030,” July 11, 2019, Link. HUMAN IMPACT ASSESSMENT 61 in Ukrainian schools, remain reliant on online or the war. No data exist on the number of Ukrainian blended education, with 2,321 schools across the students who continue to participate in the Ukrainian frontlines closed for safety reasons. Yet, virtual education system from abroad. learning infrastructure is underdeveloped, leaving few learning opportunities for students without Financial and human resources to support access to bomb shelters or undamaged, well-staffed vulnerable youth have been diminished, for schools, for internally displaced students, for those example, for coordinating volunteers and delivering with disabilities, or for those in areas not under humanitarian aid, and youth center buildings have government control. been damaged, destroyed, or repurposed. Of 300- plus youth centers, 14 have been destroyed and Existing legislation establishes broad categories of 24 damaged, while 64 are located in territories youth eligible for post-secondary financial support, temporarily not under government control. Local such as orphans, those in active combat areas, government financing for youth policy and programs those with war-related disabilities, and others. But was also cut by 36 percent in 2022. As of 2023, more current levels of support are below the subsistence than 120 youth centers and more than 140 youth minimum and inadequate to cover expenses.98 spaces continue to operate and have almost fully resumed their work.102 Educational continuity poses an additional challenge for refugee children and youth. In Despite the challenges, many young people European countries, in-person participation in the have played a role in emergency response as national secondary education system is usually volunteers, helping to distribute humanitarian compulsory. Students may continue with their aid and supporting vulnerable populations. Since Ukrainian education while engaging in the host February 2022, the number of young people serving country’s school system, though participation in as volunteers has increased substantially: one two educational programs increases the pressure survey shows that 30 percent of young volunteers and stress for students and their parents. Those volunteered for the first time in 2022, compared with who continue with the Ukrainian education system 6 percent in 2021.103 may choose online learning, homeschooling,99 or an external education approach.100 According to Most children have witnessed traumatic events UNHCR’s study, only about half of Ukrainian refugee or suffered losses, mistreatment, or violence as children across Europe were enrolled in schools in a result of the war. UNICEF analysis suggests the host countries for the 2022-2023 academic year.101 percentage of children living in poverty has almost As of May 2023, approximately 780,000 Ukrainian doubled from 43 percent in 2021 to 82 percent.104 refugee students had been integrated into other EU The UN’s independent international commission school systems. There is a significant risk, however, of inquiry into Ukraine has documented legal and that such students will enroll in foreign universities political measures against Ukrainian children and not return to Ukraine. This trend would worsen deported to the Russian Federation. According to the demographic and human capital situation Article 8 of the Rome Statute of the International in Ukraine. In turn, this would impede Ukraine’s Criminal Court, illegal deportation or transfer or potential to recover from the consequences of illegal deprivation of liberty is a war crime; according 98 Subsistence minumum is UAH 2684 per month whereas the unversity social stipend is UAH 540 - 1180 per month and the academic scholarship UAH 1,250 - 2,000 per month depending on education level. 99 Homeschooling involves the independent mastering of the school curriculum by a student under the guidance of parents or guardians, while being affiliated with a school. Parents or guardians teach the educational material, while teachers draw up an individual curriculum and provide consultations. Assessment of academic achievement takes place at least four times a year, and if students receive an unsatisfactory grade, they must return to school. 100 The external education approach involves independent study of the school curriculum without school affiliation. Students take tests once a year and consult with their teachers. According to Ukrainian law, only children who belong to certain categories are eligible for this approach. 101 UNHCR: “Education on Hold: Addressing barriers to learning among refugee children and youth from Ukraine – challenges and recommendations”, Link. UNHCR: Education on hold: Education Policy Brief (September 2023), Link. 102 Ukrinform, “Maryna Popatenko, Deputy Minister of Youth and Sports: Young People Are Interested in the Reconstruction of Ukraine, so We Must Create Such Conditions for Them to Return,” February 27, 2023, Link. 103 United Nations Development Programme (UNDP), “Impact of War on Youth in Ukraine: Findings and Recommendations,” 2023, Link. 104 UNICEF: “War in Ukraine pushes generation of children to the brink, warns UNICEF”, 21 February 2023, Link. 62 HUMAN IMPACT ASSESSMENT to Article 6, forcible transfer of children from one particularly the most vulnerable; and both national ethnic, religious, racial, or national group to another and local youth organizations should be included in constitutes genocide.105 The government is taking all planning for recovery and reconstruction. necessary measures to ensure the return of children who were taken to Russia or Belarus. As of December Repair and reconstruct multipurpose youth 2023, 19,546 children had been deported and 387 centers. During the war, many youth centers returned;106 21,074 children had disappeared and have been damaged or repurposed for broader 2,237 found;107 and 1,152 children had been injured humanitarian response efforts, with youth-oriented and 511 killed.108 services largely discontinued. A priority investment program to repair and reconstruct these centers Taking into account the need to approximate EU to better serve ongoing humanitarian efforts and standards and align to the requirements for EU restore youth services is recommended. accession in social support for children in Ukraine, the Ministry of Social Policy is implementing a Implement youth economic empowerment comprehensive policy aimed at placing children programs through training in entrepreneurship and who are evacuated in family-type settings rather job acquisition. As a result of massive displacement than institutions. One of the critical factors in this within and outside of the country, there is a large regard is the availability of appropriate housing; and growing gap between labor market supply the lack of housing with a sufficient area for large and demand. One way to bridge this gap is to numbers of children is a key impediment to such improve competencies for youth employment and arrangements. entrepreneurship, in part by building partnerships with the business sector and offering high-quality internship programs. Recovery and Reconstruction Needs, including Build Back Better Revise legislation on financial support for post- secondary education of vulnerable youth. Existing Strengthen support for online education in zones legislation establishes broad categories of youth of recent or ongoing hostilities and expand eligible for post-secondary financial support, but opportunities for distance learning and access to current levels of support are below the subsistence technology and devices. In areas where schools have minimum and inadequate to cover expenses. Low- been damaged and staff depleted, digital education income students within these categories should be centers could provide reliable and secure access to targeted with more effective coverage. online education. Students from vulnerable groups, such as IDPs, those with disabilities, and those living Pursue deinstitutionalization of children. This in areas temporarily not under government control, should be done for human rights reasons, as part would also benefit from online learning opportunities of Ukraine’s candidacy for EU accession, to save and distribution of laptops. the GoU money (the average cost of a child’s stay in a social protection institution is approximately Strengthen the existing youth infrastructure by US$409.8/month, compared to US$276 a month in a supporting cooperation between authorities and family-type children’s home), and to meet the needs the NGO youth sector, and by working to involve of the labor market.109 young people in decision-making about the recovery process. Develop housing for family-type children’s homes. This is a priority of the Ministry of Social Policy. Assess the needs of children and youth at the local The goal is for children in institutions in Ukraine or level and involve youth organizations in planning. returning from evacuation abroad to be housed in Hromadas should introduce feedback mechanisms such settings. to monitor the evolving needs of young people, 105 United Nations, “Rome Statute of the International Criminal Court,” 1998, Link. 106 National Information Bureau data. 107 National Police of Ukraine data. 108 Office of the Prosecutor General data. Exact data on the number of injured are not available, given ongoing fighting and the GoU’s temporary loss of control over some territories. 109 Ministry of Social Policy of Ukraine data. HUMAN IMPACT ASSESSMENT 63 Elderly Persons Summary Many elderly face mobility issues that render IDP transport and housing options inaccessible and unaffordable. Lack of affordable transport has been A significant proportion of the elderly (individuals a barrier to health care for the elderly, especially ages 60 and above) are impoverished and unable as staff shortages have concentrated care in larger to meet basic needs. Compared to the general urban areas. Elderly displaced without family tend to population, they are less able to purchase winter remain for long periods in the “temporary” collective outerwear and footwear once in five years, consume sites used for IDP transit. a protein every other day, or adequately heat their homes.110 Existing social benefits are insufficient to The elderly face discrimination and other resolve this issue. difficulties in the labor market. Many elderly adults seek work to supplement meager pensions, but The elderly have been disproportionally impacted face discrimination based on age, health status, by the war. They constitute 25 percent of Ukraine’s and disabilities. Many who do work are in low- population yet account for 35 percent of the civilians skill jobs that are informal and insecure. Enhanced killed in the first year of fighting.111 They are now the digital literacy and professional retraining might largest share of the population in areas affected help older workers, but data on the use of relevant by war, close to the front lines, or temporarily not State Employment Service programs are not under government control. According to HelpAge disaggregated by sociodemographic characteristics, International, Ukraine has the largest percentage of making it difficult to analyze programs’ effectiveness. older people impacted by ongoing war in the world.112 The pension system needs to be adapted to facilitate prolonged working lives in the formal sector. Observed Impacts The elderly often lack access to important The elderly in war zones face severe hardships information. Information about evacuation and high risk; many have been unable or unwilling procedures, temporary accommodations, and to evacuate, given logistical challenges and long-term services for the elderly in new locations displacement uncertainties. Those living in active is either not available or difficult for the elderly to combat zones, on the shifting front lines, or in access digitally. Procedures to apply for social territories temporarily not under government control benefits, such as IDP cash transfers, are not well face challenges with housing, with access to food, tailored to those with limited mobility or digital skills. medicine, and health services, and with feelings of loneliness and isolation. Recovery and Reconstruction Needs, The war has exacerbated poverty among the including Build Back Better elderly. A survey conducted in December 2022/ January 2023 found that 61 percent of elderly women Conduct a communications campaign on and 46 percent of elderly men could not afford to entitlements targeted to the elderly. The elderly meet basic needs.113 Accessible housing is typically should be better informed about changes in the unavailable, and affordable rental housing is scarce Pension Fund and in application procedures for for those on pensions below the poverty line. About housing and utility benefits, as well as other benefits a quarter of elderly-headed households face unmet for IDPs and people with disabilities to which they food security needs.114 may be entitled. Housing and transport infrastructure is Revise systems of social support for the elderly unaffordable and/or inaccessible for the elderly. (both pension legislation and social assistance 110 SSSU, “Resident Population of Ukraine by Sex and Age, as of January 1, 2022,” Link. 111 Office of the High Commissioner for Human Rights, “The Human Rights Situation of Older Persons in Ukraine in the Context of the Armed Attack by the Russian Federation,” May 2023, Link. 112 HelpAge International, “Ignoring the Rapidly Ageing Population Will Jeopardize Ukraine’s Recovery,” June 20, 2023, Link. 113 HelpAge International, “Older People on the Edge of Survival in Eastern Ukraine,” March 4, 2022, Link. 114 REACH, “Multi-Sector Needs Assessment (MSNA) 2023: Food Security Preliminary Findings,” October 2023, Link. 64 HUMAN IMPACT ASSESSMENT programs) to better cover their actual expenditures able to receive social services in their communities, on basic needs. Along with ongoing reforms to better improve these services’ financial and administrative target and limit the duration of cash assistance, capacities. For example, the state could co- policy makers should provide a more adequate level finance services, neighboring hromadas could of assistance to the elderly to cover basic needs. The work cooperatively, or hromadas could establish statutory subsistence minimum should remain the a redistribution mechanism to ensure equitable basis for calculating means-tested social assistance access to services. benefits while decoupling it from unrelated payments, fees, and fines. Invest in barrier-free public transportation for the elderly and others with limited mobility. Allow elderly people to participate in employment Reconstruction of public transport systems should assistance programs and adapt programs to incorporate barrier-free infrastructure, and public meet their needs. Barriers to employment among transport and “social taxi” services should be the elderly and those drawing pensions should available in rural hromadas. Affordability should be be eliminated. The elderly should be eligible for ensured through appropriate tariff policies. employment services adapted to their needs, such as strengthening of digital literacy. Elderly IDPs Develop rapid response systems at the local level who have reached statutory retirement age should to protect the elderly. Local self-governments need be placed in temporary programs supporting the capacity and resources to monitor the elderly employment and entrepreneurship among IDPs. and other vulnerable groups in their communities, and to take emergency action as needed. Preventing Strengthen existing community-based social malnutrition and hypothermia and treating chronic service provision. To ensure that the elderly are diseases are most critical for these groups. Persons with Disabilities Summary civilians as well as active and ex-combatants. In the year and a half after February 2022, the number of people with disabilities increased by 300,000.115 In Ukraine, the Medical and Social Expert The Ministry of Veterans Affairs provides for an Commission (MSEC) grants individuals’ disability increase in the number of people with disabilities. status and determines their needs. Ukraine In 2022, at least 145,000 individuals underwent the became a state party to the UN Convention on the MSEC assessment to register officially as persons Rights of Persons with Disabilities (CRPD) in 2006, with disabilities: some but not all of these suffered framing disability both as a human rights issue disability as a result of the war. The complexity and and a development issue. Ukraine’s Law on Social long duration of the assessment procedure create Protection of Persons with Disabilities grants a number of risks for Ukraine’s socioeconomic material, social, household, and medical support. development, as delays in supporting people with However, individuals often do not receive social disabilities may cause some to drop out of the labor support—primarily care services—until they have a market and become permanently dependent on formal status as a person with disabilities. Currently, the state’s financial support. Integration measures care services are not designed to effectively meet should be accompanied by work-based psycho- the needs of people with disabilities—for example, social support. People with disabilities are unnecessarily directed to special institutions. The percentage of IDP families caring for persons with disabilities has risen slightly. RDNA2 indicated The war has resulted in increased cases of trauma that 25 percent of IDP households had one or more and serious injuries, leading to a rapid rise in the household members with a disability.116 This number number of people with disabilities. This includes rose slightly, to 29 percent, in October 2023.117 115 Ministry of Social Policy data; cited in Ukrinform, “There Are 3 Million People with Disabilities in Ukraine—Zholnovych,” September 19, 2023, Link. 116 IOM, “Ukraine—Internal Displacement Report—General Population Survey Round 12 (16–23 January 2023),” Link. 117 IOM, “Ukraine—Internal Displacement Report—General Population Survey Round 14 (September–October 2023),” Link. HUMAN IMPACT ASSESSMENT 65 Observed Impacts For these households, accessible notification and alerts during crises and afterward are crucial.121 Bomb shelters are often inaccessible to people with disabilities. Residential care facilities may lack The war has affected efforts to reform historic accessible bomb shelters, well-defined security institutionalization of people with disabilities. In protocols, or sufficient space to accommodate all keeping with global and European Union norms, residents and personnel; or people with disabilities Ukraine has sought deinstitutionalization of people may be forced to reach or remain in bomb shelters with disabilities in favor of community-based unaccompanied by staff. Larger cities publish housing and support. Progress before February maps of available shelters, but these rarely contain 2022 was limited, however, and it has since reversed. information on accessibility. Residential care facilities are often the only available and affordable housing for people with disabilities Evacuation of people with disabilities118 from areas fleeing hostilities, in part because shortly after where hostilities are ongoing has been challenging. February 2022, the GoU simplified the procedures This is partly due to the legal ambiguity concerning the for admitting people with disabilities and the responsibility for decision-making, implementation elderly into residential care facilities.122 According to of the evacuation, and access to information. The Amnesty International, which analyzed requests to challenge is particularly great where facilities serve regional administrations in 17 regions that provided as guardians for people with disabilities who have data, 3,585 admissions were made into residential been declared legally incompetent. The evacuation care facilities from February 24, 2022, to July 1, protocols in many facilities are too general and 2022, compared to only 998 admissions during a difficult to apply.119 Information on accessible and comparable period in 2021.123 affordable transportation and on accompanying attendants is lacking, contributing to a situation The system of social support for people with in which people with disabilities are caught in disabilities is being reformed in order to provide territories temporarily not under government injured persons with comprehensive rehabilitation control. Local administrative service providers do and psychosocial support. In this approach, the space not provide information on whether IDP centers in which a person lives is adapted to the disability are architecturally accessible. Air raid sirens are so the people with disabilities can maintain mobility, inaccessible for the deaf, while written warnings form self-care skills, and increase motivation to are inaccessible for the blind. Displaced people with maintain social contacts and employment. This disabilities have also lacked sufficient information approach requires multidisciplinary teams of to connect them with social services and assistance specialists and uses the International Classification programs in their new surroundings. of Functioning, Life Limitations and Health (ICF) to assess needs. The ultimate goal is to allow people Humanitarian needs are consistently higher among with disabilities to return to the labor market, and households that include a people with disabilities thus reduce the need for financial support from the than among other households. Nearly a third of state. households that include a people with disabilities face food security gaps. Over half—58 percent— By law, employers are subject to a 4 percent hiring have severe or worse multisectoral needs, which quota for people with disabilities, but they typically is a higher share than for both IDPs and returnees.120 prefer to pay a fine rather than hire people with disabilities. Employers rarely apply for financial assistance to modify workplaces to accommodate 118 As of January 2023, 25 percent of IDPs were persons with disabilities. IOM, “Ukraine—Internal Displacement Report— General Population Survey Round 12 (16–23 January 2023),” Link. 119 UNDP Ukraine, “Rapid Assessment of the Experience of Evacuating People with Disabilities in Ukraine Due to Armed Hostilities: Study Report,” 2022, Link. 120 REACH, “2023 MSNA Bulletin: Ukraine,” Link. 121 UNDP, “Assessment of Accessibility of Information and Notification during Crises and Humanitarian Response,” 2022, Link. 122 The previous procedure required an assessment by the MSEC. The simplified procedure allows people with disabilities and the elderly to be placed in a residential care facility based solely on request, without submitting documentation (including identification). 123 Amnesty International, “Ukraine: ‘I Used to Have a Home’: Older People’s Experience of War, Displacement, and Access to Housing in Ukraine,” December 6, 2022, Link. 66 HUMAN IMPACT ASSESSMENT people with disabilities, as they consider the with disabilities should be alerted to emergency application process too complicated.124 According situations depending on the type of impairment. to the Pension Fund of Ukraine, only 17 percent of people with disabilities are officially employed. Reform legal competency legislation for persons with disabilities by implementing a decision support An updated mechanism for calculating mechanism. Reform is necessary to ensure that administrative and economic sanctions was every person with mental or intellectual disabilities introduced in November 2022. This provides for has access to mechanisms for supported decision- an automated regime that uses data from the State making. This is particularly important because Register of Mandatory State Social Insurance and the war has disrupted long-standing institutional the Centralized Data Bank on Disability Problems to arrangements, creating precarious evacuation and identify enterprises, institutions, and organizations housing situations for many people with disabilities. that did not ensure compliance with the previous year workplace standards. In its first months of Adopt a rights-oriented disability model and operation, this mechanism showed high levels of services based on individual needs. Ukraine needs noncompliance related to employment of people legal changes consistent with the Convention on with disabilities. At the same time, use of the the Rights of Persons with Disabilities. Rather than mechanism led to fines that were three times the immediately provide cash benefits, the state should amount expected. assess individual needs of people with disabilities and provide tailored social services. The capacity of Inclusion of people with disabilities requires an local authorities to provide social services should be accessible living environment and the absence of strengthened; the state can ensure the provision of barriers to services (administrative, social, health those services that are financially and organizationally care, transport, etc.). New State Construction difficult to provide in the territorial community. Regulations on “inclusiveness of buildings and structures”125 came into force on April 1, 2019, As part of Ukraine’s integration into Europe, but do not require developers to implement implement the transition from the medical model appropriate changes if reconstruction or restoration of disability to the biopsychosocial one. Such a of an existing inaccessible building is planned. model assesses a person’s health care, social, Application of the regulations would require the use educational, and employment needs; establishes of universal design principles for new public and the individual’s state of functioning and limitations; residential buildings. However, these regulations and offers supports that meet the individual’s are mandatory only for new construction and not needs. Assessment should use an internationally for the reconstruction, restoration, or capital repair recognized tool like the ICF. of buildings and structures. This exception means that reconstruction efforts may not improve general Develop a cross-cutting strategy and roadmap accessibility or create barrier-free spaces.126 for deinstitutionalization and social service reform for people with disabilities. This effort will require central and local executive authorities and Recovery and Reconstruction Needs, stakeholders to work jointly. It will entail review of including Build Back Better the legislative framework aimed at strengthening the system of social services, a medium-term Develop warning systems for hearing- and action for gradual deinstitutionalization, and long- vision-impaired individuals and persons with term institutional closure in keeping with EU and physical, mental, and intellectual impairments. All international policy standards. individuals need accessible information about safety, evacuation, handling of explosives, and avoidance Reform medical and rehabilitation services for of landmines. Adapted materials and systems are people with disabilities. Reform of the MSEC needed for persons with different impairments. should be accelerated by adopting the World Laws should be enacted that specify how people Health Organization’s ICF as the basis for disability 124 According to data provided by the State Employment Service, employers claimed reimbursement for creating reasonable adjustments for people with disabilities only 332 times in 2019. 125 Ministry of Infrastructure of Ukraine, “Inclusiveness of Buildings and Structures,” Link. 126 Fight for Right, “Alternative Report on Ukraine’s Implementation of the Convention on the Rights of Persons with Disabilities,” Link. HUMAN IMPACT ASSESSMENT 67 evaluation. Access to timely medical services, and eliminate community-level barriers to rehabilitation, prostheses, and personal assistance deinstitutionalization. Instead of reconstructing devices should be immediate and not contingent on residential care facilities, community-based housing disability status. Housing and workplace services should be considered in accordance with the UN will help to achieve the goals of rehabilitation and Committee on the Rights of Persons with Disabilities’ effective social and labor adaptation for people with Guidelines on Deinstitutionalization, including in disabilities. Emergencies.127 Strengthening capacity at the community level will help meet the needs of people Scale up piloting of community-supported with disabilities exiting institutional care. housing alternatives for people with disabilities Veterans and their Families Summary or younger (35 percent were 31–40 and 31 percent were 19–30).129 This age profile puts a premium on offering able-bodied veterans educational and The number of veterans has increased rapidly employment support for lifetime livelihoods, rather since 2014. The Ministry of Veterans Affairs (MoVA) than long-term social assistance. reports that 908,832 individuals qualified as veterans before February 2022.128 Information on the Ukraine’s legal framework guarantees veterans a number and sociodemographic characteristics of wide array of benefits, including cash transfers, military members is not publicly available, making reduced housing and utility fees, free public it difficult to predict future numbers of veterans transport, and preferences for employment and and their likely needs. Nonetheless, according to education. However, the framework has logistical MoVA, numbers may rise to an estimated 4 million challenges and is becoming increasingly costly as the to 5 million veterans in the future, and the share of number of veterans rises. Some social support tools veterans in Ukrainian society is likely to rise to 10–15 are outdated and ineffective, for example, benefits percent of the population (compared to around 1–2 for the installation of a landline telephone. MoVA was percent of the population before 2022). established in 2018 to coordinate policy making and public program delivery for ex-combatants and their The current legislation for war veterans was not families. designed for active hostilities within the country. War veterans include both active service members The government has launched a project (to run who have the status of combatants, as well as through 2032) for veterans’ transition from military demobilized persons, people with disabilities as a service to civilian life. The transition system will result of the war, and war participants. By law, all include psychological and legal assistance and these groups receive nearly equal social support will support the social, professional, and cultural without regard to the different groups’ needs or adaptation of service members, war veterans, circumstances. This approach is ineffective. veterans’ family members, and family members of fallen soldiers to ensure their smooth social Active fighting within the country poses daunting and economic reintegration. In 2023, the veteran’s challenges for veterans’ demobilization, assistant institute was introduced, a pilot program reintegration, and social and economic support, focusing on the transition from military service to especially given the comparative youth of many civilian life. In 2024, the veteran’s assistant institute veterans. Nonrepresentative surveys conducted will be expanded to the whole of Ukraine.130 among veterans found that two-thirds were ages 40 127 Office of the High Commissioner for Human Rights, “CRPD/C/5: Guidelines on Deinstitutionalization, Including in Emergencies (2022),” September 9, 2022, Link. 128 Unified State Register of War Veterans data. 129 Ukrainian Veterans Foundation, “Portrait of a Veteran: Russian-Ukrainian War 2014–2022,” July–August 2022, Link. 130 Government Portal, “State Budget for 2024: A Maximum of 14 Billion UAH Has Been Transferred to Support Veterans and Their Families,” November 10, 2023, Link. 68 HUMAN IMPACT ASSESSMENT Observed Impacts their disability category. Most veterans receive a small annual cash transfer, which in 2021 ranged Many veterans and their families have suffered from UAH 600 to UAH 4,000 (US$17–111).134 Veterans from displacement and have lost prewar are legally entitled to free public transportation employment and income sources. Veterans have and preferential employment, although veterans identified the following as top priorities: housing report difficulties in obtaining these benefits. In acquisition and repair (63 percent); health care (54 the 2021/2022 academic year, 10,470 veterans and percent); livelihoods (51 percent, comprising 31 approximately 11,000 children of veterans received percent income support and 20 percent employment state support for professional (vocational and assistance); and access to education (25 percent).131 technical) or higher education.135 Massive damage to housing stock, combined with In 2022, the Ukrainian Veterans Foundation (UVF) large-scale displacement, has limited the supply was established as a budgetary institution to of housing, particularly in areas where displaced protect the rights of veterans, promote their people are concentrated. Housing programs for reintegration, and support their entrepreneurship veterans are oriented toward home ownership. They and employment. During 2023, 136 projects are poorly adapted to meet shorter-term needs for became winners within the framework of the UVF’s rental housing, especially for veterans hoping to competitive programs, in total, financial support return to their oblasts of origin. Affordable rental was provided in the amount of over UAH 201 housing, subsidized public housing, and disability- million (US$5.5 million). As part of microfinancing accessible housing are scarce for those with grants (US$555 each), support was provided to 212 financial and accessibility constraints. businesses for a total amount of over UAH 4.1 million (US$115 thousand). The number of veterans who will require state employment and education support is large. As of Veterans must be assessed by the Military Medical mid-2022, 60 percent of those who were veterans Commission (MMC) to ascertain fitness for further before February 2022 were engaged in fighting the military service, and by the civilian MSEC to qualify current war.132 This group, largely of working age, will for disability benefits and services. But navigating swell the ranks of veterans seeking livelihood support these processes is difficult. Over two-thirds (68 and long-term employment when they demobilize. percent) of surveyed veterans cited challenges Furthermore, multiple surveys emphasize that completing the MMC evaluation, such as unclear veterans primarily need education and employment.133 instructions and long waits to see specialized A quarter of respondents (25 percent) prioritize physicians.136 To ease processing, the government access to education and 20 percent to employment has opened MMCs in civilian hospitals, but veterans assistance. Nonetheless, there are not enough have noted difficulties coordinating between military retraining courses or short-term skill courses. and civilian facilities as well as a lack of digitized Alarmingly, 52 percent of the interviewed veterans document management.137 Evaluations are often and service men anticipate losing their previous considered subjective, and information is lacking on qualifications upon demobilization, highlighting the the appeals process. Annual reapplication to MSEC need for further training and skill development. is mandatory even when patently unnecessary (e.g., loss of a limb). One-third of surveyed veterans listed financial support among their priority needs. Disabled Veterans experience problems accessing veterans receive one-time cash transfers of UAH medications, rehabilitation services, and 173,000–990,000 (US$4,806–27,500), depending on prosthetics, which by law they should receive free 131 Ukrainian Veterans Foundation, “Needs of Veterans,” Link. Data reflect research conducted in January–April 2023. 132 Ukrainian Veterans Foundation, “Portrait of a Veteran: Russian-Ukrainian War 2014–2022,” July–August 2022, Link. 133 Ukrainian Veterans Foundation Analytics. “Needs and obstacles of veterans in employment”. Sociological research conducted during June-July 2023, Link. 134 Legal Hundred, “Analysis of the System of Social Protection of Veterans and Military Personnel,” 2022, Link. 135 Ibid. 136 “The Path of the Injured: Needs, Challenges and Future Visions,” Link. The survey was conducted in February–May 2023. 137 Ibid; see also Julia Slabinska, “‘It Can’t Be Called a Reform Yet’: Human Rights Activist Lyubov Galan on What Has Already Changed in the Work of the MPC and MSEC,” June 15, 2023, Link. HUMAN IMPACT ASSESSMENT 69 of charge.138 According to a 2016 survey, 39 percent • Accelerate process reform for veterans’ of respondents faced challenges with access to free medical assessments (MMC and MSEC). medications,139 and the situation has worsened since Planned reforms need to be accelerated to February 2022 with the closing of pharmacies and offer better information, simpler processes, shortages of essential drugs. Veterans also noted digital queuing, digital records management, that the approved list of free drugs does not include one-stop assistance, and better collaboration treatment for post-traumatic stress disorder (PTSD) between military and civilian facilities. Process or post-concussion syndrome, common ailments reengineering and legal enforcement are also among veterans. Ukraine’s 423 rehabilitation needed to improve timely access to guaranteed facilities are also inadequate for the rising number drugs, rehabilitation services, and prostheses. of veterans.140 Rehabilitation capacity is planned Order 402 of the Ministry of Defense needs to to expand to 6,000 beds, though the Ministry of be amended to promote broader diagnoses and Health estimates a need for 7,800 beds.141 Complex a comprehensive and holistic assessment of administrative procedures often prevent veterans veterans’ physical and psychological health. from obtaining prostheses during the treatment and rehabilitation period. To resolve this, the government • Organize information and adapt housing is piloting a program for making prostheses available programs to the needs of today’s veterans. prior to disability certification. A digital clearinghouse should be set up with information on housing needs among veterans and the various housing programs to support Recovery and Reconstruction Needs, them. Programs should support obtaining including Build Back Better housing at prices that are affordable for veterans through mortgage lending, preferential long- • Ensure revision of legislation on social support term state credit, etc. for war veterans. Legislation should focus on demobilized persons with combat experience, • Enhance professional reorientation programs not civilians; should distinguish between active to focus on short-term qualification training and service members and demobilized; and should small business development support. New short target social support to personal needs and courses should respond to current labor market circumstances. demand. Mentoring, coaching, and employment and business start-up support will be needed to • Eliminate untargeted cash transfers in favor complement technical training. of targeted transfers to low-income veterans and those certified as disabled. Cash transfers • Adapt service system to respond to the needs of should target those most in need, whether due veterans. This includes providing counseling and to poverty or disability or both. Training and liaison services to access affordable housing, qualification programs and job matching for skill development, higher education, disability long-term employment of veterans should de- support, medical services, financial and life emphasize cash transfers. planning support, and other public services. 138 The Law on the Status of War Veterans and Guarantees of Their Social Protection, Link. 139 The Legal Hundred, “White paper: analysis of the state support system for veterans and their families in Ukraine”, Annex 1: “Study of the System of Social Protection of Combatants and Family Members of Those Killed in the Anti-terrorist Operation,” 2016, Link. 140 Ustinov, O.V., Ukrainian Medical Journal, Comment by the Minister of Health of Ukraine; see “The Maximum Number of Rehabilitation Cycles in Two or More Areas Has Been Increased,” June 19, 2023, Link. 141 Ukrinform, “Ukraine Needs 7800 Rehabilitation Beds—Ministry of Health,” July 19, 2023, Link 70 HUMAN IMPACT ASSESSMENT Gender Specific Impacts Summary and unemployment on women and their families. A larger share of female-headed households rely on unstable income sources compared to male-headed The war has had profound impacts on women, households (58 percent vs. 45 percent).148 Female- girls, and LGBTIQ+ persons who have been affected headed households are also more likely to rate differently than men and who have specific needs their needs as “Extreme” or “Extreme+” in at least and priorities for recovery. Women account for one sector (41 percent) compared to male-headed more than half of IDPs and for the large majority of households (37 percent).149 people seeking to return to Ukraine. As of October 2023, 56 percent of the 3.7 million estimated IDPs As estimated by the UN Women experts, women were women, and women made up 93 percent of spend over 16 hours per week more than men the 4.6 million people returning to their places of on unpaid domestic work (Figure 25),150 and the habitual residence.142 Out of the 14.6 million people potential cost implications of women’s increased who will need humanitarian assistance in 2024, unpaid childcare work since February 2022 is 56 percent are women and girls.143 In recent years US$72.5 billion.151 While men’s unpaid work has Ukraine has made notable progress toward greater more than doubled since the start of the war and gender equality, but gaps persist. Women earn 18.6 there has been a noticeable increase in fathers’ percent less than men for work of equal value, and participation in childcare,152 women still have the their labor force participation rate is 15.1 percent primary responsibility for domestic and care work. lower than men’s. Lack of employment is especially This has significant implications for their labor pronounced for women ages 25–44.144 Other market participation and income generation. challenges to a gender-responsive national recovery include an increase in women’s unpaid care work, heightened risks of gender-based violence, and a Figure 25. Number of hours spent on unpaid decrease in women’s formal decision-making. domestic work (housekeeping, care for family members) per week Observed Impacts 60 As of April 2023, 72 percent of people registered 50 55 as unemployed were women,145 and of the IDPs 40 employed before the invasion, 45 percent of 39 30 women—as compared to 27 percent of men— 32 20 still did not have a job.146 More women than men 10 15 depend on social assistance, especially among those 0 ages 60–80. In 2023, the total income per capita 2021 2023 in male-headed households was on average 20 women men percent higher than in female-headed households,147 highlighting the impact of increased unpaid care work Source: UN Women Ukraine, 2023 (data from State Statistics of Ukraine and the Human Impact Assessment, 2023). 142 IOM, ”Ukraine—Returns Report—General Population Survey Round 14 (September–October 2023),” November 10, 2023, Link. 143 UN OCHA, “2024 Ukraine Humanitarian Needs and Response Plan,” forthcoming. 144 ILO, “Prospects for Achieving Ukraine’s 2032 GDP Target: A Labour Market Perspective,” September 2023, Link. 145 State Employment Service, April 2023 data. 146 European Training Foundation (ETF), “The Invasion of Ukraine: The Impact, in Numbers,” December 1, 2023, Link. 147 REACH, “Multi-sector Needs Assessment,” 2023, Link. 148 Ibid; see also REACH, “2022 MSNA Gender Focus Snapshot,” February 2023, Link. 149 REACH, “Multi-sector Needs Assessment,” 2023, Link. “Extreme” and “Extreme+” represent the most severe needs. 150 Calculations are based on data from UNDP, “Ukraine: Human Impact Assessment,” June 2023, Link. 151 Calculations are based on 2021 data from the State Statistics Service of Ukraine and on UNDP, “Ukraine: Human Impact Assessment,” June 2023, Link. The calculations are based on the following formula: number of hours of additional unpaid work per week x hourly rate (using compensation rate for foster carers in Ukraine) x number of weeks since the start of the war x number of affected people = potential cost implications due to increase in unpaid work. 152 UNFPA, “The Role of Men in Parenthood During the Full-Scale War,” August 2023, Link. HUMAN IMPACT ASSESSMENT 71 Risks of gender-based violence (GBV), including operate across Ukraine, including shelters, crisis war-related sexual violence (CRSV), human rooms, day centers, counseling services, mobile trafficking, and intimate partner violence, have teams, and hotlines. Staffing of specialized GBV been heightened since February 2022.153 As of 1 services remains an issue; there is a 23 percent February 2024, the UN Human Rights Monitoring deficit in staffing of service managers, psychologists, Mission (HRMMU) documented 220 cases of CRSV social workers, and other administrative and legal (137 men, 77 women, 4 girls, 2 boys)154, and the staff.162 Office of the Prosecutor General of Ukraine recorded 270 cases of CRSV (96 men, 161 women, 12 girls, Women are playing a key role in the humanitarian and 1 boy).155 While complaints of domestic violence response and recovery efforts but are not equally recorded by the National Police initially decreased involved in planning and decision-making. Women in 2022, they rose again in 2023 to 243,980 cases continue to be underrepresented in decision-making by November.156 Reports from local NGOs and positions, including at the highest level; there are international organizations confirm that the invasion 4 women in the 22-member Cabinet, and women exacerbated existing inequality and discrimination of make up only 21 percent of Parliament. Only 1 out of LGBTIQ+ people and caused an increase in homo- 24 regional administrations is headed by a woman,163 and transphobic violence.157 Local civil society and after local elections in 2020, the shares of organizations believe that GBV has increased but is women on regional, city, district, and village councils significantly underreported due to stigma, a culture were between 33 percent and 43 percent, but these of silence, and a lack of services and police capacity numbers have dropped since 2022. Only 9 percent made worse by the war.158 The risk of trafficking is of mayors and only 16–21percent of village heads also rising.159 were women.164 Women’s rights, gender equality, and other social issues are sometimes sidelined as Lack of GBV response services appear to be a result.165 a problem in Ukraine. In 2023, 19 percent of households reported that GBV response services The intersection between gender and factors were not available where they lived; the share was such as age, disability, and displacement status 32 percent in rural areas (compared to 10 percent in heightens vulnerability. Older women and women urban areas).160 Out of the 714 specialized services with disabilities have significantly higher levels for domestic violence survivors that existed before of need than male counterparts and are more February 2022, 67 had ceased to function sometime vulnerable economically.166 For example, households in 2023.161 However, 228 new services have been led by women ages 60 or above make up the largest launched, and 875 specialized GBV services now share of food-insecure households (31 percent).167 153 Regional Gender Task Force, “Making the Invisible Visible: An Evidence-Based Analysis of Gender in the Regional Response to the War in Ukraine,” October 2022, Link. 154 OHCHR, Situation of human rights in Ukraine: 1 August to 30 November 2023, Link 155 Office of the Prosecutor General of Ukraine, Statistics on CRSV cases. Link 156 Complaints numbered 325,599 in 2021; 244,381 in 2022; and 243,980 as of November 28, 2023. See National Police of Ukraine, “The National Police Has 54 Specialized Units for Countering Domestic Violence—Ivan Vyhivskyi,” November 29, 2023, Link. 157 Nash Svit, “The battle for freedom. LGBTQ situation in Ukraine in 2022,” February 2023, Link. 158 Care, “Rapid Gender Analysis Ukraine,” October 2023, Link 159 Christopher H. Smith, “Report on Human Trafficking Issues to the Standing Committee of the 2023 Winter Meeting of the OSCE Parliamentary Assembly,” Vienna, February 23–24, 2023, Link. 160 REACH, “Multi-sector Needs Assessment,” 2023, Link. 161 Ministry of Social Policy data. 162 Estimations are based on Ministry of Social Policy data, November 2023. 163 Official website of the President of Ukraine, December 2023, Link. 164 Electoral Commission of Ukraine, November 2023. Women make up 36 percent of representatives in regional councils, 33 percent in city councils, 43 percent in district councils, and 37 –41 percent in village councils. 165 UNDP, “Ukraine Human Impact Assessment,” 2023; EU4GenderEquality Reform Helpdesk, “Country Gender Profile: Ukraine,” July 2023, Link. 166 REACH, “2022 MSNA Gender Focus Snapshot,” February 2023, Link. 167 World Food Program, “2023 Ukraine Needs Assessment: Food Security and Essential Needs,” June 2023, Link. 72 HUMAN IMPACT ASSESSMENT Recovery and Reconstruction Needs, • Engagement with women as active leaders including Build Back Better and decision-makers in recovery processes at all levels where gender-responsive planning, budgeting, and monitoring tools are applied. To ensure a gender-responsive and -inclusive This involves the use of effective quotas/ approach to building back better in Ukraine, the temporary special measures in elections and following areas should be prioritized in 2024: appointments, systematic consultations with people of all genders, and expansion of leadership • Targeted interventions to expand women’s opportunities for women at hromada, oblast, and access to and inclusion in the labor market and national levels. Improved use of gender targets business. Women should have opportunities and markers is also needed to track financing for to develop required competencies, including gender-responsive recovery. in sectors traditionally occupied by men, and unemployed women should be matched with • Strengthened collection, analysis, and available jobs, partly as a way to attract female dissemination of data on the gender-specific refugees back to Ukraine. Interventions should impacts of the war, especially on the intersection support both short- and long-term economic of gender and groups facing multiple forms of security for women—including female heads of discrimination. Sex-disaggregated data should households, internally displaced women, returnee be collected, analyzed, and used to ensure women, GBV survivors, and women from groups evidence-based decision-making on the needs facing multiple forms of discrimination such and priorities of different groups of women and as Roma women and rural women. Improving men. working conditions, particularly through social dialogue and collective bargaining, will help to increase the attractiveness of the labor market Limitations and Recommendations for to women. Future Assessments of Impacts on • Dedicated initiatives to reduce women’s unpaid Specific Groups care work. Interventions should prioritize reconstructing and opening easily accessible One important cross-cutting priority for childcare facilities, schools (including bomb responding to the needs of specific groups is to shelters for kindergartens), and services for invest in data collection systems to aid recovery. people with disabilities and older people. The highest priorities for improved data availability Advocacy for men’s engagement in unpaid include (i) monitoring and verification of IDP status; childcare and domestic work is important, as are (ii) sex-disaggregated data related to gender employer-based childcare and private  service impacts in the infrastructure, social services, health, provision to expand good-quality, affordable and employment/livelihoods sectors; (iii) socially services.168 disaggregated data on employment and pension provision; (iv) digitized registry of veterans and their • Expanded GBV prevention and response efforts. needs; and (v) data on number and legal status of This includes further development of GBV elderly individuals and people with disabilities living protection mechanisms, such as additional GBV- in residential care facilities. Equally important is related services, strengthened referral pathways, aligning statistical and administrative data collection and gender-sensitive police practices. Special and dissemination with Ukraine’s decentralization attention is needed to ensure GBV prevention reform so that communities have access to socially and response efforts reach IDPs, people living in disaggregated data needed for operational and rural and remote communities, those at risk of strategic planning. trafficking, and veterans. 168 International Labour Organization, “Care Policy Investment Simulator,” 2023, Link. 73 SOCIAL SECTORS Ministry for Restoration, Agency for Restoration. Photo by: Zaporizka region. 74 SOCIAL SECTORS HOUSING Context and donors have prioritized housing recovery and building back better since the onset of the war. The GoU established the Register of Damaged and With over 10 percent of the total housing stock Destroyed Property (RDDP), which mandates the either damaged or destroyed and close to 2 million verification and registration of damaged assets by households affected, housing continues to be one territorial hromadas,173 and allows for monitoring of the most impacted sectors.169 The total damage to the extent, nature, and location of damaged assets the housing stock has increased by 11 percent since and progress on their repair and reconstruction. February 2023. Before February 2022, the housing This damage inventory is managed by the Ministry stock comprised of an estimated 20 million units for Communities, Territories and Infrastructure distributed across multifamily buildings (MFBs), Development (MCTID) and was estimated to include dormitories, and various types of single-family about 60 percent of damaged assets as of December houses (SFHs). MFBs are predominant in urban 2023. The GoU has also launched different areas and cater to nearly 67 percent of the urban programs for affected homeowners including, population. In larger cities, this share increases among others, the eRecovery repair program, to 79 percent. On the other hand, SFHs, including which caters to residential property owners with individual homes, dachas, garden houses, and damaged or destroyed units.174 The GoU, multilateral country houses, and are primarily located in rural organizations, and donors have since 2022 continued areas. The asset typology used in this housing to invest in much-needed energy-efficient restoration sector assessment remains unchanged from the of MFBs and have sought modernization of housing first RDNA. Units in MFBs are divided by age: in one policy, renewal of property rights regulations, group are the Soviet-era apartment buildings (pre- the building regulatory framework, and urban 1991), which are estimated to constitute 88 percent development in a manner that is oriented toward EU of the apartment building stock; and in the other regulations. The interagency Shelter/Non-Food Item group are the more recent (post-1991) multifamily Cluster of the humanitarian coordination system apartments, which are estimated to account for 12 has also developed a Shelter Information Damage percent of the apartment buildings in the country. Assessment and Response Database (SIDAR) and Almost 94 percent of the housing is privately owned,170 is working on its inter-operability with the RDDP and as of 2013, only about 3.4 percent of households system. Yet these advancements cannot keep pace were officially considered renters, although an with the needs, which increased by 16 percent additional 10–15 percent likely rent informally.171 between RDNA2 and RDNA3. To accelerate recovery, Since February 2022, rental rates reportedly have it is necessary to rapidly enhance implementation increased, particularly in the western regions of the and technical capacities at the national level country. 172 and (to a larger extent) at the local level, as well as address persisting sectoral challenges Given the sheer volume of damage to the housing pertaining to ownership, outdated and complex sector and the resulting needs and negative impact regulatory framework, incomplete decentralization. on prolonged displacement, the GoU, including Uncertainties posed by the ongoing war and resulting local authorities, as well as international partners 169 The housing sector concentrated 40 percent of the total damage in RDNA1 and 38 percent in RDNA2. In RDNA 1, 20 percent of the proposed needs focused on housing; the share is 17 percent in RDNA2. 170 Ownership rights are in the process of being systematically included in the State Registry of Rights for Real Estate (eRegistry), which was established in 2015, only after privatization had been largely completed. 171 United Nations Economic Commission for Europe. 2013. Link 172 Datskevych, N.”Rental prices soar in western Ukraine amid influx of refugees.” March 18, 2022. The Kyiv Independent. Link. 173 Ukraine has three levels of constitutionally guaranteed subnational government: (i) oblasts, or regions; (ii) rayons, or districts; and (iii) hromadas, or local self-government units that range from cities to villages and rural hamlets. 174 The eRecovery program provides compensations to owners for undertaking repairs in case the unit is partially damaged and in the case of destroyed units, owners are supported through the provision of housing vouchers, etc. Link. SOCIAL SECTORS 75 macro-fiscal challenges will continue to determine programs that are prioritizing the inspection and the speed of the housing sector recovery. recovery of partially damaged units, starting with those that have minor damage. Damage and Loss Assessment Thus far, the housing sector has incurred an estimated US$17.4 billion in losses (Table 5). As of December 31, 2023, the total cost of damage The loss assessment reflects estimated cost to the housing sector is estimated to be US$55.9 of demolition, debris removal, rental and bank billion (Table 5).175 Of the 11 percent increase in the loss, and costs associated with the provision of cost of damage since February 24, 2023, roughly a emergency housing support and temporary housing. fifth can be attributed to the damage caused by the Rental losses are estimated at US$10.2 billion,178 breakage of the Kakhovka Dam and the subsequent while bank losses related to mortgages linked to flooding (primarily in the Khersonska oblast).176 Units destroyed assets are estimated at US$1.2 billion. in MFBs continue to represent the largest share of The total estimated cost of demolition and removal both damaged units and damage costs, both at 86 of debris is a notable US$5.6 billion. Critical housing percent. An estimated 220,315 SFHs have been support—including emergency shelters, operation damaged as well, and account for around 10 percent and maintenance of collective centers, and basic of the total affected assets. The number of damaged housing refurbishment for winterization during dormitory units stands at 67,206 as of the end of 2023. the previous 22 month— amounts to an estimated Concerning geographic distribution, over 75 percent US$104 million. In addition, the GoU, together with of the damage cost is concentrated in four oblasts: donors, has provided homeowners and utilities Donetska (30 percent), Kharkivska (27 percent), with around US$141 million as compensation for Luhanska (12 percent), and Kyivska (8 percent); an temporary housing and basic service delivery for additional 18 percent is estimated in Mykolaivska (4 internally displaced persons (IDPs). percent), Chernihivska (4 percent), Khersonska (4 percent), Zaporizka (3 percent), and Dnipropetrovska Human impact. The scale of damage in this sector (3 percent). Over one-fourth of the damaged units is exacerbating the already existing shortage of are destroyed (547,010 units), and the other three- adequate, affordable, and safe housing in Ukraine— fourths are partially damaged.177. Of these, 880,528 an especially severe challenge for IDPs. As compared units have minor damage (damage of up to 10 to 13 percent nationally, 28 percent of households percent), and 679,382 units have medium damage residing in the Southeast macro region, reported (damage of 10–40 percent). The impacted units their accommodation was directly affected by the reported across all three damage levels (destroyed, war; more damage was reported by households in minor damage, medium damage) have increased urban areas compared to rural areas.179 Affected since the previous assessment (RDNA2), but there households were likely to have sold or lost durable has been a notable 200 percent increase in the goods due to displacement, destruction, or looting. A units that sustained minor damage. This significant survey report by the International Organization for increase in units with minor damage can likely be Migration indicated that 47 percent of IDPs owned explained by the GoU’s gradual adoption of more a house or apartment unit that was damaged or rigorous data collection methods and processes, destroyed; that 31 percent faced a shortage of together with the implementation of housing repair adequate accommodation in their current location; 175 This is likely an underestimation given the lack of access to damage data in the frontline oblasts and areas temporarily not under GoU control. 176 European Union, KSE Institute, Vox Ukraine, UNDP, et al., “Analysis of the Impact of the Kakhovka Hydroelectric Power Station Explosion on the Populated Areas of Kherson and Mykolaiv Regions,” 2023, Link. 177 Damaged assets were categorized into three damage levels in agreement with the MCTID: damage below 10 percent (considered minor damage), damage between 10 percent and 40 percent (considered medium or moderate damage), and damage above 40 percent (considered destroyed). All units that had damage of 40 percent or less are considered partially damaged and repairable in the short to medium term. 178 Due to the prevalence of informality in the rental market, lack of verified data and access to reliable rental market data, estimations may not provide a clear indication of associated nuances and costs. Rental losses have been estimated accounting for the following variables (i) Average rent per month reported by the GoU that has been adjusted to reflect other sources (ii) Rental market share-assumed at 13 percent and (ii) Estimated number of IDP and registered households for the 22 months of the war and the following 18 months. 179 UNDP, et al. “Human Impact Assessment,” June 2023, Link. 76 SOCIAL SECTORS and that elderly IDPs struggled to find housing.180 stage. According to the GoU data, in 2023, US$ Displaced households belonging to lower-and 1 billion was disbursed toward housing sector middle-income groups, along with the IDPs who have recovery and included both, disbursements verified been twice displaced, are particularly vulnerable; by the Ministry of Finance as well as that reported their limited financial resources and limited access by line Ministries. These were channeled through to documentation can prevent them from repairing the state or municipal budgets or by loans and their own homes, seeking adequate temporary grants provided by donors and international finance housing, or accessing monetary support programs. institutions, with most being dedicated to the repair Although the number of IDPs has been gradually and reconstruction of damaged assets, and overall declining over the past months, as of December representing about 52 percent of the sectoral 2023 there were over 3,522,045 registered IDPs in priority needs identified in RDNA2. Although, Ukraine.181 according to preliminary estimation based on data provided by regional state administrations, at least 2,601 MFBs and 10,017 SFHs are reported, by the Recovery and Reconstruction Needs, GoU to have been repaired by the end of 2023, it including Build Back Better appears that the method for tracking recovered assets is not uniformly employed across regions and The needs for the housing sector are estimated hromadas. In addition, there is a considerable lag at US$80.3 billion across the long term (2024– between the disbursement of funds and completion 2033) (Table 6). Of the long-term total, US$72.1 of works. For example, in 2023, 29,600 households billion is for repair and reconstruction of housing were provided compensation for the repair of their assets under the build back better approach. MFBs, partially damaged buildings, but the completion of which sustained 86 percent of the overall damage, repairs is yet to be verified by the local authorities were mostly built during the Soviet period and had and could take up to 12 months after the receipt of exceeded their design lifespan; they are also energy compensation.182 inefficient and suffer from deferred maintenance and repairs. Thus, the restoration needs for MFBs will entail improvements such as climate- and disaster- 2024 Recovery and Reconstruction proofing, as well as compliance with Eurocodes, EU Priorities laws, and specifically priorities like energy efficiency and inclusion. But the restoration of housing assets Recovery and reconstruction investment priorities also entails a host of other vital activities, including for 2024 in the housing sector are estimated at debris removal and demolition, inspections, technical US$2.1 billion (Table 7). In line with the phased designs and studies, and complex implementation approach for housing recovery, the estimate processes and associated capacity, all of which are emphasizes the need to focus on rapid light and also accounted for in the total needs. In the first four medium repairs in the short term as the fastest way years of the sector recovery, the primary focus is on to increase adequate housing in the housing market, rapid repairs and recovery of the partially damaged thus encouraging safe shelter for all, including IDPs assets, supporting owners with destroyed housing, and the need to support households with destroyed provision of temporary housing and emergency housing. Current and major repairs of MFBs and support, and planning, organization, and coordination SFHs are expected to cost around US$500 million between national and local levels for ensuing phases in 2024. Costs related to provision of emergency of the recovery. Critical preparatory activities, housing support and temporary housing account for necessary policies and plans, and adequate capacity US$248 million. Demolition and debris removal is and implementation arrangements needs to be in estimated at US$119 million and is vital for initiating place for the ongoing and subsequent large-scale substantial and large-scale works in the housing repair and recovery works. sector. The proposed priority needs also assign a notable US$68 million for technical inspections that Although significant funding is being directed ascertain habitability of housing units and for the toward the housing sector recovery, it is not preparation of studies and project documentation; possible to gauge the overall needs met at this these pave the way for actual repairs of MFBs in 180 IOM, “DTM Ukraine—Internal Displacement Report—General Population Survey Round 14 (September–October 2023),” November 6, 2023, Link. 181 IOM, “DTM Ukraine—Area Baseline Assessment (Raion Level)—Round 31 (December 2023),” January 16, 2024, Link. 182 Data reported by the GoU. SOCIAL SECTORS 77 the subsequent years and create a viable project Limitations and Recommendations for Future Assessments pipeline. Organizational arrangements and design of policies and strategies are expected to cost US$11 million and would lay a solid foundation for faster and more efficient housing sector recovery Access to reliable data continues to be a key in coming years. Components within this category challenge for accurately assessing the level could include, among others, training and staffing of damage in the housing sector. The war itself of relevant personnel at the local level, updating severely hampers access to reliable and detailed of spatial plans, procurement of software and information, making it increasingly challenging hardware, and design and implementation of sound to accurately assess the impacts and associated monitoring and reporting systems. Investing in costs for rebuilding. This is particularly true in capacity and in policy and regulatory improvements territories that are not under GoU control. Moreover, at the outset would mitigate implementation risks at costing data linked to the needs estimations as well later stages. as the data required to make valid assumptions increasingly lack reliability and validity as the war The extensive recovery needs in the sector, continues. This makes it more difficult to correctly coupled with the limited resources necessitates assess the impacts and needs in the sector. a comprehensive sector reform and development of a housing strategy and associated operational Changes in data collection methods and tools and action plans, right at the outset. These would prevent meaningful comparisons of results allow for adopting a programmatic approach, to over time. It is important to acknowledge that the determine investments over time, that is based on a government has made efforts to improve data shared vision for housing recovery and prioritization collection tools and mechanisms since the beginning criteria. Without an agreed strategy, a multitude of the war; its introduction of the Register of Damaged of ad hoc solutions that lack coordination may be and Destroyed Property is a notable example. pursued. To this end, the GoU is in the process of However, because data collection processes are now adopting the “Basic Principles of Housing Policy different from those used in previous assessments, law”, (currently in draft) in 2024. Such a vital yet direct comparisons become difficult. For instance, enormous undertaking would require keen attention although RDNA3 provides a cumulative assessment, at elevating not only organizational arrangements it found slight reductions in damage in few regions. and capacity at all levels of the government, but also, at developing robust institutional and regulatory Moving forward, it would be worthwhile to design processes, plans and strategies. At present, for 2024, and implement a methodology for systematically funding commitments (which are at various stages and uniformly tracking recovered assets and of approval) to meeting housing needs are mostly various categories of needs met, as well as the dedicated to current and major repairs of MFBs and associated projects and sources of funding. various compensation programs. Items related to Such a system would allow for improved needs organizational arrangements and technical studies determination and targeted identification of specific are less salient, but they remain critical determinants housing sector needs across regions. In addition, of the sector’s absorption capacity and the success given that the war is ongoing, tracking of recovered of the overall reform agenda. assets and needs met could also potentially show if a repaired asset had been subject to further damage. 78 SOCIAL SECTORS Table 5. Damage, loss, and needs by oblast (US$ million) Oblast Damage Loss Needs Cherkaska 82.9 25.6 143.7 Chernihivska 2,121.4 499.3 2,916.3 Chernivetska 0.0 6.9 19.5 Dnipropetrovska 1,471.1 553.6 2,039.6 Donetska 16,937.8 4,464.4 25,032.6 Ivano-Frankivska 0.1 8.9 29.6 Kharkivska 15,120.0 3915.7 21,176.1 Khersonska 2,357.7 1024.9 3,273.2 Khmelnytska 30.1 12.3 54.7 Kirovohradska 10.7 13.9 36.9 Kyiv (City) 957.5 1,306.6 1,285.0 Kyivska 4,708.1 1,426.3 6,829.1 Luhanska 6,782.5 1,509.6 9,888.5 Lvivska 41.7 15.2 103.6 Mykolaivska 2,063.0 803.8 2,829.0 Odeska 276.3 214.9 415.1 Poltavska 97.9 18.3 163.8 Rivnenska 6.1 6.6 21.1 Sumska 752.8 375.1 1,038.1 Ternopilska 9.1 6.7 31.4 Vinnytska 80.0 21.0 138.0 Volynska 0.1 11.4 13.0 Zakarpatska 3.4 8.8 35.9 Zaporizka 1,723.4 990.9 2,342.5 Zhytomyrska 312.7 175.5 435.3 Total 55,946.3 17,416.2 80,291.5 Source: Assessment team. Note: Damage covers 22 months of war between February 24, 2022, and December 31, 2023; loss covers a total of 40 months, which includes 22 months between February 24, 2022, and December 31, 2023, and an additional 18 months through June 30, 2025; total estimated needs cover the period 2024–2033. SOCIAL SECTORS 79 Table 6. Total recovery and reconstruction needs (US$ million) as of December 31, 2023 Category Component Total needs (2024–2033) Repair and reconstruction 72,119.7 Reconstruction Demolition and debris removal 5,676.1 needs Technical inspections, designs, documentation, and studies 1,685.5 Organizational arrangements 37.5 Service delivery Regulatory and technical processes, plans, and strategies 12.5 restoration needs Provision for temporary housing and emergency support 760.1 Total 80,291.5 Source: Assessment team. Table 7. Estimated 2024 recovery and reconstruction priorities (US$ million) Types of priority activities/investments Estimated cost Repair and reconstruction through owner-driven mechanisms, including compensation, 869.0 vouchers, etc. Repair and reconstruction through current and major repairs of multifamily buildings and 499.9 single-family houses through cluster approach Improving access to housing through housing finance mechanisms 297.0 Demolition and debris removal 119.0 Design and documentation 68.4 Organizational arrangements 11.3 Regulatory and technical processes, plans, and strategies 3.1 Provision of temporary housing and emergency support to IDPs 248.4 Total 2,116.1 Source: Assessment team based on priorities defined by line ministries. 80 SOCIAL SECTORS EDUCATION AND SCIENCE Context research ecosystem, a step that provides greater collaboration opportunities for Ukrainian scientists and facilitates exchanges of knowledge, but also will The war continues to pose challenges to the help steer a smooth transition towards a digital and education sector’s performance, primarily sustainable economy and society. affecting in-person education and learning outcomes. Before February 2022, Ukraine’s education sector fared comparatively well, with high Damage and Loss Assessment enrollments at all levels and student performance above expectations for its level of development. Between February 2022 and December 31, 2023, Since 2014, the GoU has followed a comprehensive 13 percent of the education infrastructure was reform agenda driven by the New Ukrainian School, damaged or destroyed by the war, representing aimed at tackling disparities in learning outcomes an estimated damage of US$5.6 billion (Table 8). and improving the effectiveness of the education The 13 percent share includes damage to 3,583 and science systems. However, since February 2022, educational institutions and destruction of 394. providing in-person education has been extremely While schools account for most of the damage, challenging, and opportunities to learn—at all levels, with 1,888 institutions affected, tertiary and from preschool to higher education—have been research institutions face higher damage rates, affected. Since educational institutions can resume with respectively 21 percent183 and 31 percent of the regular operations only if equipped with bomb total number of institutions damaged or destroyed. shelters capable of accommodating students and Moreover, although damaged educational institutions staff during air alarms, large shares of students still generally continue to operate online, the destruction rely on online learning. Moreover, displacement of of preschools often leads to the discontinuation populations within and outside of Ukraine continues of early childhood services, increasing pressure to disrupt the education process and to create on caregivers and limiting their labor market education staff shortages. participation. The destruction of educational assets is concentrated in eastern and southern oblasts: Faced with the growing impact of the war, between 35 percent and 69 percent of all educational the authorities and partners are prioritizing institutions in Donetska, Kharkivska, Khersonska, reconstruction and restoration of access to in- and Luhanska oblasts have been either damaged or person education. As the impact on the education destroyed. These estimates do not account for the and science sectors increases, students and destruction of educational equipment (i.e., school scientists miss opportunities to learn, research, furniture, textbooks, computers, etc.), suggesting and innovate. Despite continued investments in that the actual cost of damage is likely higher. education in 2023, the total needs increased by 30 percent between RDNA2 and RDNA3. Moreover, The invasion is causing economic, learning, and damage to education infrastructure increased by 26 research losses in the sector, which are estimated percent over the same period. Nevertheless, local to be US$6.9 billion (Table 8). The combination of governments are actively reconstructing schools, online learning, stress, and trauma is leading to preschools, and other educational facilities. Since substantial learning losses for Ukrainian students. January 2023, the share of educational institutions Comparing PISA 2022 and PISA 2018 results shows a with shelters has increased from 68 percent to clear deterioration in the proficiency of 15-year-olds 80 percent, while the share of schools offering in mathematics, reading, and science, equivalent fully in-person education has increased from 25 to two years of schooling.184 The accumulation of percent to 57 percent. The Ukrainian science sector learning losses since February 2022 amounts to is also progressively integrating into the European US$5.5 billion. Still, this figure will grow over the 183 This figure covers vocational education and training institutions, professional pre-higher education institutions, and higher education institutions. 184 Ukrainian Center for Educational Quality Assessment, “National Report on the PISA 2022 Results.” Link. SOCIAL SECTORS 81 working life of today’s students, negatively impacting shelters and interim measures to provide access to their income potential and leading to additional in-person education (such as school transportation billions in losses beyond the RDNA time frame. and digital learning centers). In addition, flexible The war has also led to research capacity losses, catch-up programs and psychosocial support are characterized by smaller investments in research necessary to mitigate learning losses and to ensure and a decline in the number of publications from that students have the tools to recover from missed Ukrainian scientists, which hint at the difficulties instruction and trauma. Finally, authorities must faced by the science sector in the current context. prioritize the provision of high-quality education and Finally, losses include items such as reduced the resumption of prewar reforms at all education private sector turnover, decreased tuition collection, levels, from preschool to university, to build back additional costs for education institutions that are better in the education sector and respond to the used as IDP shelters or community centers, and needs of the postwar economy. It is important to additional expenses for demolition and debris note that these estimates assume that the situation removal of damaged education facilities. does not deteriorate further. Human impact. The impacts in this sector are Different levels of government and various disproportionately affecting girls, students from partners are supporting students and teachers in the poorest families, and those living in rural areas. the most affected areas, but the needs far exceed While important disparities were present before what is being supported. The highest needs are February 2022, the war has heightened inequalities recorded in Donetska, Kharkivska, and Khersonska between students, as demonstrated by PISA 2022 oblasts, where the rate of destruction has been high, results.185 Girls’ scores in reading have declined and where many children have been studying online more rapidly than boys’, and students with lower since 2020. Accordingly, partners are supporting socioeconomic status were found to be significantly students and teachers from these areas and less likely to attain basic mathematics proficiency providing them with educational materials, mental than their peers. Moreover, the rural-urban gap health support, and opportunities for catch-up across subjects has substantially widened—it learning. Meanwhile, the Ministry of Education and amounts now to more than four years and a half Science (MoES) is guiding the overall recovery of of learning (92 PISA points on average), indicating the education sector and providing financial support entrenched inequalities between cities and rural to local governments for meeting essential needs, areas. This uneven accumulation of learning losses such as the establishment of bomb shelters and the since 2020 is putting Ukraine’s reconstruction in purchase of school buses. Finally, local authorities jeopardy, as human capital is expected to be a key are key drivers of the recovery process. However, driver of the country’s recovery. the needs of the education and science systems exceed by far what is currently being supported. Recovery and Reconstruction Needs, including Build Back Better 2024 Recovery and Reconstruction Priorities The needs related to infrastructure reconstruction and restoration of high-quality in-person The total recovery and reconstruction investment education are estimated at US$13.9 billion for the priorities for 2024 are estimated at US$1.2 billion period 2024–2033 (Table 9). The reconstruction of (Table 10). These priorities reflect the continued educational institutions is expected to cost US$9.8 importance of providing access to in-person billion over 10 years. This process must comply education to mitigate learning losses and improve with the latest safety, green, and quality standards the quality of instruction. Four priorities have been established by the GoU, including innovative identified for 2024, to be implemented jointly by the approaches to teaching and learning, while also MoES, local governments, and partners: reflecting demographic patterns to ensure the sustainability of the education network. Meanwhile, • Reconstructing damaged education assets, in the costs of restoring education service delivery line with demographic projections are estimated at US$4.1 billion. A large share of • Providing access to education, with the needs is dedicated to the construction of bomb construction and rehabilitation of bomb shelters, 185 Ibid. 82 SOCIAL SECTORS the organization of school transportation, and the further support is urgently needed to ensure the provision of online learning return to in-person classes and limit the long-term • Ensuring the provision of high-quality education impact of the war on education and science. and the continuation of the reforms across education levels, including investments for the rollout of the New Ukrainian School Limitations and Recommendations for • Tackling the accumulation of learning losses Future Assessments and trauma, especially for vulnerable children, through the organization of catch-up classes and This assessment was conducted with available data mental health support services from the MoES, the Kyiv School of Economics, and partners, but further analysis is needed. By relying Combining both humanitarian activities and on a variety of data sources, this assessment offers reconstruction efforts in 2024 is essential to the a comprehensive view of the state of the education resilience of the Ukrainian education system. and science sectors after close to two years of war. Education has a critical role to play in the wider Future assessments could include the following: reconstruction efforts, from building social cohesion to facilitating economic recovery and putting • Assessment of the impact of the war on early Ukraine onto an accelerated development path. childhood development and caregivers’ labor Thus, even when integrated into a humanitarian market integration, with recommendations to response, education policy should from the onset build back better the current preschool system not only address immediate needs but also adopt and provide alternative forms of early childhood a developmental perspective to effectively reverse education and care the long-term impact of the war. By supporting • Analysis of the network of education infrastructure education, Ukraine invests in the well-being and to collect data on reconstruction initiatives and development of its future generations, equipping identify the needs for priority reconstruction and them with the knowledge, skills, and nurturing optimization, considering access to education environments they need to rebuild from the war. and demographic trends Therefore, the 2024 investment priorities not only • Analysis of the labor market needs at the oblast aim to mitigate the immediate impact of the war level, in cooperation with social partners, to but also contribute to the long-term resilience and modernize the curriculum of selected vocational prosperity of the country. and higher education specialties and identify avenues for adult education and recognition of A total of US$280.3 million has been committed in qualifications the 2024 state budget to address these priorities. • Comprehensive assessment of the science Municipalities have also dedicated important system during the war, including losses in resources to address these challenges, reflecting research capacity, and potential for postwar the decentralized nature of the education system recovery and smart specialization to rebuild a and the continued relevance of investing in students, more resilient innovation ecosystem teachers, and researchers. Moreover, continued • Assessment of the long-term impacts of partnerships with international organizations, donor displacement outside of Ukraine on human capital, countries, and civil society groups are essential demography, and growth, and identification of for mobilizing resources, sharing expertise, and strategies to promote brain circulation. implementing effective interventions. However, SOCIAL SECTORS 83 Table 8. Damage, loss, and needs by oblast (US$ million) Oblast Damage Loss Needs Cherkaska 9.6 178.1 87.5 Chernihivska 175.1 153.0 455.6 Chernivetska 0 162.9 69.0 Dnipropetrovska 417.3 493.6 1,101.9 Donetska 1,243.5 355.0 2,455.5 Ivano-Frankivska 0 234.7 55.4 Kharkivska 992.6 435.6 2,224.6 Khersonska 501.8 194.2 1,109.4 Khmelnytska 117.5 208.8 274.6 Kirovohradska 22.9 148.2 124.4 Kyiv (City) 202.8 763.0 524.1 Kyivska 280.2 405.6 592.2 Luhanska 343.3 107.4 790.0 Lvivska 24.2 413.2 193.3 Mykolaivska 361.6 200.3 881.1 Odeska 136.3 448.0 407.3 Poltavska 27.2 201.5 163.0 Rivnenska 2.3 241.3 85.3 Sumska 212.8 160.2 577.8 Ternopilska 3.4 165.9 62.7 Vinnytska 8.5 236.7 204.8 Volynska 0 211.4 70.6 Zakarpatska 0 242.8 55.4 Zaporizka 306.9 262.9 834.2 Zhytomyrska 167.9 206.5 407.1 Nationwide (no specific region) 0 37.0 116.9 Total 5,557.8 6,867.8 13,923.9 Source: Assessment team. Note: Damage covers 22 months of war between February 24, 2022, and December 31, 2023; loss covers a total of 40 months, which includes 22 months between February 24, 2022, and December 31, 2023, and an additional 18 months through June 30, 2025; total estimated needs cover the period 2024–2033. 84 SOCIAL SECTORS Table 9. Total recovery and reconstruction needs (US$ million) as of December 31, 2023 Category Types of activities/investments Total needs (2024–2033) Preschool education 1,441.4 School education 4,597.0 Extracurricular education 456.5 Vocational education and training 1,146.8 Professional pre-higher education 448.2 Reconstruction needs Higher education 641.5 Specialized education 48.2 Special education 70.1 Adult education 10.8 Research infrastructure 910.0 Total reconstruction 9,770.5 Ensuring safe access to education for all 2,377.8 Service delivery Tackling learning losses and trauma 579.9 restoration needs Providing high-quality education at all levels 1,195.7 Total service delivery restoration 4,153.4 Total 13,923.9 Source: Assessment team. Table 10. Estimated 2024 recovery and reconstruction priorities (US$ million) Types of priority activities/investments Estimated cost Reconstructing damaged education assets 112.0 Providing access to education 722.0 Ensuring high-quality education across education levels 309.5 Tackling learning losses and trauma 49.5 Total 1,192.9 Source: Assessment team based on priorities defined by line ministry. SOCIAL SECTORS 85 HEALTH Context applying systems thinking in both the human and infrastructural capacity, the invasion will continue to have serious negative consequences for the health Since February 2022, the health sector in Ukraine and well-being of the country. has experienced war-related disruption and damage to infrastructure and service delivery. The number of damaged or destroyed health care Damage and Loss Assessment facilities, and pharmacies, has increased by 27.0 percent and 32.0 percent, respectively, compared to The war has caused approximately US$1.4 billion the RDNA2 (dated February 2023),186 while losses in in damage to the health sector in Ukraine (Table the health sector have increased by approximately 11). According to the data provided by the Ministry 8.3 percent. The collapse of the Kakhovka Dam of Health, there were 9,925 public facilities in the in June 2023 had very substantial impacts on the health sector prewar. Of those, 1,242 (12.5 percent health sector, disrupting delivery of essential health of all facilities) had been partially or fully damaged care and public health services.187 Compared to as of the current assessment. Compared to RDNA2, RDNA2, the estimated recovery and reconstruction the number of damaged facilities increased by 27.0 needs have decreased by 13.5 percent for the next percent. The largest share of damage in terms of 10 years, however, immediate reconstruction and number of affected assets is recorded in primary service delivery restoration needs for the year health care (PHC) centers (51.9 percent) and remain high. Over the last year, GoU has continued hospitals (26.2 percent), while the largest share of its efforts to sustain the most essential and critical damage in terms of cost is observed in Donetska health services, which are desperately needed (33.9 percent), Kharkivska (18.2 percent), and by the population. There has been a significant Luhanska (15.6 percent) oblasts, where the level of shift in the demand for health services in order to war intensity is severe. Additionally, there were also addressing the mental and physical traumas of the 787 pharmacies damaged or destroyed. Recent data war. GoU has remained committed to the ongoing were not available for ambulances, so the current health sector reform (begun in 2017), with the aim analysis assumes the same damage as in the RDNA2. of improving health outcomes, system efficiency, and the financial protection of the population. The The losses in this sector are estimated to be reforms established the National Health Service of US$17.8 billion. This figure includes the removal Ukraine (NHSU) as strategic purchaser of services of debris, demolition of the destroyed facilities, from the public and private sectors; they have also losses from the financing of facilities, and additional sought to define health entitlements in the Program losses to the population’s health due to forgone of Medical Guarantees (PMG), consolidate financing care and increased public health threats (Table sources, digitalize medical records, and introduce 1). Assumptions for the removal of debris and output-based financing. Given the currently limited demolition of buildings remain the same as in capacity of the country, however, there is a pressing RDNA1 and RDNA2.188 The RDNA3 includes losses need to be addressed with external assistance associated with the needed strengthening of the core to close capacity gaps. The reforms provide a essential public health functions to address country foundation for enhanced access to high-quality care preparedness and response capacities to manage and to service delivery that is more transparent public health emergencies. As in the previous RDNAs, and accountable. But without additional recovery the losses in population health were estimated using efforts, interventions, and prioritized investments, disability-adjusted life years (DALYs) attributable to 186 World Bank, “Ukraine Rapid Damage and Needs Assessment: February 2022–February 2023,” Link. 187 For the impact of the dam collapse on the health system, see Government of Ukraine and United Nations, “Post-disaster Needs Assessment: 2023 Kakhovka Dam Disaster, Ukraine,” 2023, Link. 188 For destroyed assets, 14.1 percent of the full cost is added for demolition, and 1.875 percent of the cost is added for the removal of debris. For partially damaged assets, 1.25 percent of the cost is added for debris removal, with the understanding that there will be no cost associated with demolition. 86 SOCIAL SECTORS select conditions relevant to the ongoing war, such able to serve up to 300,000 individuals; or in specific as increased communicable diseases, neonatal situations it may be redesigned as a specialized and maternal mortality, and mental health issues.189 hospital with the capacity to serve up to 750,000 The RDNA3 estimated a loss of US$14.3 billion in individuals. Similarly, the rebuilding of PHC centers DALYs for the 22 months since February 2022 and with enhanced functionality, also known as PHC+, additional 18 months following. This is an increase involves transforming them into comprehensive of 8.3 percent compared to RDNA2, reflecting the PHC centers.193 These upgraded centers offer increasing disability and loss of life due to the war. not only multidisciplinary care but also extended diagnostic capabilities and emergency services. The human impact of the war on the population’s For the restoration of service delivery, an estimated health and well-being is accounted for in this US$6 billion is needed. This includes adaptation assessment. The war has impacted the provision of PHC, which is critical for addressing changes in of and access to healthcare because of added health care needs, the movement of populations, pressure on facilities and staff, and limited economic and the disruption of health services caused by the resources driven by inflation, further compounded COVID-19 pandemic. The consequences of damage, with losses of livelihoods.190 Before February 2022, internal displacement, and continued insecurity the state of the populations’ mental health was also mean that essential preventive care services already a concern in Ukraine. The lasting war, may be foregone. World Bank–financed projects internal displacement, and uncertainty about for the are providing resources to support recovery and future all add barriers to accessing already limited reconstruction and to improve the population’s mental health care for both adults and children.191 In utilization of care. addition, Ministry of Health (MoH) data suggest that there has been a decline in access to high-quality sexual and reproductive health services for girls 2024 Recovery and Reconstruction and women since the war started.192 There is a need Priorities for a comprehensive strategy to provide the health- related support and services that are needed by the The urgent and implementable needs for 2024 are population. estimated to be US$872.6 million (Table 13). The immediate priorities include strengthening of PHC as the foundation for people-centered services, along Recovery and Reconstruction Needs, with smaller-scale repairs to restore health facilities’ including Build Back Better functionality. These investments aim to expedite the renovation of damaged facilities, reconstruct The total recovery and reconstruction needs outdated facilities to better support rehabilitation and are estimated to be US$14.2 billion over 10 mental health services, and upgrade infrastructure years (Table 11 and Table 12). The estimates of of critical importance to the overall health system. needs for reconstruction of health facilities are The allocated funds also support preparatory work based on improved designs and service delivery and planning investments for major reconstruction models (under the build back better framework) and construction projects; increased financing for and were adjusted to reflect the MoH’s updated mental health services, particularly for veterans and estimates of destroyed and damaged health survivors of gender-based violence; and expansion facilities. An estimated US$8.2 billion is required of rehabilitation services, assistive technologies, for reconstruction and refurbishment of damaged and initiatives addressing missed screenings for health facilities to address increased health needs noncommunicable diseases. Priority needs also resulting from the war. A general profile hospital include the monitoring and follow-up of individuals may be reconstructed as a more efficient facility with chronic conditions, along with scale-up of both 189 DALYs assess overall disease burden, expressed as the number of years lost due to mortality and morbidity. One DALY represents the loss of the equivalent of one year of full health. 190 UN Human Impact Assessment. June 2023. Link. 191 Violetta Seleznova et al., “The Battle for Mental Well-Being in Ukraine: Mental Health Crisis and Economic Aspects of Mental Health Services in Wartime,” International Journal of Mental Health Systems 17, article 28 (2023), Link. See also Elvevåg, Brita, and Lynn E. DeLisi. “The Mental Health Consequences on Children of the War in Ukraine: A Commentary.” Psychiatry Research 317 (November 1, 2022): 114798. Link. 192 Internal analysis by United Nations Population Fund (UNFPA) of the 2022 sexual and reproductive health statistics from the MoH. 193 World Bank, “Reshaping Ukraine’s Health Service Delivery,” 2023, Link. SOCIAL SECTORS 87 child and adult vaccinations. Given the public health in the Damage Registry has improved over time. risks faced during this period and the needs for In RDNA3, the methodological approach has been application of the International Health Regulations calibrated for data analysis and allows more (IHR, 2005) requirements and EU health security precise figures on the total damage costs. From this frameworks, investments were considered to perspective, RDNA 2 appears to have overestimated emphasize multi-hazard surveillance, preparedness, the total damaged area and the total damage cost. In and response mechanisms. any future assessment, data may need to be further triangulated at the facility level by other sources, such as the national e-Health system and Health Limitations and Recommendations for Resources and Services Availability Monitoring Future Assessments System (HeRAMS).194 The recovery planning further needs estimates for the public health services to The availability of reliable data continues to be address the International Health Regulation Joint limited. The data underlying this analysis come from External Evaluation recommendations (2021), the Damage Registry maintained by the Ministry considering implications of the war. A detailed costed of Health, which is the most comprehensive data National Action Plan for Health Security needs to be source available. The quality of the data contained elaborated to facilitate the process in the future. Table 11. Damage, loss, and needs by oblast (US$ million) Oblast Damage Loss Needs Cherkaska 1.9 503.0 386.6 Chernihivska 109.6 481.6 355.2 Chernivetska - 333.5 296.3 Dnipropetrovska 15.1 1,161.0 1,034.8 Donetska 484.9 1,919.4 1,511.3 Ivano-Frankivska - 506.2 449.6 Kharkivska 260.9 1,109.0 950.9 Khersonska 88.3 385.0 362.3 Khmelnytska 1.2 460.2 409.0 Kirovohradska - 383.5 300.4 Kyiv (City) 34.2 1,811.2 993.7 Kyivska 34.6 859.3 609.3 Luhanska 222.1 994.7 773.3 Lvivska - 928.0 824.4 Mykolaivska 54.5 414.9 381.1 Odeska 3.5 1,039.7 783.5 Poltavska 0.3 580.1 449.7 Rivnenska 1.5 427.8 380.3 Sumska 19.3 523.0 350.8 Ternopilska - 382.6 339.9 Vinnytska 4.5 565.6 503.5 Volynska - 382.6 339.8 Zakarpatska - 466.1 414.1 194 World Health Organization, “Health Resources and Services Availability Monitoring System (HeRAMS),” Link. 88 SOCIAL SECTORS Oblast Damage Loss Needs Zaporizka 57.4 708.3 563.8 Zhytomyrska 7.3 442.2 394.5 Nationwide (no specific region) 30.3 69.1 10.1 Total 1,431.3 17,837.3 14,168.1 Source: Assessment team. Note: - = not assessed. Damage covers 22 months of war between February 24, 2022, and December 31, 2023; loss covers a total of 40 months, which includes 22 months between February 24, 2022, and December 31, 2023, and an additional 18 months through June 30, 2025; needs cover the period 2024–2033.  Table 12. Total recovery and reconstruction needs (US$ million) as of December 31, 2023 Category Component Total needs (2024–2033) Demolition cost and debris removal 163.5 Construction of new secondary care facilities 3,714.9 Construction of new secondary care facilities—centers of 1,848.3 excellence Reconstruction of damaged secondary facilities 174.6 Refurbishment and equipping of ambulance stations 7.4 Construction of new primary care facilities 158.7 Reconstruction of damaged primary care facilities 17.2 Reconstruction Construction of new rehabilitation centers 495.0 needs Reconstruction of rehabilitation centers 848.1 Mental health centers 642.3 Rebuilding of dental clinics 2.2 Reconstruction of dental clinics 2.6 Rebuilding of pharmacies 13.9 Reconstruction of pharmacies 0.4 Replacement of destroyed and damaged ambulances 46.8 Rebuilding and reconstruction of other institutions 45.9 Additional primary health care services and medicines 3,968.8 Health emergency preparedness and response 512.0 Additional mental health services 553.2 Service delivery restoration Additional rehabilitation services 522.4 needs Education services 109.9 Digitalization and telemedicine 200.0 Emergency care equipment 120.0 Other - 1.0 Total 14,169.1 Source: Assessment team. SOCIAL SECTORS 89 Table 13. Estimated 2024 recovery and reconstruction priorities (US$ million) Types of priority activities/investments Estimated cost Investments to build new secondary care facilities 376.0 Investments to build new centers of excellence secondary care facilities 43.3 Investments to reconstruct damaged secondary facilities 133.0 Investments to refurbish and equip ambulance stations 2.0 Investments to build new primary care facilities 73.3 Investments to reconstruct damaged primary care 4.2 Investments rehabilitation centers new 13.1 Investments rehabilitation centers reconstruction 48.2 Investments mental health centers 2.9 Additional primary health care services and medicines 6.0 Health emergency preparedness and response 36.9 Additional mental health needs 24.3 Education needs 0.7 Digitalization and telemedicine 0.8 Investments in emergency care equipment 107.0 Other 1.0 Total 872.6 Source: Assessment team based on priorities defined by line ministries. 90 SOCIAL SECTORS SOCIAL PROTECTION AND LIVELIHOODS Context beneficiary families. A wage subsidy program aimed at encouraging employers to hire IDPs was introduced in March 2022. In 2022, 16,000 IDPs were hired under As Ukraine is responding to the conditions since this program and employers received over UAH the invasion, the needs related to social protection 200 million (US$5.5 million). With the support of this and addressing impacts on livelihoods mount. The program, the number of employed IDPs amounted estimated number of internally displaced persons to 14,400 in 2023; the spending on the program was (IDPs) is 3.7 million (a decrease from 5.4 million at UAH 181 million (US$5 million).198 Significant additional the time of RDNA2), while the number of returnees expenditures will be needed to facilitate the creation of is 4.6 million as of September 2023.195 Nevertheless, jobs for IDPs who remain unemployed, as well as for millions of people are pushed into poverty and the people currently engaged in defense. labor market situation remains highly uncertain. While the estimation of the number of jobs lost largely remains the same as in the RDNA2, compared Damage and Loss Assessment to pre-war levels, employment has fallen by 15.5 percent (or 2.4 million jobs) and output per person The total cost of damage to the sector is estimated has decreased by 13 percent).196 Employment- to be US$0.2 billion (Table 14). Damage in the related needs should also include people engaged in social protection area mostly consists of destroyed defense (which may exceed 1 million) and the needs or damaged infrastructure, such as residential for future recovery grow every month. care units, sanatoriums, or social service delivery centers. As of December 2023, damage to facilities In 2023, expenditures on social assistance amounted providing social services increased further with 161 to over UAH 179 billion (US$4.9 billion).197 This social protection infrastructure assets damaged includes spending on the Guaranteed Minimum Income or destroyed. The total amount of damage is about (GMI), Housing Utility Subsidy (HUS), child and family US$220 million.199 The greatest damage is sustained benefits, disability and care benefits, and benefits to by Odeska (US$42.3 million) and Donetska (US$41.4 IDPs. A social assistance program for IDPs to cover million) oblasts and the city of Kyiv (US$35.8 million). living expenses introduced in March 2022 provides monthly support to around 2.5 million beneficiaries (as The losses in the sector are estimated to be US$60.8 of January 2024). Total spending on social assistance billion (Table 14). These very large losses stem from for IDPs in 2023 amounted to UAH 73.3 billion the nationwide loss of jobs and household income (US$2 billion). Going forward, these expenditures from wages, as well as from higher poverty, related are expected to decrease due to a review of the IDP increased expenditures under existing means-tested support criteria and the introduction of means testing. social protection programs (which did not incorporate HUS spending reached UAH 36 billion (US$1 billion) to sufficient adjustment to inflation due to rising poverty finance energy subsidies for 3.6 million beneficiaries, and reduced fiscal space), and additional needs for while expenditures under the GMI program reached programs such as survivor’s benefits, or payments UAH 11.5 billion (US$0.31 billion) and covered 236,000 and services to people with disabilities. 195 IOM, “Ukraine—Internal Displacement Report—General Population Survey Round 14 (September–October 2023),” November 6, 2023, Link. 196 International Labour Organization (ILO), “Multiple Crises Threaten the Global Labour Market Recovery,” ILO Monitor on the World of Work, 10th ed., October 31, 2022, Link. 197 Government Portal, “Ministry of Finance: In 2023, Social Benefits Worth UAH 450.1 Billion Were Fully Funded,” January 15, 2024, Link. 198 Government Portal, “In 2023, the State Compensated Entrepreneurs with UAH 181 Million for the Employment of More than 14,000 IDPs,” January 8, 2024, Link. 199 For RDNA2, these numbers were 158 infrastructure assets and US$241 million of damage. SOCIAL SECTORS 91 The largest share of losses comes from the the war, the number of persons with disabilities permanent loss of jobs and workers. National increased to 7.4 percent of the population (by polls report that 44 percent of individuals who 300,000 persons).203 Actual numbers are likely to be were employed before the war are working at their close to the international disability prevalence rate regular workplaces, 14 percent are working partially of 16 percent.204 Around 58 percent persons with or remotely, and 15 percent have found new jobs. disabilities report the need for financial assistance, While there has been a reduction in the overall and 20 percent report the need for employment unemployment rate, over a quarter of respondents services.205 are still unemployed.200 Losses stemming from social protection programs are estimated at US$9.5 billion. The calculation of losses used the average Recovery and Reconstruction Needs, monthly salary in Ukraine before the war (as of including Build Back Better January 2022)—US$534—and assessed the losses for 22 months of the ongoing invasion and 18 months The estimated needs in this sector amount to going forward. US$44.5 billion over 10 years (Table 15). It is important to note the following: Human impact. The human impact has been substantial. Loss of private sector jobs and income, Restoration of jobs remains the key priority for high inflation, and asset loss brought on by the recovery. Recovery efforts and restoration of the war have reversed 15 years of poverty reduction, country’s economic potential will require restoring especially for households with children, which is both the output level per person (which is expected estimated to grow from 43.2 percent in 2021 to 65.6 to happen with broad recovery across sectors) and percent in 2023.201 According to initial estimates the workforce potential. The latter poses significant from a monthly phone survey conducted by the challenges and drives large needs. According to a World Bank since April 2023, respectively 9 percent Centre for Economic Strategy, an increasing number and 27 percent of households reported having ran of Ukrainian refugees are unlikely to return to out of food and eat fewer kinds of foods because Ukraine due to the ongoing invasion of Ukraine and lacking money at some point over a 30-day period their adaptation to life abroad.206 Estimates of this in November 2023. In that period, 14 percent of group range from 1.3 million to 3.3 million people.207 respondents reported they had to borrow to cover This contrasts with the increase in employment basic needs while another 12 percent could not pay needed for Ukraine to return to its pre-invasion GDP utilities.202 The number of persons with disabilities trajectory. According to the International Labour is expected to increase, as the injuries sustained Organization (ILO), even if labor productivity returns by members of the military as well as civilians can to pre-war levels, Ukraine would require employment lead to devastating and long-lasting physical and to grow by 37 percent compared to 2021 numbers psychological complications and disability. Between to achieve this goal. This means not only that the 2015 and 2021, the number of persons with certified return of the refugee population is critical, but also disabilities in Ukraine gradually increased from that additional measures—impacting needs - would 2.57 million to 2.73 million people (from 6.2 to 6.7 be needed to increase the participation of in the percent of the prewar population), including around labor force (especially for women), both in terms of 1 million women. Over a span of 18 months during activation measures and through improvements in working conditions to render return more attractive. 200 Calculation of losses uses average income in the economy before the invasion for those who remain unemployed; for those working part-time, assumed income is 50 percent of prewar income. See Rating Sociological Group, “The Twenty-Fourth Nationwide Survey ‘Ukraine in Times of War’ Public Sentiment and Economic Situation of the Population (September 5–7, 2023),” September 28, 2023, Link. 201 UNICEF. 2023. Child Poverty: Impact of the War on the Situation of Households with Children. Link 202 World Bank, Listening to Ukraine phone surveys. Forthcoming. 203 Ministry of Reintegration of Temporarily Occupied Territories, “There Are Three Million Individuals with Disabilities in Ukraine,” September 25, 2023, Link. 204 World Health Organization, “Roundtable Dialogue on Humanitarian Support for Persons with Disabilities in Ukraine,” May 23, 2023, Link. 205 Rating Sociological Group, “How Does Ukrainian Society Truly Perceive People with Disabilities?” November 15, 2023, Link. 206 Centre for Economic Strategy, “Ukrainian Refugees: How Many Are There, Their Intentions & Return Prospects,” August 29, 2023, Link. 207 Centre for Economic Strategy. 2023. Link. 92 SOCIAL SECTORS The RDNA3 estimates that restoring the workforce sectoral use in disability-related programming, potential would require measures aimed at policy making, and management information increasing the labor force participation rates to systems. This should allow the government to better add about 2.3 million workers. This is a midpoint assess the individual needs of beneficiaries and plan value of the low and high estimates of the number of the rehabilitation interventions and expenditures refugees who will remain abroad. According to ILO’s needed to restore their ability to function and work. calculations, adding to the remaining workforce Further efforts are needed to ensure that vulnerable by 2.3 million workers would require increasing groups can fully realize their rights. These should employment-to-population ratio from 47.4 percent include developing a long-term strategy for a to 56.1 percent (8.7 pp change), and specifically complex deinstitutionalization reform involving increase in female employment-to-population ratio all types of residential care institutions (for adults from 39.1 percent to 47.5 percent (8.3 pp change). This and children with disabilities and mental disorders, would require additional efforts and costs (through the elderly, palliative patients, etc.), reviewing and mobility grants, skilling programs, settling-in grants, updating the National Strategy for Reforming the or wage subsidies, and through return migration and Institutional Care for Children and associated Action immigration schemes to ensure access to needed Plan to address new challenges and emerging needs, skills, as well as ensuring availability of care services and enhancing the development of the family-based to support increased participation of women in the and home-based types of care as an alternative to labor force). In addition, special programs are needed residential care. to bridge gaps created by geographical mismatches and changes in labor market needs due to structural In this recovery phase, the utilization of new adjustments. technologies, including cloud-based and online solutions, should be expanded to strengthen the The focus should be on the rehabilitation of adaptability of the overall system. Ukraine has war-affected groups, such as children (i.e., already appreciably invested in digital solutions displaced children, orphans), IDPs, and persons such as the Diia platform, the Pension Fund digital with disabilities. This approach is critical for the platform, and the Unified Information System of the reintegration of war veterans into society and Social Sphere, which allowed digitization of social could efficiently respond to the multidimensional benefits and services. However, new solutions— challenges faced by survivors. It could include such as skill-based job matching at scale—are the restructuring and modernization of relevant needed. The Diia, with almost 20 million users as of benefits, as well as services to reintegrate veterans November 2023,208 allows online enrollment through into civil life (e.g., psychological support, physical a web-based portal in five types of social assistance rehabilitation to improve functionality, social benefits, namely, HUS, adoption grants, benefits for rehabilitation to ensure inclusion in the community). children with long-term adverse health conditions, To support IDPs’ and returnees’ integration into benefits to persons with disabilities since childhood, the local labor market, there must be support for and children with disabilities, and benefits for efforts to relocate businesses, build capacity of single parents. Enrollment in assistance for IDPs is private and public employment services, including available through the Diia mobile application. In 2024, on the assessment of labor market imbalances, the government will launch online enrollment in 10 and provide skills training for IDPs (particularly on additional social assistance programs to enhance entrepreneurship). The budget for social protection access to benefits during the war. The Professional of persons with disabilities, including rehabilitation Education Online Platform, launched in 2022, and assistive technologies, increased from US$51 has been a welcome addition to online training in million in 2022 to US$94 million in 2023. The technical and vocational skills. The platform, which government expedited the adoption of the World includes virtual reality modules to partially bridge Health Organization’s International Classification the practical learning gap arising from war-related of Functioning, Disability, and Health (ICF). In April disruptions in schools and firms, already covers 29 2022, the Ministry of Economy approved the ICF as occupations and will be expanded by an additional a national classification (NC 030:2022) for cross- 60.209 208 Anastasia Nesenyuk, “The Diia App Is Already Used by Almost 20 Million Ukrainians. What New Services is the Ministry of Digital Transformation Working On?” Forbes, November 23, 2023, Link. 209 ILO, “‘Professional Education Online’—A New and Innovative Digital Platform to Sustain TVET Education in Ukraine,” February 21, 2023, Link. SOCIAL SECTORS 93 2024 Recovery and Reconstruction in the budget sector); optimize the number of Priorities and algorithms for social assistance benefits; separate social assistance payments from pensions; and strengthen labor incentives in social The total recovery and reconstruction investment assistance programs to respond to insufficient priorities for 2024 are estimated at US$3.9 targeting, weak behavioral incentives, and less billion (Table 7). In the medium term, there is a adequate support. A better-designed GMI-type need to finance social protection expenditures that program could integrate several less effective will protect poor and vulnerable households and benefits into the current Social Assistance to individuals from additional long-term harm. For Low-Income Families. However, the government example, such programs help prevent mentioned should continue to invest in the modernization of groups from resorting to adverse coping strategies. the benefits administration to address exclusion These expenditures include support through a GMI- errors and non-take-up. type program that provides low-income families with the income to cover basic needs, and through • Social services. Expand the use of complentary housing and utility subsidies that aim to prevent social services to help beneficiaries overcome energy poverty, especially during the heating difficult life circumstances; expand family-based season. Costs associated with these and other social and community-based modes of providing social protection programs (such as benefits to IDPs and services to respond to the underdevelopment of restoration of social services) are expected to reach the social services system in Ukraine. Despite the over US$2.9 billion. However, this cost may grow progress Ukraine has made on its social service based on the territory under government control, reform agenda, more efforts are still needed to resumption of welfare office operations, return of improve the coverage of the poor and vulnerable refugees from abroad, and/or lift of the freeze on population with social services. The capacities and tariffs. Adjusting tariffs alone could increase the budgets of the communities (which are, according needs for 2024 by about US$750 million. to national legislation, responsible for social service financing and delivery) are stretched Limitations and Recommendations for to the limit. To address these constraints, the Future Assessments government will temporarily co-finance some types of services that communities cannot afford from the state budget to ensure sufficient This assessment does not incorporate the expected quantity and/or quality. As the first step, the results of likely changes to social protection government launched a pilot on the centralized policies in the future aimed at higher efficiency financing of the “social services for resilience” of public funds use. The Ministry of Social Policy with a focus on psycho-social services. Based on prepared a concept note that identified key problems the results of the pilot, financing social services in social protection and suggested relevant reform from the state budget is expected to scale up to priorities (listed below), noting that addressing the include other types of services and linkages to problems would impact the social protection needs job opportunities. in the future: For social protection programs that depend on • Social insurance (pensions). Unify and simplify changes in incomes and the cost of basic needs, the different pension guarantees, revise criteria there is high uncertainty beyond the immediate/ for disability, and prepare for the introduction of short term. Expenditures for means-tested a funded pension scheme to respond to declining programs may change significantly depending pension benefit adequacy. on the change in household incomes and their relation to the cost of basic needs, expressed by the • Social assistance. Transform the subsistence legislatively set income threshold. minimum into an anti-poverty tool (de-linking it from fees, fines, and penalties, as well as salaries 94 SOCIAL SECTORS Table 14. Damage, loss, and needs by oblast (US$ million) Oblast Damage Loss Needs Cherkaska 0.0 0.0 0.0 Chernihivska 2.1 0.3 3.1 Chernivetska 0.0 0.0 0.0 Dnipropetrovska 10.7 1.5 15.9 Donetska 41.4 4.8 60.7 Ivano-Frankivska 0.0 0.0 0.0 Kharkivska 6.6 0.5 9.4 Khersonska 6.8 1.0 10.1 Khmelnytska 0.0 0.0 0.0 Kirovohradska 0.0 0.0 0.0 Kyiv (City) 35.8 0.8 49.1 Kyivska 8.3 0.1 11.3 Luhanska 19.9 0.5 27.3 Lvivska 0.0 0.0 0.0 Mykolaivska 10.3 1.0 14.9 Odeska 42.3 0.5 57.6 Poltavska 0.0 0.0 0.0 Rivnenska 0.0 0.0 0.0 Sumska 6.8 0.3 9.5 Ternopilska 0.0 0.0 0.0 Vinnytska 0.0 0.0 0.0 Volynska 0.0 0.0 0.0 Zakarpatska 0.1 0.0 0.1 Zaporizka 28.6 4.0 42.6 Zhytomyrska 0.2 0.0 0.3 Nationwide (no specific region) - 60,571.2 44,230.4 Total 220.1 60,766.3 45,542.6 Source: Assessment team.  Note: - = not assessed. Damage covers 22 months of war between February 24, 2022, and December 31, 2023; loss covers a total of 40 months, which includes 22 months between February 24, 2022, and December 31, 2023, and an additional 18 months until June 30, 2025; needs cover the period 2024–2033. SOCIAL SECTORS 95 Table 15. Total recovery and reconstruction needs (US$ million) as of December 31, 2023 Category Types of activities/investments Total needs (2024–2033) Reconstruction Demolition and debris removal 15.1 needs Repair and reconstruction cost 297.1 Employment-related measures 14,738.4 Means-tested benefits 21,371.9 Service delivery restoration Benefits to IDPs 2,760.1 needs Restoration of social services 1,149.2 Military pensions and other long-term benefits related to the war 4,210.8 Total 44,542.6 Source: Assessment team. Table 16. Estimated 2024 recovery and reconstruction priorities (US$ million) Types of priority activities/investments Estimated cost Repair and reconstruction cost 91.8 Restoration of social services 277.4 Subtotal- reconstruction and recovery 369.2 Employment-related measures 250.0 Means-tested benefits 1,352.6 Benefits to IDPs 1,576.5 Military pensions and other long-term benefits related to the war 382.8 Subtotal- social transfers and employment support 3,561.9 Total 3,931.1 Source: Assessment team based on priorities defined by line ministries. 96 SOCIAL SECTORS CULTURE AND TOURISM Context oblast. It is still necessary to assess the state of the archaeological sites exposed by the draining of the Kakhovka reservoir. The war continues to have a significantly negative impact on the diversity and richness of culture Cultural heritage close to or within areas of active and cultural heritage in Ukraine. It has damaged hostilities remains under ongoing threat. Conditions historic cities, cultural sites, built heritage, cultural of several cultural sites of national importance institutions, and cultural collections; it has caused damaged in 2022 have worsened, making these a loss of livelihood for cultural bearers, cultural sites particularly vulnerable to the direct or indirect creators and others employed in the creative sector; effects of future attacks. For example, the Skovoroda it has further impeded the practice and transmission Museum in the Kharkivska region has entered its of living heritage and has reduced access to culture second winter without protective measures. Some and interfered with the enjoyment of cultural rights, assets have also been repeatedly shelled, in some especially among more vulnerable communities. cases after repairs and urgent interventions were Risk management remains critical as historic cities, completed.211 In addition to the Historic City of Odesa built heritage, and monuments remain under daily (inscribed in January 2023), in light of these threats, threat of bombing. Physical damage to museums in September 2023 the World Heritage Committee and their looting continues highlighting the urgent added two Ukrainian sites to the List of World Heritage need for thorough inventory and improved collection in Danger : (i) Kyiv: Saint Sophia Cathedral and Related management. Monastic Buildings, Kyiv-Pechersk Lavra; and (ii) L’viv – the Ensemble of the Historic Centre. The committee Increased attacks on cultural heritage have been considered that protection of the Outstanding documented since summer 2023, including—for Universal Value of these properties could not be the first time since February 2022—sites protected guaranteed due to the war. Twenty-five sites across under the World Heritage Convention. On July 6, Ukraine are now also registered under the enhanced 2023, a missile hit the historic residential complex protection regime under the Second Protocol of the for teachers of the L’viv Polytechnic, located in the UNESCO 1954 Hague Convention for the Protection of buffer zone of the World Heritage property of L’viv – Cultural Property in the Event of Armed Conflict. the Ensemble of the Historic Centre. Since July 2023, attacks on Odesa have destroyed many cultural and The destruction and forced massive displacement religious establishments and endangered the city’s of populations have also severely affected the cultural heritage, including those protected under ability of bearers and communities to practice and the World Heritage Convention. Repeated strikes transmit their intangible cultural heritage (ICH). have made historic buildings more vulnerable to While living heritage provides a foundation for the future damage caused by blast shock and vibration, identity and well-being of all communities, it also even if they were not directly hit. The destruction provides livelihoods for many of its bearers and of the Kakhovka Dam in southern Ukraine exposed practitioners and their families. The destruction cultural heritage to the dual threat of flooding from the war has affected the workshops of and artillery shelling.210 Khersonska is the most intangible cultural heritage bearers and their access affected oblast, accounting for over 72 percent of to raw materials and the places and spaces needed the estimated damage. Still, the most critical losses to practice their intangible cultural heritage, such as include revenue losses from tourism in Odeska 210 Total damage to identified cultural assets in the oblasts interested by the Kakhovka dam destruction was estimated at US$156.8 million, the majority of which (US$150.8 million) concerns sites and buildings with recognized cultural/social value. See GoU and UN, “Post-Disaster Needs Assessment: 2023 Kakhovka Dam Disaster, Ukraine” 2023, Link. 211 For instance, the Kherson Regional Universal Scientific Library was damaged in August 2022 and again in November 2023. Similarly, the Church of the Intercession in Klishchiivka (Donetska region) has been damaged in March and September 2023. The Odesa Fine Arts Museum was damaged by a missile attack on the Port of Odesa in July 2022; it was repaired with support from UNESCO’s Heritage Emergency Fund and then further damaged in November 2023 by a missile that hit in its proximity. SOCIAL SECTORS 97 traditional markets, which are today non-existent or billion (Table 17), representing an increase of 30 radically diminished. percent since RDNA2. The increase in losses since RDNA2 can be attributed to the increased number Several key recovery efforts have been undertaken of damaged sites, ongoing attacks, and continuous since February 2022. These include support for deterioration of cultural assets and infrastructure, damage assessment and monitoring, both satellite further compounding the sector’s vulnerabilities imagery–based and on-site verification; training and financial strain. The most significant losses are and capacity building in emergency documentation; in tourism (US$9.9 billion) and CCIs (US$7.3 billion). risk prevention and management; in situ preventive Unlike damage, revenue losses remain highly works; winterization of damaged cultural and concentrated in the capital; at US$10.64 billion, these historic assets; stabilizations and urgent inventories; losses amount to more than half of the total loss. provision of energy and relevant supplies for Another US$2.2 billion is due to nationwide losses collections; recovery and reconstruction of cultural (not specific to a region). heritage of Ukraine; support for the livelihoods of artists, especially female artists in country and The human impact within the culture and tourism abroad; and support for development of emergency sector has been significant. Culture is a powerful cultural projects across the country, as well as for driving force in a country’s emergency response, the integration of ICH into school-based education. recovery, and post-war reconstruction. It is an essential people-centred tool for fostering and Damage and Loss Assessment preserving community resilience, collective memory, social cohesion, and collective and individual well-being. Developing the conditions that allow As of December 31, 2023, the total cost of damage cultural institutions and communities to resume in the sector was estimated at US$3.5 billion activities is paramount. Professionals’ technical and (Table 17). Damage concerns (i) buildings, historic management skills must be enhanced to enable cities, and sites imbued with recognized cultural/ them to cope with emerging urgent challenges and social values (US$2.41 billion); (ii) moveable cultural adequately respond. By affecting efforts to safeguard properties, collections, and repositories of culture Intangible Cultural Heritage (ICH), the war has also (US$161 million); (iii) buildings/workshops/ateliers affected the social fabric and the daily practices dedicated to cultural and creative industries (CCIs) and livelihoods of living heritage practitioners, (US$262 million); and (iv) tourism facilities (US$650 producers, community members, cultural million). The most impacted oblast is Kharkivska, professionals, and artists. Many practitioners have which accounts for more than 25 percent of the left the country in the early stages and found refuge damage, followed by Donetska at about 14 percent in the neighbouring countries, where they could find and Odeska at 7 percent. support to continue their practice. Most ceremonies, festivals, performances, markets, and fairs, many Between RDNA2 and RDNA3, 1,402 new damaged of which were organized regularly and provided assets were detected, increasing the total number livelihoods for those involved and their families, had from 3,377 to 4,779. RDNA3 also achieved more to be put on hold. Furthermore, many craftspeople accurate data derived from verified data for CCIs, lost their workshops, along with their tools and which refers now to a baseline of 63,116 estimated materials, due to the shelling. Some raw materials entities engaged in cultural and creative practices, are no longer available or not of sufficient quality, identified through focus surveys.212 RDNA3 also and only some ICH-related professions could replace provides more accurate damage calculations for the in-person markets with online sales possibilities. museum collections, and new data have allowed The National Registry of Intangible Cultural Heritage damage calculation for privately owned/residential of Ukraine was completed after the beginning of the historic buildings; at this stage, they constitute 7.1 war and contains 77 elements today, the viability percent of the total cost of damage. of which might become at risk and require urgent safeguarding measures. The ‘Culture of Ukrainian The losses in the sector—including revenue losses borscht cooking’ was inscribed in July 2022 on the from tourism, art, entertainment, and recreation, UNESCO List of Intangible Cultural Heritage in Need CCIs, cultural education, debris removal, and of Urgent Safeguarding.213 valued asset protection—are estimated at US$19.6 212 UNESCO, “Focus Study on War Impact on CCIs,” July 2023. 213 Government of Ukraine, “Intangible Cultural Heritage of Ukraine,”Link. 98 SOCIAL SECTORS In 2022, the GoU estimated that about 37 percent indirect damage to cultural property—carried out of workers employed in the creative industries had by UNESCO in cooperation with the United Nations lost their jobs and that over 20 percent of creative Satellite Centre (UNOSAT)—remains crucial to industry professionals had left the country. Most produce a verified, evidence-based database as CCI categories experienced an average decline of 20 well as a tool for prioritizing interventions at the percent in their employee numbers. Approximately community level. 60 percent of cultural workers were female before February 2022, and this proportion has remained It is highly recommended to increase the protection substantial, at around 53 percent. Interviews and of cultural heritage and preventive conservation data analysis highlight a gender pay gap across of sites and assets at risk of further damage or sectors and categories: on average, women in destruction. Assessment and documentation of CCIs earn approximately 22 percent less than their cultural assets in need of protection remain a priority male counterparts, even when holding the same that designated authorities shall address through positions. Additionally, according to Resolution No. a more systematic approach and management 245 of the Cabinet of Ministers of Ukraine, dated structure. March 10, 2022, most expenditures for the sector were directed to the state budget reserve fund, and Coordination among actors and partners remains expenditures for culture and art from local budgets crucial. The regular updating of the Action Plan for were also reduced. These reductions represent a Safeguarding of Culture—finalized by international departure from the trend three years before 2022, and national partners as a follow-up to the fourth registered when local budgets increased cultural international coordination meeting convened by the spending by 3 percent. Ministry of Culture and Information Policy of Ukraine and UNESCO and the sessions of the six thematic working groups carried out from April to May 2023— Recovery and Reconstruction Needs, remains an essential tool for international and including Build Back Better national coordination. Integrating all dimensions of culture is critical to the recovery and reconstruction Over the next 10 years (2024–2033), the total needs plans, city master plans, and territorial plans, for recovery and reconstruction, including service especially for the 401 historic cities listed in the delivery restoration, amount to US$8.9 billion Ministry of Culture and Information Policy register. (Table 18). This represents an increase of 30 percent since RDNA2. This increase is mainly due to the Investing in the culture sector is now more essential escalating scale of destruction and the expanding than ever. A comprehensive recovery plan is still scope of recovery efforts required, which now needed to rebuild the industry. This plan should include more comprehensive reconstruction, service include alignment with international standards, delivery restoration, and long-term rehabilitation enhanced legal protection and governance, and of the affected areas. The recent increase in scale, protocols and guidelines for protecting and intensity, and magnitude of attacks on cultural sites, recovering cultural heritage. Revisions to state including sites inscribed on the UNESCO World policies are necessary to support cultural heritage Heritage List, are particularly relevant. The oblast preservation, institutional capacity, and regulations, with the largest share of needs is Kharkivska, which mainly to protect heritage from urban development accounts for more than 27 percent of total needs, pressures. Ensuring the quality of interventions and followed by Donetska at about 14 percent and harmonization of practices also remains essential. Odeska at 7 percent. Infrastructure and assets must be restored to pre- disaster levels with inclusive BBB to reduce risks The needs prioritized in RDNA2 remain valid. In and vulnerabilities to future disasters. All these the first step, needs include damage assessment priorities must be accompanied by a substantial and documentation, as well as emergency and inclusive capacity-building programme for the sector risk preparedness measures for immovable and to sustain the results achieved. The recovery plan moveable cultural properties; restoration and will require significant funding, including increased reconstruction; further safeguarding of CCIs and ICH; cultural expenditures from local budgets. and operational costs associated with the rebuilding. Satellite-imagery-based verification of direct and SOCIAL SECTORS 99 2024 Recovery and Reconstruction (iv) strengthening of legal protection of the cultural Priorities sector and normative frameworks during and after the war, including master plans (US$0.8 million); (v) Support for the restoration of the creative industry Public investment priorities for recovery and and safeguarding of intangible cultural heritage reconstruction in 2024 are estimated at US$5.7 (US$26.5 million). million (Table 19). In practical terms, this means that in 2024, line ministries will prioritize projects for activities related to (i) emergency and urgent Limitations and Recommendations for conservation measures; (ii) reactivation of functions Future Assessments damaged assets and facilities; (iii) urgent repairs of key assets; and (iv) construction of shelters Monitoring cultural properties in inaccessible for key cultural facilities. While the Government’s areas, especially smaller-scale properties with immediate priorities are focused on funding physical local significance, remains challenging. Assessing infrastructure, the key urgent actions that have damage to underwater heritage remains difficult been identified to amount to US$197 million and for Ukraine, with its 2,700 km coastline. Without include (i) damage assessment, monitoring, detailed initial baselines and data, identifying damage and documentation, and harmonized digitalization; losses for ICH is ongoing and will require further emergency measures, including debris removal in-depth surveys and studies. Quantitative data on (US$85.7 million); (ii) repair of assets as feasible human resources in the sector is also generally to restore function; preservation of built heritage, unavailable. In particular, more investment is needed historic cities, and cultural infrastructures to prevent/ in gathering quality data and defying disaggregated mitigate demolition of sites/buildings of cultural data, including data on people with disabilities. significance (US$52 million) ; (iii) reinforcement of professionals’ capacities (US$32  million); Table 17. Damage, loss, and needs by oblast (US$ million) Oblast Damage Loss Needs Cherkaska 6.7 80.8 13.1 Chernihivska 136.0 340.1 367.2 Chernivetska 2.4 19.8 4.7 Dnipropetrovska 90.4 262.4 212.0 Donetska 515.1 173.0 1,304.4 Ivano-Frankivska 3.0 63.5 5.8 Kharkivska 906.1 1,247.7 2,490.7 Khersonska 249.5 107.3 571.9 Khmelnytska 33.5 37.8 90.9 Kirovohradska 5.4 188.6 14.4 Kyiv (City) 195.1 10,643.4 460.4 Kyivska 133.5 517.0 374.0 Luhanska 264.6 81.1 637.1 Lvivska 58.6 1,966.6 123.0 Mykolaivska 221.7 152.6 623.3 Odeska 267.5 918.9 666.8 Poltavska 8.8 679.1 18.7 Rivnenska 2.3 27.0 4.5 Sumska 105.8 85.6 274.6 Ternopilska 2.1 72.9 4.2 100 SOCIAL SECTORS Oblast Damage Loss Needs Vinnytska 24.3 7.2 63.9 Volynska 3.6 68.2 7.7 Zakarpatska 2.2 318.7 5.0 Zaporizka 219.4 1,476.4 513.1 Zhytomyrska 27.3 111.7 66.0 Nationwide (no specific region) 5.0 2.2 19.6 Total 3,490.0 19,649.6 8,936.9 Source: Assessment team. Note: Damage covers 22 months of war between February 24, 2022, and December 31, 2023; loss covers a total of 40 months, which includes 22 months between February 24, 2022, and December 31, 2023, and an additional 18 months through June 30, 2025; needs cover the period 2024–2033. Table 18. Total recovery and reconstruction needs (US$ million) as of December 31, 2023 Total needs Category Types of activities/investments (2024–2033) Damage assessment, monitoring, detailed documentation, and harmonized 305.2 digitalization Emergency measures for immovable cultural properties (shoring, propping, structural reinforcements, sheltering, and protection measures, including 1,013.2 Reconstruction debris removal and demolition) and moveable properties (inventories, needs preparedness plans, storage management, etc.) Repair of assets as feasible to restore function; preservation of built heritage, historic cities, and cultural infrastructures to prevent/mitigate demolition of 675.5 sites/buildings of cultural significance Reconstruction/restoration of assets 4,880.7 Strengthening of legal protection of the cultural sector and normative 50.9 frameworks during and after the war Service delivery Reinforcement of professionals’ capacities 525.9 restoration needs Support for the restoration of the creative industry and safeguarding of 823.6 intangible cultural heritage Operational costs 662.0 Total 8,936.9 Source: Assessment team. Table 19. Estimated 2024 recovery and reconstruction priorities (US$ million) Types of priority activities/investments Estimated cost Emergency measures 0.9 Reactivation of functions of damaged assets/facilities 0.5 Urgent repairs of assets 1.5 Shelter construction 2.8 Total 5.7 Source: Assessment team based on priorities defined by line ministries. 101 PRODUCTIVE SECTORS Photo by FAO/Viacheslav Ratynskyi. Harvesting in Kyiv oblast. 1 August 2023, Kyiv oblast. 102 PRODUCTIVE SECTORS AGRICULTURE214 Context to affect production decisions, trade, and farm gate prices in 2024.218 Since February 2022, the war has had severe impacts on Ukraine’s agriculture sector. Before Damage and Loss Assessment the war, the sector played a significant role in the country’s economy. It contributed 10 percent to The damage and losses suffered by Ukrainian GDP, employed 14 percent of the labor force, and agriculture are estimated to amount to US$80.1 accounted for 41 percent of total exports.215 But the billion, with losses accounting for 87 percent of the war, which began just before the start of the 2022 total (Table 20). spring planting campaign, has had a very significant impact on the agriculture sector. The total planting Total damage in the agriculture sector amounts to area in 2022 decreased by 20 percent compared to US$10.3 billion, while losses amount to US$69.8 2021, and 15 percent of agricultural capital stock was billion; these figures include damage and losses already damaged within the first three months of the related to destruction of the Kakhovka Dam. The war. The grain and oilseed production in 2022 fell to damage includes the partial or complete destruction 73 million tons, a decrease of 30 percent compared of storage facilities, fisheries and aquaculture, and to the previous year.216 The lower agricultural perennial crops, as well as the forced slaughter of production, coupled with rising prices of inputs livestock. It also encompasses the destruction and (particularly fertilizers and diesel), significantly theft of machinery and equipment and the theft reduced farm incomes. The blockade of the Black of inputs and outputs. Machinery and equipment Sea during the early months of the war led to a sharp damage account for the largest share of total drop in agricultural exports, which primarily relied on damage (57 percent), followed by stolen inputs and Black Sea ports. Although alternative routes helped outputs (18 percent) and damaged storage facilities increase grain and oilseed exports in subsequent (18 percent). As of December 2023, the damage in months, volumes were still below prewar levels. As a the sector increased by only 18 percent compared to result, domestic farm gate prices for wheat and corn February 2023, as most assets located in active war declined by 45 percent between January and June zones had already been damaged during the first 2022, while global prices increased by 15 percent. year of the war. The highest damage values were The Black Sea Grain Initiative, launched in July 2022, recorded in Luhanska, Zaporizka, and Khersonska increased exports; but the logistical costs remained oblasts, collectively representing 65 percent of the high, putting pressure on farm gate output prices. total damage. Favorable weather conditions in 2023 led to the recovery of grain and oilseed production (79 million In contrast to RDNA2, which had to project damage tons), but it remained much below the 2021 level values for livestock and perennial crops, RDNA3 (105 million tons).217 In June 2023, the destruction of based its estimates on published data. Specifically, the Kakhovka Dam resulted in a threefold increase it used State Statistics Service of Ukraine data in damage to the aquaculture and fishery industries. available as of January 1, 2023, on changes in the Following the termination of the Black Sea Grain number of animals and area under perennial crops. Initiative in August 2023, export volumes and farm The use of actual figures to estimate damage leads gate prices fell. The low profitability of agriculture to a minor decrease in damage in the livestock and and uncertainty over export prospects will continue perennial crop sectors and reduces the overall 214 The agriculture sector includes crops, livestock, and fisheries/aquaculture. It excludes irrigation and forestry as well as the food industry and agro-logistics, which are included in other parts of the RDNA. 215 Data from State Statistics Service of Ukraine, State Employment Center. 216 Data from United States Department of Agriculture (USDA). 217 Data from USDA. 218 Ministry of Agrarian Policy and Food of Ukraine, “The Profitability of Grain and Oil crop Production Is Still Decreasing, While Exports by Sea are Slowly Recovering,” December 11, 2023, Link. PRODUCTIVE SECTORS 103 damage in the Kyivska, Sumska, and Chernihivska assumed that only the 2021 ending stock and the regions. The almost threefold increase in damage 2022 harvest would be affected by lower prices. in the aquaculture and fisheries sector between The RDNA3 estimates also include losses due to RDNA2 and RDNA3 was a result of the destruction of lower prices for export-oriented commodities from the Kakhovka Dam. the 2023 harvest. Furthermore, RDNA3 uses more accurate price data that recently became available The losses amount to US$69.8 billion. The war- to estimate losses due to higher input costs in 2022. induced losses include the following: loss of farm As input prices remain above the prewar level, the income (due to lower or forgone production); lower presented estimates as of February 2024 include farm gate prices (due to export logistic disruptions); losses due to higher input prices in 2023 as well. higher farm production costs (due to higher prices of fertilizers and fuel); the cost of land recultivation after Human impact. The invasion of Ukraine has also mine-related surveying, clearance, and land release had a large human impact. A significant drop in the operations;219 and the halt of fishing operations. The profitability of agricultural production has reduced largest loss, accounting for 49 percent of the total farmers’ incomes and the wages of millions of rural losses, is attributed to the decrease in annual crop Ukrainians. As a result of the 20 percent decrease in production. The loss caused by the decrease in farm planting area and 10 percent decrease in livestock gate prices of export-oriented commodities, such as herds, the direct employment in the sector is wheat, barley, corn, and oilseeds, is the next largest, estimated to drop by 18 percent. 3.4 million people accounting for 35 percent of losses. Other significant are targeted in need of food security and livelihoods losses include lower livestock production (8 percent), support.220 The indirect impact is much higher, as the higher input costs (6 percent), lower perennial crop abovementioned collapse in agricultural profitability production (1 percent), and land recultivation–related is reducing the demand for labor and reducing losses as well as fisheries and aquaculture losses wages paid to farm workers. (1 percent combined). Compared to the February 2023 estimates, the losses have more than doubled. Kharkivska, Khersonska, Vinnytska, and Zaporizka Recovery and Reconstruction Needs, oblasts experienced the largest losses. Losses in including Build Back Better Vinnytska oblast stand out because the region plays a significant role in national agricultural production, The total recovery and reconstruction needs in the though it has not been directly affected by ground public sector are estimated at US$56.1 billion over battles. 10 years (Table 20, Table 21), including US$435 million in 2024 (Table 22).221 To ensure that the Several factors contribute to the increase in losses. agricultural sector recovers, drives the overall Unlike the February 2023 loss estimates, which economic recovery, serves as a decent income source considered only production in 2022 and winter 2023, for farmers, and provides food for the Ukrainian the RDNA3 estimates include losses for the entire year population, several investments are especially of 2023. Considering that the war may not end before important. These include addressing liquidity the 2024 planting season, the estimates also include constraints, investing in resilience to disasters and projected crop production losses for all of 2024. The climate change, investing in integrated food-energy same applies to estimates of livestock production systems, and strengthening the agricultural public losses, which now cover three years of decreased institutions to effectively support recovery and production, compared to the one year covered in reconstruction as well as EU accession. The near the February 2023 estimates. The estimated losses doubling of total recovery and reconstruction needs have also changed due to lower prices for export- between RDNA2 and RDNA3—the increase is 89 oriented commodities. The February 2023 estimates percent—derives from the increase in total damage and losses during the same period. 219 Note that the losses from mines on agricultural land and the need for the survey, clearance, and release of agricultural land are not included in the agriculture sector estimates. They are presented separately in the section on cross-cutting sectors. 220 OCHA. 2024. Ukraine Humanitarian Needs and Response Plan 2024. December 2023. Link 221 The estimate of the needs is based on recent Government of Ukraine’s documents, including the 2022 National Recovery Plan and the 2023 Recovery and Reconstruction Plan for Agriculture. 104 PRODUCTIVE SECTORS Needs are concentrated in the following areas: in previous years. To relaunch agricultural production, this support combines grants and • Completing reconstruction or replacement of inputs for small farms, interest rate compensation war-damaged assets while accommodating the for agricultural production loans, and matching build back better principle. investment grants for horticulture production. • Supporting a longer-term recovery in the sector 2. Clearing of mines (estimated separately; not to increase its diversification, inclusiveness, included in Table 20 or Table 21). climate resilience, food-energy integration, and environmental and social sustainability in line Donors have already made US$488 million—or with the European Green Deal requirements. 112 percent of the 2024 needs—available for the recovery of Ukrainian agriculture (Table 23). The • Scaling up investment in agricultural public donor financing focuses on addressing immediate institutions for delivery of evidence-based needs of farmers, mainly access to affordable agriculture and rural development policy making, finance, especially for small farmers. Donors also which includes agricultural services (sanitary prioritize investments in capacity building and and phytosanitary measures, food safety, land provision of public services, including technical monitoring and registration, soil testing for assistance for the EU accession. precision agriculture, agricultural research and extension services, training and retraining of farmers and staff of agribusinesses, etc.) so Limitations and Recommendations for the institutions can better support the sector’s Future Assessments climate-resilient recovery. While most of the damage was assessed using the results of farm and fishery/aquaculture surveys 2024 Recovery and Reconstruction conducted in 2022, some damage, including stolen Priorities inputs and outputs, was estimated indirectly. It will be important to reassess these data in the future to The principal recovery and reconstruction focus ensure accuracy. Additionally, including estimates for the year 2024 includes the following measures, for irrigation, food processing, and agro-logistics which consider the implementation/absorption as well as agricultural land survey, demining, and capacity of the government: land release operations (all presented in other parts of the RDNA) will provide a more comprehensive 1. Provision of direct support to farmers through understanding of the losses and needs in the the public programs that were successfully agrifood sector. PRODUCTIVE SECTORS 105 Table 20. Damage, loss, and needs by oblast (US$ million) Oblast Damage Loss Needs Cherkaska  1  3,131  1,819 Chernihivska  234  3,785  2,484  Chernivetska  0  377  219  Dnipropetrovska  1  3,720  2,161  Donetska  912  3,700  3,752  Ivano-Frankivska  -  667  387  Kharkivska  1,360  6,000  5,366  Khersonska  2,050  5,660  6,649  Khmelnytska  -  4,063  2,359  Kirovohradska  1  2,900  1,686  Kyivska  456  3,206  2,458  Luhanska  1,747  2,799  4,682  Lvivska  -  1,072  623  Mykolaivska  476  3,385  2,583  Odeska  1  2,534  1,473  Poltavska  0  3,818  2,218  Rivnenska  -  1,008  585  Sumska  119  3,402  2,137  Ternopilska  -  1,782  1,035  Vinnytska  -  4,768  2,768  Volynska  -  1,013  588  Zakarpatska  -  316  183  Zaporizka  2,929  4,656  6,680  Zhytomyrska  0  2,003  1,163  Total 10,288  69,763  56,057  Source: Assessment team. Note: - = not assessed. Damage covers 22 months of war between February 24, 2022, and December 31, 2023; losses cover a total of 40 months, including 22 months between February 24, 2022, and December 31, 2023, and an additional 18 months through June 30, 2025; needs cover the period 2024–2033. Table 21. Total recovery and reconstruction needs (US$ million) as of December 31, 2023 Category Type of activities/investments Total needs (2024–2033) Reconstruction Support for reconstruction 9,402  needs Support for immediate agriculture production recovery 6,122  Service delivery Support for longer-term recovery of the agriculture sector 35,513  restoration needs Support for agricultural public institutions and programs, 5,020  including for EU accession Total 56,057  Source: Assessment team. 106 PRODUCTIVE SECTORS Table 22. Estimated 2024 recovery and reconstruction priorities (US$ million) Types of priority activities Estimated cost Support for immediate agriculture production recovery 402 Interest rate compensation (portion of 5-7-9 program) 320 Grants and inputs for agricultural production by small farms 71 Partial credit guarantees for agriculture 11 Support for longer-term recovery of the agriculture sector 13 Investment grants for investing in horticulture (portion of e-Robota program) 13 Support for agricultural public institutions and programs, including for EU accession 20 Total 435 Source: Assessment team based on priorities defined by line ministries. Table 23. Actual donor support (US$ million) Types of activities/investments 2023 2024 2025 Total Support for immediate agriculture production recovery 273.8 448.2 134.9 856.9 Interest rate compensation (5-7-9 credit program) 180.0 250.0 70.0 500.0 Partial credit guarantee for agriculture 21.8 6.8 0.8 29.4 Additional liquidity for agricultural financing 3.5 3.5 3.5 10.5 Grants for production by small farms   173.2 50.0 223.2 Inputs and cash transfers for small farms 51.6 11.2 8.3 71.1 Storage bags and other storage equipment distributed to farms 2.3 2.3 2.3 7.0 Procurement of equipment 14.5 1.2 15.7 Support for longer-term recovery of the agriculture sector 46.7 21.9 15.8 76.0 Development of storage infrastructure 4.7 4.7 14.7 44.0 Investment grants for value chains 3.2 6.4 6.0 15.6 Investment grants for horticulture 30.0 2.0  2.0  34.0 Support for water use associations and restoration of irrigation 10.7 10.7  5.0  26.4 systems Financing of medium to long-term investments 2.8 2.8 2.8 8.4  Support for agricultural public institutions, including for accelerating 22.1 18.3 14.2 39.5 the EU accession Support for MAPF (including State Agrarian Registry maintenance) 3.2 4.3 3.3 10.8 Support for food safety 2.1 1.2 1.2 4.5 Support for agricultural research and education institutions 5.2 5.2 4.7 15.1  Support for policy dialogue and strengthening of the technical 11.6 7.6 5.1 24.2 capacity of Ukrainian institutions Total 342.6 488.3 164.9 972.4 Source: Assessment team. Note: MAPF = Ministry of Agrarian Policy and Food. PRODUCTIVE SECTORS 107 IRRIGATION AND WATER RESOURCES Context Organizations (WUOs), alongside establishing a new agency within the Ministry of Agrarian Policy and Food to take over irrigation and fisheries management. As The irrigation and water resources sector has of January 2024, there are 32 established WUOs.222 been affected deeply by the war. With 41 million State support for WUOs is provided through the hectares (of which 33 million are under cultivation), State Agrarian Register. Resolution No. 1110 (dated agriculture plays a crucial role in the country’s 20/09/23) amended the procedure for the use of economy, contributing to 10 percent of the GDP, 41 funds provided for in the state budget for providing percent to exports, and 14 percent to employment. state support to agricultural producers who use While irrigation is used on only 1 percent of all reclaimed land and water user organizations. Budget agricultural land, it is vital for specific crops like subsidies will be provided for the reconstruction of potatoes (15 percent), tomatoes, and rice (almost existing and/or construction of new reclamation all), and certain regions such as Khersonska Oblast systems using sprinkler or drip irrigation, as well as (14 percent). Drainage systems, covering around 10 for the rehabilitation of pumping stations.223 percent of the agricultural land, predominantly in the north and northwest, significantly enhance Ukraine’s These steps are crucial for Ukraine to manage production capabilities, particularly in cereal and its water resources effectively in line with the EU beef production, by providing usable pastures and Water Framework Directive, which emphasizes forage land. integrated water resources management and river basin management. Since February 2022, the I&D However, the irrigation and drainage (I&D) sector and infrastructure has been severely damaged by the flood protection and water resource management ongoing war, with targeted attacks on reservoirs, (WRM) faced persistent challenges even before the irrigation systems, dams (such as the Kakhovka Dam war. The I&D systems, developed initially for state- on June 6, 2023), and critical agency buildings. Other run farms during the Soviet era, were broken up damage has occurred due to intense fighting around during the economic and political transition after the water systems, vandalization of structures while the collapse of the Soviet Union. The breakdown of the areas were temporarily not under government large state structures led to a vacuum in ownership control, construction of barricades with material and funding, causing widespread deterioration and from the water systems, defensive inundations, and a dramatic decrease in irrigated areas. Prior to the the placement of mines around vital infrastructure. invasion, out of 2.2 million hectares equipped for All of these further complicate the path to recovery irrigation, only 738,000 hectares (33 percent) are and effective water management. operational without additional investment, and this number has further significantly decreased due to war-related impacts. This underutilization, coupled Damage and Loss Assessment with poor maintenance, inadequate drainage, and rising energy costs, has substantially dropped The estimated damage to Ukraine’s irrigation sector productivity. In response, the Ukrainian and water resource sector is US$740.2 million government, with support from the World Bank, (Table 24). This is considered as minimum/subject has been implementing a strategy since 2017 to to further data as per the limitations section. This improve the I&D sector. This includes reforms in includes damage to movable assets, buildings, and national institutions and the creation of Water User agency premises from both the State Agency of 222 Only one of them has been given ownership of the meliation system, while others are pending. 223 Government of Ukraine. 2023. Cabinet of Ministers of Ukraine Decree dated October 20, 2023 No. 1110 Kyiv On making changes to the Procedure for the use of funds provided in the state budget for providing state support to agricultural producers who use reclaimed land and water user organizations. Link. 108 PRODUCTIVE SECTORS Melioration and Fishery (SAMF) and the State Agency flooding (53 percent) —with river basins in Ukraine’s of Water Resources (SAWR), totaling US$15.6 million. northern regions inundated to fend off invasion— Additional damage includes farm infrastructure mining (35 percent) in border areas for defense, damage (48.5 percent), US$10 million damage to the and deterioration of farm systems (12 percent) due Karachunivske and Oskilske reservoirs, and damage to lack of maintenance, operational staff, inputs, to the Kakhovka dam (48 percent) (Table 25Table and raw materials. The most significant losses 24). This estimate excludes damage to occupied real are recorded in Zhytomyrska Oblast, amounting estate as this damage cannot be assessed yet. The to US$132 million, followed by Volynska Oblast most affected regions are Chernihivska (US$90.2 at US$129 million, and Sumska Oblast at US$121 million), Zhytomyrska (US$63.9 million), Volynska million. The operational losses of farmers in the (US$62.5 million), Rivenska (US$58.7 million), Kyivska Khersonska, Dnipropetrovska, and Zaporizka regions (US$54.6 million), as well as Khersonska (US$363.2 due to the destruction of the Kakhovka Dam and loss million). It is expected that Dnipropetrovska and of irrigation sources have yet to be assessed, which Zaporizka, for which the assessment was not could lead to changes in the overall estimate. completed, have also sustained major damage. Human impact. The destruction of vital infrastructure As of February 2023, the damage to the irrigation such as the Kakhovka dam, irrigation canals, and water resource sector in Ukraine has escalated pumps, and reservoirs has severely disrupted water dramatically, showing a 95 percent increase. availability for agricultural and domestic purposes, This substantial rise is primarily attributed to the significantly affecting communities reliant on these destruction of the Kakhovka Dam in the Khersonska systems. This deterioration not only undermines oblast, a consequence of the attack on June 6, 2023, local economies, especially in rural areas, but also with an estimated damage of US$359.3 million. Due elevates environmental and public health risks to ongoing hostilities and occupation the losses as due to potential pollution and inadequate water a result of destruction of the Kakhovka Dam have treatment. Furthermore, the loss of governance in not yet been assessed. However, lower water levels water resource management hampers restoration in the Kakhovka reservoir will disconnect irrigation efforts, leading to extended service disruptions and channels. It is estimated that a total of 350 irrigation challenges in recovery. pumping stations and 1.1 thousand kilometer of irrigation canals are not in use. Recovery and Reconstruction Needs, The losses in the sector are estimated to be including Build Back Better US$716.8 million (Table 24). These are also considered minimal, as per noted limitations. As The estimated total recovery and reconstruction the war persists, the losses have surged, marking needs for a building back better approach in a staggering 233 percent increase compared to the irrigation, drainage, and flood protection assets earlier RDNA. The losses include operational losses stand US$10.7 billion over the next decade (Table based on lost profit as reported by the different 26). Investments not only encompasses the repair of operational state entities. A major factor is that in damaged systems where feasible but also includes many areas, payment for water services by water compensatory programs. These programs aim to users is hampered. The war resulted in a fast maintain and enhance production levels through reduction of direct payment of water use rent to the improved drainage and expanded irrigation in regions state budget by industries and other water services. that have remained under government control. Priority These operational losses also reflect the damage to should be given to safe regions where restoration government and management of the water systems, can begin swiftly. The oblasts with the highest needs, as the financial basis is having a serious setback. according to current data, are Kyivska (US$3,944 million) and Khersonska (US$1,898 million). The These operational losses are the result of multiple latter is the result of the estimated needs of US$1,498 factors, depending on the region in the oblasts. Data million to repair the Kakhovka dam construction and on farm level and evaluation of losses categories for the damage to the pumping station for the command the I&D systems use were obtained by the Institute area of 780,000 hectares. of Water Problems and Land Reclamation and the NGO Primavera. Losses in profit for irrigated areas The significantly delay of institutional reforms, are accounted for in the agricultural sector’s overall including the development and operationalization loss assessment. This section accounts for losses in of WUOs, is adversely affecting the management of payment for water services due to factors such as water resources. To fully understand the implications PRODUCTIVE SECTORS 109 of transferring infrastructure to WUOs and to address and water management systems and buildings, their ongoing needs, a comprehensive assessment and the replacement of moveable assets in areas is imperative. The priority focus for modernizing I&D that were recently brought back under government systems should be on operational systems, located control and areas that did not face hostilities. A in areas under government’s control. This will make feasibility study and inventory for this restoration it possible soon to increase the area of irrigated land and modernization (US$10 million) is a 2024 and agricultural productivity, without waiting for the investment priority for Kyivska, Chernihivska, Sumy, moment when it becomes possible to implement Zhytomyrska, Rivenska, and Volynska. This is to help such strategic projects as the restoration of the the irrigation and water resource sector rebound Kakhovka Dam. This modernization involves not just and address the lack of water supply and irrigation repairing damage but also updating and enhancing services to farmers. operational yet outdated infrastructure. Another priority for 2024 is starting with the Investing in operational, undamaged infrastructure restoration and building back better of on-farm is essential for a rapid economic rebound and irrigation technology and equipment support to to compensate for losses due to direct physical the established WUOs (US$33.6 million) in the damage. This strategy should simultaneously areas of Kyivska, Cherkaska, Poltavska, Vinnytska, concentrate on modernizing operational irrigation Dnipropetrovska, Mykolaivska, and Odeska. A systems for WUOs and restoring damaged prior focus is required for technical infrastructure infrastructure in war-impacted areas. Additionally, inventory and design of modernization projects, priority should be given to upgrading multi-functional equipment for water management planning, drainage systems, which will broaden irrigation accounting, and irrigation monitoring including options during dry periods and bolster forest training of the WUOs. and natural area protections. Furthermore, farm rehabilitation is another crucial aspect in restoring productivity and should be prioritized in safe Limitations and Recommendations for areas. Enhancing water quality is also a key focus, Future Assessments necessitating the installation or repair of monitoring stations and the implementation of advanced water • Findings of this assessment are preliminary, treatment solutions. have yet to be verified, and are based on limited data collection. Significant recovery efforts since the war’s onset • Regional data for some oblasts that likely include SAWR’s successful repair of the Shandor suffered from the war were unavailable and gate in the Kazarovytska Dam and the renovation is therefore not included in this assessments, and reactivation of the water monitoring laboratory resulting in an unrepresentable distribution of in Donetska oblast, after return under government damage, losses, and needs among oblasts control. These actions have already met some of the • Differentation per asset (i.e., canals, pumps etc.) war-related needs identified in the previous RDNAs. class was not possible, instead this assessment differentiated by regional water management Moreover, broader sector reforms are imperative organisation including a mix of assets. for the systematic improvement of management • In subsequent assessments, clearly delineate of hydro-technical melioration systems, damage and restoration needs for reclamation including facilitating investment access, improving systems and water management. management efficiency, ensuring transparent • Financing priorities allocated for 2024 are tariff structures, and completing the transfer of provisional and can only be utilized by the Ministry melioration systems to relevant agencies and WUOs, once VAT/tax code challenges are resolved. The crucial for modernization and expansion. World Bank and the MAPF are working closely together to resolve this issue to facilitate support and establishment steps for WUOs. 2024 Recovery and Reconstruction Priorities Future assessments are recommended to include losses stemming from reduced or absent The total recovery and reconstruction investment governance functions, such as the destruction priorities for 2024 are estimated at US$43.6 of monitoring infrastructure and challenges million (Table 27). The most pressing investments in establishing regimes for special water involve restoration of damaged hydraulic facilities use management in inaccessible territories. 110 PRODUCTIVE SECTORS Additionally, the impact of reduced water resources, comprehensive analysis and continuous potentially caused by the destruction of hydrological monitoring, particularly in the aftermath of the facilities at major reservoirs and main irrigation Kakhovka incident, to address decline in water canals, should be considered. availability in the water bodies. • Expanded local field surveys: To gain a more Areas where active hostilities are taking place accurate understanding of the damage and or areas not under government control are not losses, conducting additional local field surveys included in this assessment, the inventory reporting is recommended, focusing on both direct and is therefore incomplete as there is no (reliable) indirect impacts on water resource management. communication with the operation agencies. • Make monetary estimates of damage, losses, Recommendations for future assessments include: and needs for water resource management, specifically in relation to governance functions • Enhanced Water Quality Monitoring: A and loss of water resources. significant decline in water quality necessitates Table 24. Damage, loss, and needs by oblast (US$ million) Oblast Damage Loss Needs Cherkaska - 0.0 49.0 Chernihivska 90.2 0.0 184.9 Dnipropetrovska 0.5 0.0 339.7 Donetska 0.5 - 51.7 Kharkivska 5.7 0.0 52,8 Khersonska 363.2 - 1,897.7 Khmelnytska 0.0 52.0 0.0 Kirovohradska 0.0 0.0 0.0 Kyiv (City) 0.0 0.0 0.0 Kyivska 54.6 50.0 3,943.6 Luhanska 0.5 - 50.6 Lvivska 0.0 0.0 22.9 Mykolaivska 7.6 0.0 590.9 Odeska 0.0 52.9 364.2 Poltavska - 0.0 27.3 Rivnenska 58.7 0.0 184.9 Sumska 32.0 121.0 184.9 Ternopilska 0.0 33.0 0.0 Vinnytska - 0.0 1.7 Volynska 62.5 129.1 184.9 Zakarpatska - 0.0 0.0 Zaporizka - 52.9 63.4 Zhytomyrska 63.9 131.9 203.6 Nationwide (no specific region) 0.3 93.0 2,335.1 Total 740.2 716.8 10,734.0 Source: Assessment team. Note: - = not assessed. Damage covers 22 months of war between February 24, 2022, and 31 December 2023; Loss covers a total of 40 months, which includes 22 months between February 24, 2022 and December 31, 2023, and an additional 18 months until June 30, 2025; needs cover the period 2024–2033. PRODUCTIVE SECTORS 111 Table 25. Damage per category (US$ million) Damage Oblast Property Property On farm Reservoir Kakhovka dam damage of damage of infrastructure damage damage SAWR SAMF damage Cherkaska - - -     Chernihivska 0.24 - 90.00     Dnipropetrovska 0.53 - -     Donetska 0.45 - -     Kharkivska 0.65 - - 5.00   Khersonska 3.73 0.19 -   359.31 Khmelnytska - - -     Kirovohradska 0.01 - -     Kyiv (City) - - -     Kyivska 1.20 - 48.42 5.00   Luhanska 0.45 - -     Lvivska 0.01 - -     Mykolaivska 7.57 0.01 -     Odeska 0.01 0.01 -     Poltavska - - -     Rivnenska 0.03 0.15 58.56     Sumska 0.03 - 31.98     Ternopilska 0.002 - -     Vinnytska - - -     Volynska 0.06 - 62.49     Zakarpatska - - -     Zaporizka - 0.01 -     Zhytomyrska 0.05 - 63.81     Nationwide (no specific region) 0.25 - -     Total 15.26 0.37 355.26 10.00 359.31 Source: Assessment team. Note: - = not assessed. Damage covers 22 months of war between February 24, 2022, and December 31, 2023. 112 PRODUCTIVE SECTORS Table 26. Total recovery and reconstruction needs (US$ million) as of December 31, 2023 Responsible Total needs Category Types of activities/investments agency (2024–2033) Reconstruction, overhaul and modernization of state SAMF 2752.5 irrigation infrastructure Reconstruction of hydraulic structures of protective arrays of Reconstruction SAWR 77.0 Dnipro reservoirs needs Irrigation system upgrading and expansion in four priority systems: Kakhovska, Pivnichno-Rogachinska, Sirogozska and SAMF 1,254.7 Priazovska Restoration and modernization of water management SAWR 1,408.2 infrastructure Restoration of the functioning of the state water monitoring SAWR 1.5 system Service delivery Restoration and construction of centralized water supply of SAWR 91.6 restoration rural settlements using imported water needs Restoration of drainage systems SAMF 1,080.0 Flood risk management measures SAWR 0.0 Protection of floodplains of the Irpin River SAWR 3,742.3 On-farm irrigation technology/equipment support to WUOs SAMF 321.1 Total 10,734.0 Source: Assessment team. Table 27. Estimated 2024 recovery and reconstruction priorities (US$ million) Types of priority activities/investments Estimated cost Feasibility study and inventory for restoration and modernization of specific systems 10.0 Technical infrastructure inventory and design of modernization projects, equipment for water management planning, accounting, and irrigation monitoring including 33.6 WUOs training. Total 43.6 Source: Assessment team based on priorities defined by line ministry. PRODUCTIVE SECTORS 113 COMMERCE AND INDUSTRY224 Context Damage and Loss Assessment Commerce and industry stand as the backbone Total damage to the commerce and industry of the economy, contributing roughly one-third facilities between February 2022 and December 31, to Ukraine’s GDP and supporting approximately 2023, is estimated at US$15.6 billion (Table 28), a 6.0 million jobs in the prewar period.225 Between 43 percent increase above the estimate of US$10.9 February 2022 and end-2022, the number of active billion reported in RDNA2 as of February 24, 2023.230 enterprises fell by 15 percent, to about 760,000 Most of the damage (83.6 percent) was to industry, entities; most (86 percent) were micro or small with the rest to commerce. About half of the damage enterprises, with fewer than 50 employees.226 Based (56.0 percent) occurred to large and medium-size on the 2021 Labor Force Survey, wholesale and retail enterprises, both public and private (US$8.8 billion). trade employed the largest share of workers, with Roughly half of the damage estimate for those firms agriculture and industry as runners-up.227 Evidence (US$4.2 billion) was due to the destruction of two shows that the war impacted Ukraine’s private sector steel plants in Donetska oblast, the Azov Steel Plant in two main ways: first, through demand shocks, and the Ilyich Iron and Steel Works in Mariupol. which were driven by reduction in consumer spending According to a recent survey,231 21 percent of firms in and access to crucial export markets; and, second, commerce and industry have reported war-related through heightened uncertainty about sales outlook damage, and there has been an average 53 percent and through supply shocks, which encompassed drop in sales across firms of all sizes. Almost half damage and asset theft, input shortages, logistical of firms in eastern Ukraine and slightly less than disruptions, and limited access to financing.228 Some a third in southern Ukraine reported war damage; firms have been relocating from the war-affected these firms also experienced the largest drop in regions; firms in the commerce sector (wholesale sales (70 percent in the east and 63 percent in the trade) account for 44 percent of relocated firms.229 south). By contrast, the west saw only a 39 percent drop. The largest shares of damage were reported in Donetska, Kharkivska, and Kyivska oblasts, where there is military activity and a high concentration of manufacturing firms. 224 Industry, as defined by this chapter, covers manufacturing (including agro-processing) and services not covered elsewhere in the report. Services related to culture, tourism, finance, and creative industries, such as hotels, tour operators, and advertisers, are excluded. Restaurant and food services are included under commerce and industry. Commerce covers wholesale and retail trade and warehousing. 225 State Statistics Service of Ukraine (SSSU), 2021 data. 226 SSSU data. Of the 763,000 firms, almost half were not classified by size in the data, but most are likely individual entrepreneurs or small firms. 227 SSSU, “Labor Force of Ukraine 2021: Statistical Publication,” 2022, Link. 228 World Bank, “Ukraine: Firms through the War,” November 2023, Link. 229 Opendatabot, “7820 Companies Have Moved across Ukraine Since the Beginning of the Full-Scale Invasion,” November 30, 2023, Link. About 10 percent of relocations were financed by the government relocation program; see Prozorro, Link. 230 Data for damage and losses were primarily provided by the Kyiv School of Economics. For RDNA3, damage estimates rely on comprehensive regional data coverage, while only 14 out of 25 regions were covered in RDNA2. 231 World Bank, “Ukraine: Firms through the War,” November 2023, Link. 114 PRODUCTIVE SECTORS Total losses across commerce and industry reached war-induced displacement and damage hit internally about US$173.2 billion (Table 28), estimated for displaced women the most; less than a third of such 40 months ending June 30, 2025. Losses were women remained employed or secured a new job.236 calculated using an updated methodology;232 as Overall, enterprises in commerce and industry firms’ financial reports and official statistics for 2022 experienced labor shortages, with 46 percent of became available, the analysis was recalibrated industrial enterprises mentioning labor shortages using actual data covering the first 10 months of among their main challenges.237 the war. Actual sales data for 2022 for commerce and industry were used to calculate revenue losses and adjusted using the difference in IMF’s growth Recovery and Reconstruction Needs, scenarios for Ukraine with and without the war. including Build Back Better Prewar intermediate consumption coefficients were used to estimate value added and net out inter- Total recovery and reconstruction needs for the industry gross sales double-counting. Losses also commerce and industry sector are US$67.5 billion, include agreed estimates for demolition and debris estimated until 2034 (Table 29).238 Reconstruction removal, calculated based on the damage. Total needs for infrastructure and assets under a build losses are about US$116.9 billion for industry and back better approach are estimated in total at about US$59.2 billion for commerce. Enterprises in US$20.7 billion (Table 29). This means that 31 the Kyivska, Dnipropetrovska, and Donetska oblasts percent of the estimated needs for this sector are for (hosting large numbers of industrial enterprises and rebuilding and modernizing buildings, equipment, commerce entities) experienced the largest losses and inventory. In line with the damage and losses, (accounting cumulatively for more than 60 percent the largest needs are in Kyivska, Donetska, and of the aggregate losses for the sector). Missile Dnipropetrovska oblasts. Some firms were able to attacks targeting Ukraine’s power grid caused daily recover by adapting their processes to the more electricity blackouts, which had significant economic challenging business environment—specifically impacts,233 particularly hurt sales in the sector. by using digital tools, embracing supply chain Around 15 percent of all firms and up to 20 percent optimization techniques, and targeting new clients. of manufacturing firms experienced power outages.234 In the commerce and manufacturing sectors, around 17 percent and 15 percent of firms, respectively, The human impact in the sector relates to loss of incorporated new technology and processes into income and jobs, displacement of people, worker their supply chain management techniques and shortages, and service in the military. According to operations. Some shops and retail stores have the International Labour Organization,235 2.4 million recovered to higher levels of sales, although not jobs, or 15.5 percent of the total, were lost in 2022. necessarily to prewar levels; lack of reliable data, Firms in construction, manufacturing, and commerce however, makes it impossible to quantify the extent saw the most significant drops in employment to which sales recovery has contributed to repair and levels (reductions of 36 percent, 23 percent, and rebuilding efforts. Therefore, the build back better 21 percent respectively). Unemployment caused by coefficient for commerce is slightly lower than for 232 The updated methodology, which partly explains the increase in losses since RDNA2, allowed for much more comprehensive and granular geographical coverage of data than RDNA2, and it used firms’ actual financial statements instead of estimated ones. Using firms’ financial reports and official statistics for 2022, revenue losses in the sector were recalculated for the first 10 months of the war, and the results were adjusted using the difference in IMF’s growth scenarios for Ukraine with and without the war. The estimates for the two different growth trajectories were based on the economic growth forecasts by the IMF before the war (the World Economic Outlook of October 2021) and on the updated growth trajectories (World Economic Outlook of October 2023). The commerce and industry income growth for both scenarios were estimated, and then the difference between the two for the period of 40 months (ongoing war plus next 18 months) was adjusted to net out inter-industry double-counting and focus on value added based on prewar intermediate consumption coefficients. 233 O. Blinov and S. Djankov, “The Economic Toll of Attacks on Ukraine’s Power Grid,” Vox.EU, December 21, 2022, Link. 234 World Bank, “Ukraine: Firms through the War,” November 2023, Link. 235 International Labour Organization “Care at Work in Ukraine” Brief, November 2023. 236 InfoSapiens, “Research on the Economic Activity of IDP Women and Their Strategies Regarding the Restoration of the Source of Income,” June 16, 2023, Link. 237 Institute for Economic Research and Policy Consulting “Ukrainian Business Throughout the War (December 2023) 20th Monthly Survey of Ukrainian enterprises”, Link  238 Needs estimates for RDNA3 are a function of damage and losses estimates, and rely on the improved data coverage (for both damage and losses) and updated methodology (for losses). PRODUCTIVE SECTORS 115 industry, 1.2 versus 1.3, as the outdated industrial (12 percent).240 Although firms have been resilient, assets that were damaged or destroyed need to effective and efficient private sector support be rebuilt according to the latest technologies and policies and programs will remain crucial drivers green standards. Needs to restore service delivery of the recovery. These will need to focus on access and to build back better have increased in line with to finance and business advisory on market access, the losses; they total US$46.8 billion—US$16.4 billion sustainable firm capabilities upgrading, and in the short term and US$30.4 in the long term— productivity increases through digitalization. Firms and include demolition and debris removal costs. identified three primary areas requiring increased The more comprehensive damage data in RDNA3 public support: financial assistance, regulatory and the revised methodology for estimating losses improvements, and market access. Larger firms (see footnote 8) help to explain the increased needs expressed a greater need for credit and grants to estimates in RDNA3. rebuild their damaged assets. Overall, the war has had diverse negative effects Revitalizing the commerce and industry sector is a on businesses and Ukraine’s private sector. These priority, given that millions depend on this sector effects are due to several factors: disruptions in for their livelihoods, and given its contribution accessing domestic and international markets, to critical needs during reconstruction, such as curtailed access to finance, interruptions in construction, food industry businesses, and key the supply of essential resources, inadequate manufacturing. Ukraine’s economic recovery is demand, and increased uncertainty. The extent of dependent on harnessing the dynamism of the these impacts varies depending on firms’ sector, private sector, and its multiplier effect, to sustain location, market presence, and size. Firms in an export-led growth, contribute to job creation, the main active war zones in the east and south innovation, and overall sustainable development. On experienced the most significant damage. Financial average, 31 percent of firms would like to receive difficulties affected approximately 84 percent of access to new credit for investments or working firms, hampering sales, investment, and jobs. The capital. Grants to rebuild destroyed assets are collapse of Ukrainian exports was related to the requested by 17 percent of large firms as opposed to closure of the Russian market and to disruptions only 9 percent of small firms. Assistance to access in critical trade and logistics hubs. Three-quarters new markets, on the other hand, is more relevant to (75 percent) of exporters experienced supply chain small and medium enterprises (SMEs) than to large disruptions. Approximately 43 percent of firms that firms (31 percent and 33 percent vs. 26 percent). Tax closed temporarily or permanently cited insufficient exemptions are a priority for 67 percent of firms in demand as the main reason. Increased uncertainty hospitality, while access to new credit is a priority linked to the war further dampened employment for businesses active in commerce (42 percent). (-25 percent) and investment. Overall, throughout Grants to rebuild destroyed assets are a top priority 2023, two-thirds of industrial enterprises have for firms in the east (27 percent) and less relevant been operating at 75 percent of capacity or higher elsewhere (12 percent or below in other regions). (including 12 percent operating at full capacity) in the territories remaining under government control.239 The following are priority recommendations to support commerce and industry in the short term:241 At the same time, Ukrainian firms that continued operation after the invasion have adapted their • Provide financial support to firms in the form of business strategies proactively and resiliently. loans, grants, and guarantees to allow viable firms They have sought new customers and markets to survive, relocate if needed, and reconstruct and (34 percent), leveraged digital tools (41 percent), modernize assets; and to allow the emergence changed their product/services mix (17 percent), of new entrants, in particular small businesses and adopted supply chain optimization techniques owned women, displaced persons and veterans. 239 Based on a survey of 535 enterprises in industry and retail sector; see Institute for Economic Research and Policy Consulting (IER), “The Economic Trends and Expectations in December 2023,” 20th Monthly Enterprise Survey, January 2024, Link. 240 World Bank, “Ukraine: Firms through the War,” November 2023, Link. 241 While the recommendations provided in the main text represent equally important short-term priorities, it would be crucial to institutionalize a policy prioritization mechanism based on consensual and clear criteria. To this end, preliminary guidelines and prioritization criteria are provided in the report of the World Bank “Ukraine: Firms through the War,” November 2023, Link. 116 PRODUCTIVE SECTORS • Provide financial support to high-value • Build technical assistance capacity to identify manufacturing and agroindustry, and export- projects with high private capital mobilization oriented enterprises in the form of loans, grants, potential, and with significant multiplier effects and guarantees. beyond initial investment. • Devise and deploy de-risking instruments and • Ensure private sector participation in financial support to improve interest rates reconstruction efforts and promote linkages affordability across all sectors. with SMEs in priority sectors for recovery and investment, such as construction, transport, and • Promote project finance and development finance logistics. (both for capital expenditure and working capital), as a way to catalyze equity investments as well. • Design market-enhancing programs to boost domestic demand for local goods and services. • Enhance the financial and institutional capacity of public institutions to mobilize private investments Investments should seek to build back better, (through PPPs, industrial parks, larger strategic emphasizing green and digital technologies to build investments, and others). resilient businesses with products and processes aligned to EU standards. Financial support to firms, • Boost war-risk insurance and increase risk including efforts to facilitate access to credit, should coverage for new investments. also continue. While support to SMEs remains vital as they constitute the backbone of the economy, • Support the retraining and upskilling of labor to larger more capital-intensive investments in key address skills required by businesses to access industries (such as green metallurgy, machine new markets. building, pharmaceuticals, etc.) should also be encouraged through de-risking instruments and co- • Update eligibility criteria, in line with good financing facilities with donors backing. Addressing international practice, for co-financing of capital- business, investment, and trade climate obstacles intensive projects. that were present before the war—related to trade harmonization with the EU, competition • Enhance the financial and institutional capacity issues, and state-owned enterprise (SOE) reform— of public institutions to generate a pipeline should be a priority. Direct technical assistance, of investment projects and new business potentially focused on sectors critical to growth opportunities through technical assistance and like agribusiness, metallurgy, machine building, feasibility studies. and IT, could help firms enter new markets, move into higher-value-added products, and adapt more • Help firms access new markets with tools to meet sustainable practices. Firms owned and managed standards in international markets, ease customs by women could be targeted for financial and constraints, facilitate international partnerships nonfinancial support. and learning, and expand the availability of trade finance and insurance instruments. 2024 Recovery and Reconstruction • Rebuild the logistics infrastructure needed for Priorities access to inputs and markets. Priority recovery and reconstruction needs in • Streamline business regulations and tax 2024 for firms in the industry and commerce requirements to make it easier to start and sector are estimated at US$5.8 billion (Table restart businesses and to enter into new product 30).242 Priority recovery and reconstruction needs lines and delivery models. include financing for investments in new equipment, improved processes, repair of buildings, creation of • Facilitate domestic and foreign investment to new businesses to stimulate job creation, as well as rebuild key industries. working capital. Most firms, even those that suffered no physical damage, have seen revenue fall due to disrupted infrastructure and electricity blackouts, 242 Data sources and methodology for estimates are listed in the note to Table 30. PRODUCTIVE SECTORS 117 contracting domestic markets due to emigration, priority instruments to expand coverage include and broken supply chains. The private sector has grants and matching grants, the e-Robota program, also incurred costs for service delivery restoration subsidized lending through the 5-7-9 program244, via introduction of new business strategies and lines of credit and other support from multilateral processes (e.g., digitalization), asset relocation and donors, and guarantees, reinsurance, and export other working capital needs, training and reskilling support programs through the Export Credit Agency of employees, and investments in quality standards and donor programs. Technical assistance will also and certifications to access new markets, including be essential to support the implementation of firm efforts to meet EU and other international standards. support programs and ensure that public-private Some firms, particularly in active areas of hostilities, partnership projects are ready for investment. may be trying to stay afloat and require only working capital, either because they have lost their workforce Alongside meeting urgent needs, it will be important or are facing huge uncertainty. Although firms will to build program and institutional capacity and raise bear the cost of most investments, public sector financing to enable successful programs to scale support is vital to help firms survive and make the up quickly should conditions enable an increase in investments needed to adjust to the new realities demand for private sector investment. Indicated as the war continues. Working capital financing will financing needs for support programs presented in also be a critical area of support to enable firms stay Table 31 reflect anticipated private sector demand afloat, as increased risks will continue to constrain for financing in 2024 alone. Should conditions on access to bank credit and dry up trade finance and the ground evolve to allow for increased private supply chain credit. investment, it will be important that financing is available to respond. Early engagement with donors Around US$3.1 billion of public support will be to secure funding commitments for 2025 should be needed to close the private sector financing gap part of a forward-looking financial planning strategy in the industry and commerce sector in 2024. to maintain momentum in the implementation of This support will help mobilize domestic financing, the programs launched in 2024. Among the various stimulate direct firm investments, and underpin instruments, the subsidized credit and insurance trade. The GoU has already committed more than support programs may be scaled up to meet the US$750 million from the state budget to support private sector demand, and the GoU has identified these financing needs; donor and multilateral up to US$ 4 billion in potential opportunities for sources of financing are sought for the remaining lines of credit to support investments in the short needs. The instruments identified in Table 31 term. Technical assistance to strengthen program are aligned with government priorities, but the institutional capacity will also be critical to facilitate majority of funding has yet to be secured. Firm disbursement and enable scale-up. support programs deployed by the GoU immediately after the invasion proved beneficial and could be revamped and rationalized. Only 8 percent of all Limitations and Recommendations for firms and 6 percent of SMEs participated in these Future Assessments programs, but participating firms performed better than nonparticipants in terms of sales and employee The definitions and assumptions used for the retention, showing the potential benefits of revamped commerce and industry sector are the same as SME support programs and of accelerating the those used in RDNA2. Industry, as defined by this adoption of climate and environmental standards to chapter, covers manufacturing (including agro- access the EU market. Firms also need support to processing) and services not covered elsewhere address their constrained access to finance. Bank in the report. Services related to culture, tourism, lending has been subdued as a result of the war— finance, and creative industries, such as hotels, tour performing corporate loans in UAH have declined operators, and advertisers, are excluded. Restaurant by 20 percent compared to prewar levels243—but and food services are included under commerce demand for financing remains high. Some 84 and industry. Commerce covers wholesale and percent of firms face constraints in accessing retail trade and warehousing. This chapter includes finance, in part because of high interest rates. The impacts on both public and private firms. 243 National Bank of Ukraine, “Financial Stability Report,” December 2023, Link. 244 Total needs for the 5-7-9 program are estimated at US$670 million for 2024, out of which approximately US$350 million will support firms in commerce and industry, and USD$320 million will support firms in agribusiness (reported under the agriculture chapter of the report). 118 PRODUCTIVE SECTORS This analysis faced the following limitations, assumptions used were based on financial which hopefully can be addressed in subsequent reporting and led to best estimates. analyses: • Losses were calculated based on sales losses. • A key recommendation is to establish an For large and state-owned enterprises, the sales electronic system for registering damage, losses likely did not cover the full scope of losses, repairs, and losses. The system would ensure since firms that did not suffer any physical a transparent and verified method for reporting damage likely still suffered economic losses damage and assist the government and donors in (e.g., from business disruptions due to electricity aiding those in need, including businesses. blackouts and missile attack warnings). Ideally, data for estimating losses in productivity and • Regional data were unavailable for some oblasts other indirect costs, like rental fees, could be that likely suffered from the war. collected for subsequent analyses. • For commerce, no regional breakdowns of • Sector breakdowns of small firms were not the data were available. An indirect method available and could not be indirectly estimated. (primarily based on housing damage estimates) was used to assign damage and loss proportions • Needs calculations were based on calculated based on the impacts on small firms, since most damage to the sector. Given the immense commerce firms are small. nationwide losses faced by this sector, these calculations may be underestimated. • Damaged assets and values were not available for most firms, especially smaller ones. The Table 28. Damage, loss, and needs by oblast (US$ million) Oblast Damage Loss Needs Cherkaska 6.5 2,144.0 560.3 Chernihivska 131.7 1,140.9 464.9 Chernivetska 0.0 210.0 38.6 Dnipropetrovska 294.2 28,689.5 8,060.9 Donetska 6,172.5 15,515.0 12,834.1 Ivano-Frankivska 0.0 3,210.6 803.7 Kharkivska 2,455.7 8,466.2 5,573.9 Khersonska 182.5 358.6 345.3 Khmelnytska 18.3 1,167.8 329.6 Kirovohradska 8.3 1,282.3 351.1 Kyiv (City) 445.7 9,145.7 3,189.0 Kyivska 2,588.7 61,858.3 19,968.0 Luhanska 662.3 462.3 1,026.1 Lvivska 26.5 4,593.3 1,235.7 Mykolaivska 755.6 3,506.5 2,052.8 Odeska 199.2 7,569.0 2,192.4 Poltavska 425.7 4,766.9 1,794.2 Rivnenska 0.4 1,076.7 276.5 Sumska 133.4 1,734.0 655.1 PRODUCTIVE SECTORS 119 Oblast Damage Loss Needs Ternopilska 0.5 851.7 220.5 Vinnytska 5.3 2,334.1 629.5 Volynska 0.0 1,868.5 475.8 Zakarpatska 0.2 925.1 225.9 Zaporizka 981.4 9,022.3 3,683.9 Zhytomyrska 106.2 1,275.7 480.2 Nationwide (no specific region) 41.4 6.6 62.5 Total 15,642.2 173,181.8 67,530.2 Source: Assessment team. Note: Damage covers 22 months of war between February 24, 2022, and December 31, 2023; loss covers a total of 40 months, which includes 22 months between February 24, 2022, and December 31, 2023, and an additional 18 months through June 30, 2025; needs cover the period 2024–2033. Table 29. Total recovery and reconstruction needs (US$ million) as of December 31, 2023 Category Types of activities/investments Total needs (2024–2033) Industry 17,656.2 Reconstruction needs Commerce 3,076.3 Service delivery Industry 29,020.5 restoration needs Commerce 17,777.3 Total 67,530.2 Source: Assessment team. Table 30. Estimated 2024 recovery and reconstruction priorities (US$ million)245 Types of priority activities/investments Estimated cost Investment a 4,208 Working Capital 1,602 Total 5,810 Source: Assessment team based on priorities defined by line ministries. Note: a includes debris removal and demolition costs. 245 Estimates of the short-term investment and working capital needs of the private sector for 2024 are based on the analysis of multiple data: (i) World Bank survey data on investment plans by firms (“Ukraine: Firms through the War,” November 2023, Link), (ii) official database with financial reports of 330,000 companies in 2021-2022 available at the government open data portal processed by the Kyiv School of Economics, (iii) GoU statistics reflecting demand trends for public programs supporting small and medium enterprises, (iv) pipeline of priority investment projects ready for implementation in 2024 compiled by Kyiv School of Economics within the Project “Potential Investment Opportunities and Funding Mechanisms in Ukraine”, and (v) other available sources. Capital investment needs were estimated by merging the 2023 World Bank survey data on firms’ investment plans for the following 12 months, extrapolating results to the entire population of firms included in the official database with financial indicators of active companies in 2022, and then adjusting for the actual share of firms that invested in 2022. Working capital needs were estimated using the financial indicators included in the official database of active companies in 2022. 120 PRODUCTIVE SECTORS Table 31. Estimated public sector (GoU, IFIs, and donors) contribution to 2024 priorities (US$ million) Types of instruments Estimated total cost Grants and matching grants for business repair, modernization, etc.a 424 Subsidized lending through 5-7-9 programb (industry and commerce portion only) 350 Lines of credit/investment projects pipelinec 1,645 Support to exporting enterprises d 110 War risk insurance e 400 Technical assistance f 10 Other support programs (industrial parks, PPP facilities, local development programs, 175 investment nannies, etc.) g Total 3,114 Source: Assessment team in consultation with the Government of Ukraine. a. Based on the estimates of the Ministry of Economy (excluding US$13 million for horticulture, accounted under the agriculture chapter), adjusted for the 70 percent disbursement rate in 2023. b. Based on the estimates of the Ministry of Economy (excluding US$320 million for agriculture, accounted under the agriculture chapter), adjusted for the 98 percent disbursement rate in 2023. c. Based on two components: (i) the estimation of total demand for capital investment by firms, divided by the multiplier of the 5-7-9 credit program (based on the data of the World Bank project financing the program) to derive the needed public sector contribution to meet the overall demand for capital investments by firms; and (ii) the estimation of capital investment needs according to the pipeline of priority investments ready for implementation in 2024 (based on data from the Ministry of Economy). d. Based on estimates by the Ministry of Economy, adjusted for an expected 30 percent disbursement rate in 2024. e. Based on estimates by the Ministry of Economy, adjusted for an expected 50 percent disbursement rate in 2024. f. Based on estimates by the Ministry of Economy for technical assistance, including a PPP facility, with an estimated average preparation cost of US$500,000 per project for the pipeline of PPP projects for 2024. g. Based on estimates by the Ministry of Economy of the investment needs for industrial parks, PPPs, local development programs, and “investment nanny” projects, adjusted for an expected 20 percent implementation rate in 2024. PRODUCTIVE SECTORS 121 FINANCE AND BANKING Context Damage and Loss Assessment The Ukrainian financial sector has been The total cost of damage to the banking sector is significantly impacted by the war. Since February estimated to be US$20.8 million (Table 32). Damage 2022, the banking sector has accounted for US$2.9 was estimated using data on banks’ fixed assets (in billion of loan loss provisions for expected war- particular, bank premises and equipment), as well related credit losses,246 while the nonperforming as NBU’s bank survey on damage.248 Khersonska, loan (NPL) ratio has risen from 27 to 37 (as of Donetska, Kharkivska, Luhanska, and Zaporizka November 2023). About 82 percent of the sector’s oblasts, where active combat still continues, account NPLs are concentrated in state-owned banks (SOBs). for the largest amounts of damage. SOBs, which At the same time, the financial sector remains comprise 54 percent of net banking system assets stable, operational, profitable, and liquid, helped as of November 2023, account for 55 percent of by emergency measures and broader policies that damage. have generated substantial interest earnings and a rising deposit base. In Q4 2023, the National Bank The losses in the banking sector are estimated of Ukraine (NBU) successfully transitioned from to be US$5.7 billion (Table 32). Credit losses were an exchange rate peg to a managed exchange rate estimated at 25 percent of the prewar net loan regime. As a result, most banks continue to be well portfolio, which is the midpoint of the upper and capitalized; the capital adequacy ratio rose from 18 lower range estimates outlined in NBU’s Financial percent prewar to 21 percent as of end-2023.247 The Stability Report (FSR) for the second half of 2022.249 NBU’s 2023 resilience assessment of the 20 largest The estimate was lowered by 5 percentage points banks (accounting for over 90 percent of banking compared to RDNA2 based on the results of NBU’s system assets) shows that most banks adequately 2023 resilience assessment, which showed that assessed potential credit losses and provisioned most banks adequately assessed potential credit accordingly, though continued vigilance is warranted losses and provisioned accordingly. At the same given that the banking system’s true health remains time, additional provisions may be needed as opaque and that further shocks, including bank regulatory forbearance measures are phased nationalizations, remain a risk. While a newly out and (once conditions allow) the independent introduced windfall tax on bank profits is not likely asset quality review (AQR) is conducted. About 40 to have immediate negative impacts on financial percent of credit losses are attributed to SOBs, and stability, it will potentially impact banks’ ability to 45 percent of losses are attributed to the Kyiv city absorb losses if the situation deteriorates. The region (due to the specifics of registering enterprises nonbank financial institution (NBFI) sector is also in Kyiv). A third of credit losses were caused by likely to be suffering significant losses as a result of direct destruction of borrowers’ assets, while the the war (on top of prewar vulnerabilities), but data remainder are attributed to the economic impacts remain very limited. Given its small size, the NBFI of the war. The quantification of losses does not sector is not expected to have systemic impacts on recognize the inherent risks posed to recent gains the overall financial system. Since RDNA2, updated arising from reforms to the financial sector, which information shows that damage has increased include emergency measures to address risks slightly, while loss estimations have been reduced stemming from the war as well as the SOB strategic amid the results of NBU’s resilience assessment. framework; nor does it recognize the potential 246 This amounts to around 13 percent of the net loan portfolio the banks held at the end of February 2022, while the National Bank of Ukraine’s financial stability report for the first half of 2023 indicates that losses might reach 30 percent. 247 Since February 2022, seven banks have been declared insolvent, including two subsidiaries of Russian SOBs and five small private banks, together accounting for around 3.3 percent of banking sector assets. One systemic bank accounting for 3.1 percent of banking sector assets was nationalized on grounds of sanctions. 248 Data are from a bank survey conducted by NBU and are as of July 2023. 249 NBU, “Financial Stability Report,” June 2022, Link. 122 PRODUCTIVE SECTORS delays to further legislative reforms, which could there is a need for coordinated efforts by all financial occur given the need to address postwar problems market players—financial institutions, the NBU, the first. National Securities and Stock Market Commission (NSSMC), and the Deposit Guarantee Fund (DGF)— Human impact. Despite a series of cyberattacks and for effective support of public authorities, in and a period of deposit withdrawal in anticipation particular, the Ministry of Finance. of the invasion, the majority of bank branches have remained operational; online banking services are fully available to all clients with internet 2024 Recovery and Reconstruction connectivity; the noncash payment system is Priorities functioning normally; and liquidity has recovered for most banks. To ensure the continuity of the banking Recovery and reconstruction investment priorities network, in late 2022 NBU joined with banks to for 2024 are estimated at US$3.1 million (Table introduce so-called Power Banking,250 a network of 34). The reconstruction needs for 2024 relate to over 2,000 bank branches across the country that restoration of banking service infrastructure in the can provide banking services even during prolonged territories brought back under government control blackouts. However, access to credit has contracted (Chernihivska, Kharkivska, Khersonska, Kyivska, and due to banks’ tightened lending standards and the Sumska oblasts) as well as additional provisions for high interest rate environment. credit losses. In parallel to the investments listed in (Table 34), the principal recovery and reconstruction focus for 2024 includes the following activities: Recovery and Reconstruction Needs, including Build Back Better • Analyze the impact of the war on the financial sector (asset quality reviews). NBU will The financial sector’s total recovery and implement its resilience assessment of the 20 reconstruction needs are estimated at US$2.3 largest banks followed by independent valuation billion over 10 years (Table 33). A total of US$2.9 of banks’ assets when conditions allow. billion in war-related credit losses was already provisioned for in 2022 and 2023 and has been • Ensure the financial sustainability of the DGF. discounted from the overall needs. In addition, due The DGF should have sufficient funds to cover to the outcomes of the 2023 resilience assessment, insured deposits at banks with the highest the estimated percentage of overall war-related likelihood of becoming insolvent. credit losses has been reduced from 30 percent to 25 percent (compared to RDNA2) — the midpoint • Develop an NPL resolution action plan aimed between NBU’s baseline and adverse scenarios. at reforming NPL resolution mechanisms and Actual recapitalization needs can be determined create markets/mechanisms for distressed only after the independent AQR has been conducted. assets. For the financial sector to recover and drive the • Enhance efficiency in the banking sector, in part overall economic recovery, a series of measures by strengthening the SOB governance framework needs to be taken in different time frames. Financial with its majority-independent supervisory boards, sector policy reforms should focus on (i) preserving initiating preparations to revert to a prewar SOB financial stability and maintaining public confidence strategy, and reforming the underlying legal (in the short to medium term), (ii) strengthening framework for SOB privatization. readiness for resolution (short term), (iii) safeguarding and strengthening institutional frameworks as well • Strengthen the design of time-bound financial as capacity of the financial market regulators (short support programs that target affected to medium term), (iv) enhancing the financial sector’s borrowers and sectors using transparent contribution to addressing fiscal and private sector rules and governance mechanisms. Policy needs (short to medium term), and (v) aligning responses will need to minimize opportunities financial sector legislation with EU acquis (short to for moral hazard and rent seeking and to adhere medium term). To ensure financial stability during to sound credit risk management practices and the war and in the recovery/reconstruction phase, independent governance arrangements at SOBs, 250 NBU, “Power Banking: NBU-Initiated Joint Banking Network Power Banking Has Been Created, Will Even Work in Blackouts,” December 26, 2022, Link. PRODUCTIVE SECTORS 123 while also facilitating the effective allocation of secondary data where possible. As in RDNA1 and new credit. A special war insurance pool should RDNA2, the estimates are based on currently be developed and the Partial Credit Guarantee available information. More accurate estimates will Fund for small farmers operationalized. be available once financial sector health diagnostics are completed. Moreover, as indicated above, the quantification of losses does not recognize the Limitations and Recommendations for inherent risks posed to the recent gains arising from Future Assessments reforms to the financial sector, such as temporarily applied relaxation of prudential rules and changes to This financial sector needs assessment is based on the SOB strategic framework; nor does it recognize a wide range of inputs and data from such sources the potential delays to further reforms as a result of as NBU and surveys of financial sector institutions. the need to address postwar problems first. The assessment also uses expert opinions and Table 32. Damage, loss, and needs by oblast (US$ million) Oblast Damage Loss Needs Cherkaska - 45.0 18.0 Chernivetska 0.4 15.0 6.5 Chernihivska - 24.5 9.8 Dnipropetrovska - 226.1 90.4 Donetska 4.5 191.3 83.2 Ivano-Frankivska - 50.2 20.1 Kharkivska 3.4 933.9 377.6 Khersonska 5.8 201.6 87.4 Khmelnytska - 47.4 19.0 Kirovohradska - 30.7 12.3 Kyiv (City) - 2,547.2 1,018.9 Kyivska 0.6 40.0 16.7 Luhanska 2.9 33.9 17.7 Lvivska - 183.2 73.3 Mykolaivska 0.4 101.6 41.2 Odeska - 226.8 90.7 Poltavska - 58.6 23.4 Rivnenska - 27.8 11.1 Sumska 0.3 41.7 17.0 Ternopilska - 30.2 12.1 Vinnytska - 48.9 19.6 Volynska - 20.2 8.1 Zakarpatska - 22.0 8.8 Zaporizka 2.5 457.5 186.7 Zhytomyrska - 28.6 11.5 Nationwide (no specific region) - 74.9 - Total 20.8 5,708.8 2,280.8 Source: Assessment team. Note: Damage covers 22 months of war between February 24, 2022, and 31 December 2023; Loss covers a total of 40 months, which includes 22 months between February 24, 2022, and December 31, 2023, and an additional 18 months until June 30, 2025; needs cover the period 2024–2033.  124 PRODUCTIVE SECTORS Table 33. Total recovery and reconstruction needs (US$ million) as of December 31, 2023 Category Types of activities/investments Total needs (2024–2033) Stated-owned banks 15.6 Reconstruction needs Private banks (domestic and foreign banks) 12.4 Service delivery Stated-owned banks 825.5 restoration needs Private banks (domestic and foreign banks) 1,427.2 Total 2,280.8 Source: Assessment team. Table 34. Estimated 2024 recovery and reconstruction priorities (US$ million) Types of priority activities/investments Estimated cost Restoration of banking service infrastructure Stated-owned banks 1.5 in territories brought back under government control Private banks (domestic and foreign banks) 1.6 Stated-owned banks TBD a Additional recapitalization needs Private banks (domestic and foreign banks) TBD a Total 3.1 Source: Assessment team based on priorities defined by line ministries. Notes: a. NBU’s 2023 resilience assessment found that most banks adequately assessed potential credit losses and provisioned accordingly. Banks were able to offset losses mainly with operational profits. At the same time, there may be additional provisions and related recapitalization needs stemming from a possible deterioration of the macroeconomic situation as well as the upcoming independent AQR. 125 INFRASTRUCTURE SECTORS Agency for Restoration under the Ministry. 126 INFRASTRUCTURE SECTORS ENERGY AND EXTRACTIVES251 Context Dnipro, Zaporizhzhia, Kryvyi Rih, Kherson, Mykolaiv, Odesa, and Izmail. During the summer months of 2023, the attacks across other Ukrainian regions Since February 2023, the energy sector has were fewer. Attacks renewed during the 2023–2024 sustained continued attacks on its infrastructure. heating season. These factors are reflected in In the period covered by the RDNA1, the energy the changes in the damage and losses, especially sector suffered war-related (though mostly between March and December 2023. collateral) damage; however, intensified attacks on energy infrastructure beginning in early October Before February 2022, the energy sector played a 2022 caused extensive damage across the country, key role in Ukraine’s economic growth as well as as recorded in the RDNA2. Since then, Ukraine’s its national security, and increasingly supported energy infrastructure has suffered multiple attacks, the government’s goal of modernizing the and energy companies have suffered cyberattacks. economy. The energy supply sector represented 7–8 The attacks have resulted in significant damage to percent of GDP,254 with gas transit fees from Russia Ukraine’s integrated energy system, including power representing about 0.3 percent of GDP.255 The entire generation and transmission infrastructure. During population had access to electricity, and 94.9 percent the period covered by RDNA3, the destruction of had access to clean fuels for cooking.256 Central the Kakhovka hydroelectric power plant (HPP) dam heating had high penetration (about 47 percent), also had severe effects, causing substantial harm particularly in the bigger cities. The gas distribution to the energy sector and the Khersonska region in network covered 74 percent of the population,257 and particular.252 The report by the GoU and the United 89 percent of the population had access to clean Nations provides more specific details on the water, thanks to pumped water distribution systems. destruction of the Kakhovka HPP dam, including quantification of the damage.253 Throughout 2023, regular intense attacks on infrastructure occurred Damage and Loss Assessment across all of Ukraine. Eastern and southern regions were more affected due to their proximity to the Damage as of December 31, 2023, is estimated at frontline, which runs from Kharkiv to Kramatorsk, US$10.6 billion (Table 35); this excludes damage 251 In RDNA3, the energy sector assessment does not include district heating, which is considered under the municipal assessment. Where the current chapter cites energy sector figures from RDNA2 and RDNA1, these figures include district heating. Also note that under RDNA3, not all damage is recorded and assessed. Please refer to the limitations section below. Extractives refers to energy-related industries, noting limitations in data collection and assessment as noted in the chapter. 252 The values of the damage and the needs related to Kakhovka HPP are included in the RDNA3 report based on the values provided by the Ministry of Energy and Ukrhydroenergo. This is an indicative level required to restore the power capacity as a whole, and not an endorsement of the decision on Kakhovka’s dam restoration. This decision is very sensitive and requires an environmental impact assessment to address environmental concerns, a better understanding of its potential impacts on the environment, and an assessment of alternatives for rebuilding the power generation capacity. 253 See GoU and UN, “Post-Disaster Needs Assessment: 2023 Kakhovka Dam Disaster, Ukraine,” 2023, Link. 254 National Institute for Strategic Studies under the Office of the President of Ukraine, “Determination of the Level of Energy Security of Ukraine,” 2023, 35, Link. 255 Gas transit via the territory of Ukraine has undergone substantial changes since independence. The construction of pipelines (Blue Stream in 2003, Nord Stream 1 in 2011, and TurkStream in 2020), gas disputes between Ukraine and Russia, and the development of the liquefied natural gas market have all served to reduce gas transit through Ukraine over the last few years. 256 World Health Organization, “Proportion of Population with Primary Reliance on Clean Fuels and Technologies for Cooking (%),” Link. 257 State Statistics Service of Ukraine data. INFRASTRUCTURE SECTORS 127 to the district heating sector, which is estimated contraction, and poverty increase. These losses at almost US$2.1 billion.258 In comparison, as of are also combined with the decrease in collection February 24, 2023 (under RDNA2), the total was rates (mainly in the regions close to the front line260). estimated at above US$10 billion (including estimated The losses (partly quantified so far) include the damage to the district heating sector of about US$1.2 losses from the following sectors: the power sector billion); as of June 1, 2022 (under RDNA1), damage (US$31.97 billion), the gas sector (US$8.11 billion), the was estimated at US$2 billion. The majority of the fuel oil sector (US$7.74 billion), and the coal sector damage reported in RDNA3 occurred during the (US$6.09 billion). The remaining amount is the cost period covered by RDNA2. However, the continuing for debris removal/demolition (US$0.136 billion). attacks have increased both damage and losses. Significant damage was caused by destruction of Human impact. Concerning human impact in the the Kakhovka HPP and its dam. New information has sector, the attacks on Ukraine’s energy system have also been collected that specifies damage incurred resulted in civilian suffering and general economic in the energy sector in the preceding periods covered attrition.261 The deprivations caused by unreliable by RDNA1 and RDNA2. access to electricity are highly disruptive to civilian life.262 For some households and businesses, private The largest share of damage is in the power sector: investments in distributed power generation, mainly US$7.5 billion (versus US$6.5 billion in RDNA2). from small diesel generators, have offered partial Within the power sector, the largest contributor to short-term relief.263 Attacks on energy infrastructure damage is the generation segment at US$4.9 billion affect civilian life across the country and can (versus US$3.9 billion in RDNA2), followed by the wreak regionally concentrated civilian suffering. transmission segment (US$2.15 billion versus about For example, the destruction of the Kakhovka US$1.9 billion in RDNA2). Damage to the power Dam necessitated the evacuation of thousands of distribution sector is estimated at about US$430 civilians.264 million (versus about US$404 million in RDNA2), though this does not include assets in territories temporarily not under GoU control. Estimates of Recovery and Reconstruction Needs, damage to the gas sector are at US$1.3 billion (versus including Build Back Better US$1.2 billion estimated in RDNA2). Damage to the oil sector, including oil refinery facilities, fuel depots, The total recovery and reconstruction needs are and fuel stations, is estimated at around US$1.7 estimated at US$47.1 billion over 10 years (Table 36). billion (the same level as for RDNA2). Damage to the This amount includes US$40.4 billion necessary to coal and mining sector could not be newly estimated rebuild the power generation sector, based on green because there is a lack of information from the transition principles and following the agreements mines located in territories temporarily not under with the EU, once the war ends. The regions with the GoU control; RDNA1 figures are used for this sector. largest estimated needs are Zaporizka, Kharkivska, and Donetska oblasts. The overall geographical Estimated war-related revenue losses in the distribution of the needs is presented in Table 35. power, gas production, gas transit, coal mining, and fuel oil sectors exceed US$54 billion (Table 35), Some needs have already been met. The total amount compared to US$27 billion estimated by RDNA2.259 of the met needs is US$1.73 billion in disbursed The revenue losses are linked to regular attacks on amounts and US$3.19 billion in the commitments energy infrastructure, displacement of a significant received. Examples of the needs that have been met part of the Ukrainian population, economic include repairing and replacing damaged power 258 In RDNA3, the energy sector assessment does not include district heating, which is considered under the municipal assessment. 259 The losses were estimated by comparing the level of production and revenues in 2021 and 2022 and taking into account the production decreases caused by the war. 260 UA Energy, “The Communal Debts of Ukrainians Are Growing: What Should the Heating Workers Do? [Комунальні борги українців зростають: що робити тепловикам],” March 17, 2023, Link. 261 J. Yaffa, “The Impact of Russian Missile Strikes on Ukraine’s Power Grid,” The New Yorker, February 20, 2023, Link. 262 J. Horncastle, “Russia Is Using Drones to Target Ukrainian Electricity and Erode Morale,” The Conversation, January 16, 2023, Link. 263 R. Olearchyk, “Ukraine Braced for Attacks on Its Power Grid as Winter Draws In,” Financial Times, November 2, 2023, Link. 264 A. Binley and P. Adams, “Ukraine Dam: Thousands Flee Floods after Dam Collapse Near Nova Kakhovka,” BBC, June 7, 2023, Link. 128 INFRASTRUCTURE SECTORS transmission equipment, constructing protective adoption of the REPowerEU approach to increase infrastructure (such as building protection energy security. To meet this last goal, Ukraine should against drones and missiles) to safeguard energy focus on (i) diversifying gas supply and promoting infrastructure, building transmission connections, green gases and electrification when economically installing STATCOMs (devices that help regulate feasible; (ii) accelerating decarbonization of the voltage) required in line with the measures power sector and implementing a just transition determined by ENTSO-E (European Network of roadmap toward renewable energy generation; Transmission System Operators for Electricity), and (iii) boosting energy efficiency in demand repairing hydropower plants, installing distributed sectors (housing, industrial, transport). Building on generation facilities, financing procurement for the advances in digital development before and during heating season, and more. the war, the reconstruction should take advantage of opportunities and synergies to decarbonize and Given the necessity of balancing short-term needs digitalize the energy sector, thereby increasing its with long-term goals, Ukraine must focus first resilience to cyberattacks and natural hazards. on policies that minimize fiscal liabilities in the These policies will also help attract support from sector, catalyze external financing, and enhance donors, financiers, and investors to accelerate the transparency and internal implementation restoration and reconstruction. capacity. It must not allow short-term emergency and recovery actions to impede progress on long- term international climate commitments and EU 2024 Recovery and Reconstruction accession requirements. Priorities Balancing short-term energy needs with long- The RDNA2 identified priority needs totaling term goals is very difficult in a context of high US$3 billion for the year 2023. In 2023, the GoU uncertainty. In the recovery phase, basic energy secured financing and initiated implementation and utility services must be restored as quickly as of projects across multiple areas. The identified possible, enabling the return of internally displaced commitments for 2023 totaled US$3.2 billion. As of persons—even if Ukraine’s population and its spatial the same period, US$1.8 billion had been disbursed, distribution will differ from what they were prewar. which is equivalent to 54 percent of the identified However, energy policy decisions made during 2023 priorities. The gap in disbursement can be recovery could impact long-term economic, energy explained mainly by the time necessary (and lags) security, and climate objectives. The postwar context between funding mobilization, procurement, and will present an opportunity to rethink energy sector implementation works, resulting in later payments priorities in Ukraine, while also balancing the need and disbursement rate smaller than planned. for fast provision of enabling services with the need Concerning amounts committed and disbursed, the to build back better. The latter should also be aligned energy sector has seen the most significant recovery with systematic implementation of energy efficiency efforts in the following areas: (i) developing protection measures as part of the large-scale reconstruction structures for key power grid infrastructure; (ii) that will occur across all sectors, public and private, arranging restoration and emergency supply of including households. Careful planning will be equipment for the power transmission sector required to ensure no-regret investments, and operator (TSO); (iii) securing gas purchasing for the institutional processes will need to be simplified heating season; and (iv) constructing new small- to attract financing flows from different public and scale/distributed generation. Other areas for which private sources. Any planning advanced during commitments were received and implementation the war period will likely require adjustments and work started include the installation of STATCOMs to reconsideration during the recovery phase. enhance import-export operations of electricity and restoration of large HPPs, among others. During the reconstruction phase, Ukraine will need to adopt a build back better approach with policies Recovery and reconstruction priorities for 2024 that align its energy model with the EU energy are estimated at about US$2.7 billion (Table policy and move toward a decarbonized economy. 37). This amount takes into account the priority Decarbonization efforts are critical to meet the needs, absorption capacity from the previous year, requirements under the EU accession and to increase disbursement rate of the committed amounts, energy security. Critical reforms will include the fundraising circumstances, and other related transposition of the Clean Energy Package, correction factors. Overall, 2024 recovery and reconstruction of institutional and market-related breaches, and the investment priorities include US$1.24 billion for the INFRASTRUCTURE SECTORS 129 power sector, US$0.68 billion for the gas and oil • The gas sector does not include damage in the sector, and US$0.74 billion for liquidity needs related gas production sector. If the GoU provides data on to gas purchasing and electricity import. this category, damage could be quantified. Beyond the RDNA recovery and reconstruction • The coal mining sector was not quantified in projects identified above, the government has detail due to the lack of data. identified around US$3 billion in additional 2024 priorities265 to support economic growth and • Capture of energy extractives data requires modernization: setting up a nodal agency to collect data from the private and public, sector to triangulate and • To ensure sufficient generation capacities for carry out the validation of the data as an ongoing economic development, the government plans process throughout the year. In addition, there is to complete the construction works on one of a need for a mechanism to ascertain and capture Energoatom’s units and start new construction data for damage and losses in temporarily under previously agreed contracts. The total occupied territories and in territories very near cost for this work is US$8.89 billion, while the to the battle zone. estimated cost for 2024 is US$2 billion. The assessment includes a range of assumptions • To achieve comprehensive modernization of in addition to the general RDNA assumptions of Ukraine oil refinery production, a project led by geographic scope and timeline: the Naftogaz Group is planned. The total cost of this project is US$2.5 billion, with an estimated • Damage includes damage in territories fully or US$281 million needed for 2024. partially controlled by the GoU and in territories temporarily not under government control. • Finally, regarding the construction of high- Damage for distribution system operators is level protection for substations, the GoU has provided only for territories controlled by the estimated total need of around US$2.1 billion to GoU. Damage in territories temporarily not under be implemented in the short to medium term. government control is estimated if possible and US$300 million is included in the priority needs based on information from the government and for 2024 since this funding is expected to be other sources on actual damage to facilities. secured and disbursed; an additional US$700 Assets in territories temporarily not under million could be committed during 2024. government control are not considered as definitely lost unless there is certainty that they have been completely destroyed. Limitations and Recommendations for Future Assessments • Damage quantification in the power sector is estimated as replacement cost (with similar The main shortcoming of the current analysis equipment quality). is that it is based on limited information of some subsectors and regions: • Power generation damage is based on conservative assumptions and fragmented • Power sector damage estimates in areas not information—damage to thermal power plants controlled by the GoU are inaccurate. In areas may be larger than estimates. Some assets have partially controlled by the government, the been damaged and repaired multiple times. accuracy of estimates varies. Full estimation of power sector damage in areas not fully controlled • The transmission damage is calculated based by Ukraine should be done at a later stage. on estimates from Ukrenergo that combine preliminary and actual estimates. The former • The power TSO data are aggregated at the apply until the end of hostilities and are based on country level due to the extra sensitivity of the available information from technical personnel information. (witnesses) on the asset’s condition, degree of damage, and possibility of recovery. The latter are 265 Due to confidentiality reasons and the innovative nature of some of these projects the Bank cannot fully validated validate the cost estimates for this projects nor its implementation plan. 130 INFRASTRUCTURE SECTORS based on actual inspection, technical inspection, • The quantification of the fuel oil sector is based and full inventory in areas controlled by Ukraine on estimations provided by the Kyiv School where inspections are feasible. Ukrenergo has of Economics, complemented by additional operational data on damage to the network and modeling by the World Bank. With additional data, inspects and repairs damaged assets. these estimates should be refined and verified at a later stage.  • Given the limitations on data sharing, direct detailed information on damage to most of • Where possible, damage to assets in areas the power distribution networks could not be temporarily not under government control has obtained. In the future, the actual extent of been estimated assuming partial damage instead damage will have to be assessed, and a power of 100 percent damage. The degree of damage sector model will be needed to refine the needs should be better quantified at a later stage. estimates. • It is important to note that the indicated total • Damage in the gas transmission sector is needs are preliminary and that after the war estimated using the book value provided by the ends more detailed studies and quantification will gas TSO and adjustments to derive indicative be required, in particular for the regions close to market-based replacement costs. The values are the front line or currently not under government preliminary and will need to be specified after the control. war ends or when the security situation allows. Table 35. Damage, loss, and needs by oblast (US$ million) Oblast Damage Loss Needs Cherkaska 0.0 - 0.0 Chernihivska 30.3 - 58.0 Chernivetska 0.0 - - Dnipropetrovska 150.2 - 135.8 Donetska 811.8 - 332.8 Ivano-Frankivska 0.1 - 0.1 Kharkivska 221.1 - 403.1 Khersonska 303.0 - 48.8 Khmelnytska 5.0 - 0.1 Kirovohradska 12.2 - - Kyiv (City) 34.5 - 77.9 Kyivska 111.1 - 149.7 Luhanska 322.0 - 113.4 Lvivska 48.9 - 46.1 Mykolaivska 108.3 - 175.2 Odeska 22.7 - 22.8 Poltavska 32.5 - 52.5 Rivnenska 13.2 - - Sumska 77.4 - 130.3 Ternopilska - - - INFRASTRUCTURE SECTORS 131 Oblast Damage Loss Needs Vinnytska 17.5 - 24.4 Volynska 6.5 - 0.6 Zakarpatska 179.5 - 322.1 Zaporizka 1,132.9 - 765.2 Zhytomyrska 14.6 - 4.1 Nationwide (no specific region) 6,947.7 54,040.3 44,212.9 Total 10,603.0 54,040.3 47,076.0 Source: Assessment team. Note: - = not assessed. Damage covers 22 months of war between February 24, 2022, and December 31, 2023; loss covers a total of 40 months, which includes 22 months between February 24, 2022, and December 31, 2023, and an additional 18 months through June 30, 2025; needs cover the period 2024–2033. Table 36. Total recovery and reconstruction needs (US$ million) as of December 31, 2023 Category Types of activities/investment Total needs (2024–2033) Power sector reconstruction, including transmission system operator, distribution system operators, power 40,410.6a generation facilities Gas transportation system reconstruction, including gas Reconstruction transmission system operator and distribution system 2,950.6 Needs operators Fuel oil sector reconstruction, including oil refinery facilities 3,394.8 and distribution networks Coal mining sector (urgent closure works on flooded mines, 320.0 currently not under government control) Service Delivery Electricity import liquidity needs - Restoration Needs Gas purchasing liquidity needs - Total 47,076.0 Source: Assessment team. Note: - = not assessed. a Renewable energy will require 74 percent of the total amount, which is approximately $29.8 billion for hydro, wind, and solar sectors. Table 37. Estimated 2024 recovery and reconstruction priorities (US$ million) Types of priority activities/investments Estimated cost Power sector 1,240 Gas sector 241 Oil sector 435 Gas purchasing 540 Electricity import 200 Total 2,656 Source: Assessment team based on priorities defined by line ministries. 132 INFRASTRUCTURE SECTORS TRANSPORT Context Polish road border crossing points (BCPs)—at one point more than 3,000 trucks queued on the four Since the completion of RDNA2 in February 2023, border crossings in the direction to Ukraine— has the context for transport sector damage in Ukraine caused significant delays and losses.267 has remained relatively stable, as the intensive Almost two years after the invasion of Ukraine, military operations have been mostly contained Ukraine’s transport sector institutions are along the steady front line in the east and south demonstrating a high degree of resilience, of the country. Although no significant territories specifically in maintaining and repairing transport were returned to government control during infrastructure. Key recovery efforts since the start 2023, transport networks have been continuously of the war were aimed at restoring the basic road exposed to movements of heavy weaponry and and rail connectivity in the territories returned to supply vehicles. In addition, transport infrastructure government control, with the largest concentrations has continued deteriorating due to very limited of recovery efforts in Kharkivska, Chernihivska, maintenance beyond repair of damage. Kyivska, and Sumska oblasts. Most road repairs Several major disruptions to the transport consisted of urgent measures to ensure connectivity; sector have occurred since February 2023: (i) the over 2,000 km of emergency repairs were made on shutdown of the Black Sea Grain Initiative (BSGI) motorways, highways, and other national roads. In in July 2023; (ii) the continuous intensive aerial addition, road and rail bridges and other railway strikes on port infrastructure in the Odeska and infrastructure were reconstructed: (i) 115 road Mykolaivska oblasts, including on Danube River bridges were restored with temporary structures, ports; and (iii) limitations to the Solidarity Lanes including 29 modular bridges donated by country Initiative caused by blockade of the Ukrainian- partners; (ii) 26 road bridges were repaired or newly Polish border by Polish truckers from November constructed; (iii) 46 rail bridges were repaired or 2023 till January 2024. The BSGI allowed newly constructed; and (iv) about 25 km of railways approximately 33 million tons of Ukrainian grain to lines were rebuilt (out of more than 50 km destroyed) be exported via Ukraine’s ports from August 2022 to and 769 km of overhead catenary lines were restored July 2023, but after the BSGI shutdown, grain exports (over 1,413 km damaged and destroyed). continued with the support of Romania and Bulgaria through the Ukrainian export corridor, allowing Damage and Loss Assessment shipment of about 15 million tons of products from August 2023 to December 2023. Continued attacks The total cost of damage to the sector is estimated have damaged 184 port facilities in Odeska and to be US$33.6 billion (Table 28). The largest Mykolaivska, but numerous measures were taken concentrations of damage are (i) local oblast, village, to upscale the Danube ports’ capacity, leading to and communal roads combined (26 percent); (ii) a record transshipment of about 3.5 million tons a railway infrastructure, rolling stock, equipment, month. The Solidarity Lanes Initiative has helped to and other assets combined (24 percent); and (iii) scale transport via logistics chains that run through motorways, highways, and other national roads (23 the EU, and it remains critical for export of goods percent). Overall, no substantial shift in damage to other than grain (e.g., steel, manufactured products, transport infrastructure has been observed, mainly ore) and for import of critical needs (e.g., fuel, because the front line was steady in 2023; most humanitarian aid). Between May 2022 and the end additional damage in 2023 was to Ukraine’s ports. of September 2023, the total value of trade via the Damage distribution by oblast remains similar to Solidarity Lanes is estimated at around €108 billion.266 what was reported in RDNA2: Donetska, Khersonska, Over two months of blockade of some Ukrainian- Zaporizka, and Luhanska oblasts together account for over 70 percent of damage. 266 European Commission, “Factsheet on EU-Ukraine Solidarity Lanes Joint Coordination Platform,” September 1, 2023, Link. 267 Y. Grigorenko, “The Blockade of Road Crossings Will Cost the Ukrainian Economy at Least $1 Billion,” GMK Center, December 6, 2023, Link. INFRASTRUCTURE SECTORS 133 This estimate is slightly lower than that in RDNA2 This assessment considers the positive impact of the (US$35.7 billion), this decrease results from upside BSGI and the Ukrainian export corridor. These helped and downside factors. On the upside, damage to unlock maritime transport routes for approximately Ukraine’s port infrastructure has doubled since 45 million tons of Ukrainian exports, including about RDNA2, while there has been a 20 percent increase 40 million tons of agriculture products between in damage to the railway network, urban public August 2022 and December 2023. Over this period, transport, and combined local oblast, village, these two initiatives mitigated about US$7 billion in and communal bridges. Increased port and rail losses by providing maritime transport access. The infrastructure damage reflects increased attacks EU’s Solidarity Lanes Initiative has also been critical on the critical logistics infrastructure for Ukrainian for facilitating alternative trade routes, although this export, while the increase in damage to urban public assessment has not separately calculated the impact transport and local oblast, village, and communal attributable to the Solidarity Lanes. bridges combined should be attributed to improved and more-available data at the local level. On The human impact of disrupted transport services the downside, a better understanding of the road is deemed to be significant but could not be infrastructure’s prewar baseline condition led to quantified at this point. Qualitatively, this is about a 34 percent reduction in the damage estimate for reduced access and time lost by people seeking to local oblast and village roads, and to a 16 percent reach hospitals, schools, markets and shops, and reduction for communal roads. Almost all damage, jobs, particularly in the frontline oblasts. As air except damage to private vehicles, relates to public space remains closed, travelers—mostly women sector assets. and children—experience significant delays on the western road BCPs, where waiting times can reach Before the invasion of Ukraine, road networks in up to 12 hours in busy periods. In addition, transport Ukraine were not in perfect condition. In 2016, an operators face serious issues with the safety of their assessment of the Ukrainian core road network268 employees: as of December 2023, 1,427 railway staff (20,760 km of international, national, and regional had been injured and 555 killed, and there have roads) found 46 percent in good condition, 38 percent likewise been reports of casualties and injuries of in fair condition, and 17 percent in poor condition. The people involved in port operations. launch of the Road Fund in 2018 and the State Road Rehabilitation Program in 2020 led to a dramatic increase in road expenditures—US$4.5 billion in Recovery and Reconstruction Needs, 2020 and US$5.0 billion in 2021. This funding enabled including Build Back Better the rehabilitation of the key transport corridors and slowed down the overall network deterioration; but The total recovery and reconstruction needs are it has not returned the whole network to an overall estimated at US$73.7 billion over 10 years (Table 39). state of good repair. The largest concentration of reconstruction needs remains the same as in RDNA2; decarbonization, The losses in this sector are estimated to be US$40.7 transport efficiency and multimodality are important billion (Table 38). The largest concentrations of losses drivers of the transportation sector Build-Back- are attributable to (i) disrupted Black Sea port access Better perspective. Needs includes (i) motorways, (65 percent), which severely hampered Ukraine’s highways, and other national roads (29 percent); (ii) trade despite the BSGI (operating until July 2023) railways infrastructure, rolling stock, equipment, and despite the Ukraine maritime corridor (operating and other assets combined (24 percent); and (iii) since September 2023); (ii) closure of Ukraine’s local oblast, village, and communal roads combined aviation industry and loss of overflight revenues (23 (17 percent). Donetska, Khersonska, Zaporizka, percent combined); (iii) disruption to road transport (7 Kharkivska, and Luhanska oblasts together account percent); (iv) disruption to rail transport (4 percent); for 73 percent of recovery and reconstruction needs. and (v) disruption to public transportation due to fleet damage and service interruption (1.4 percent). The This assessment finds that the total needs amount share of the private losses is estimated to be about has decreased by about 20 percent compared to 80 percent of the total, largely driven by the disrupted RDNA2. This reduction results from refining the access to Black Sea ports. estimation methodology, which now differentiates core and noncore railway networks with different 268 World Bank Group, “Strategy for prioritization of investments, funding and modernization of Ukraine’s road sector”, June 1, 2018, Link. 134 INFRASTRUCTURE SECTORS standards for building back better—that is, reduces lifeline connectivity, and restoring services. These the standard for noncore networks. The overall estimates factor in the readiness of projects. About principle is that most investment and upgrade should 150 transport projects at different stages are focus on core networks; noncore networks still factor planned for 2024; of these, national road and bridge in BBB reconstruction, but to a lower standard than temporary repair makes up 28 percent, local road in RDNA2. For railways, within RDNA3, 40 percent and bridge temporary repair 18 percent, railway of the Ukrainian rail network is considered core infrastructure emergency repair 12 percent, BCP and therefore eligible for the higher BBB standards expansion 11 percent, urban transport rolling stock (which typically feature higher design speed, 9 percent, railway rolling stock and equipment higher capacity, and in some cases electrification). 7 percent, and inland waterways infrastructure Conversely, needs for noncore railways lines do not repair and Danube River port expansion 2 percent. drastically modify current functional features. A In addition, three major projects are planned rural similar approach has been applied to roads: while the post office development as well as restoration of the core network— “M” roads—has EU-level motorway Ukrposhta postal network. standards, the main functional features of the noncore road network are assumed to remain the RDNA2 envisaged US$3.4 billion for 2023 recovery same. The same as for railways, noncore roads still and reconstruction priorities in the transport include BBB elements—safety, climate resilience, sector. But reported expenditures at the end of and in some cases capacity increase. This approach 2023 amounted to about US$2.1 billion. During is based on the understanding that the network of 2023, efforts aimed to address immediate needs. international highways in Ukraine (M roads) will The effort to restore basic connectivity secured continue to be the core transport network, while access to over 130 road and rail bridges; the effort the national road network will function primarily to to expand westward logistics chains transferred 29 distribute vehicular traffic flows. road BCPs to the State Agency for Restoration and Development of Infrastructure of Ukraine, allowing In addition, the needs estimates were discounted by further upgrade; upscaled rail BCP capacity; and US$2.1 billion, corresponding to the reported 2023 reconstructed rail tracks to BCPs. Finally, the effort expenditures to the transport sector. While some to address port operations led to the development repairs are “quick fixes” aiming to restore the basic of the Ukrainian export corridor and Danube ports, operational capabilities of the infrastructure, several modernization and repair of port infrastructure, 23 assets have been repaired permanently (although new transshipment terminals, an increased fleet, probably to a standard below the full BBB standard). and other improvements. Repair works to restore connectivity depend on the type of asset, its prewar condition, and the type While key priorities during 2024 remain similar to and severity of damage. Linear infrastructure (such those in 2023, there is currently an urgent need as streets, roads, and railway lines) represents to (i) prioritize the reconstruction projects, (ii) a significant share of the damage database and is mobilize project preparation for reconstruction usually damaged at specific points, requiring spot and prepare teams for delivery, and (iii) continue measures to restore connectivity. Such measures the work on institutional reforms to accelerate are considered quick fixes that do not improve the future rebuilding. quality of the link and cannot be associated with the build back better approach; for these measures, needs are not considered met, despite repairs. Due Limitations and Recommendations for to the severity of their damage, however, some road Future Assessments and rail bridges were either replaced with temporary bridges or rebuilt permanently. RDNA3 considers roads, railways, bridges, aviation assets, ports, inland waterways, and urban public transport as part of the transport sector 2024 Recovery and Reconstruction assessment. Specific limitations in the approach Priorities include the following: During 2024, transport assets call for a US$2.24 • Data sets and completeness. Like RDNA1 and billion investment, supplemented by just under RDNA2, RDNA3 calculates damage to road, US$0.1 billion to restore postal services (Table rail, aviation, and urban transport assets 40). Overall, priority projects for 2024 aim at using data provided by Ukraine’s Ministry for increasing Ukrainian export capacity, strengthening Communities, Territories and Infrastructure INFRASTRUCTURE SECTORS 135 Development, Ukrainian Railways, the State required for reconstruction, and actual technical Agency for Restoration and Development of solutions may differ from those assumed. The Infrastructure of Ukraine, oblast administrations, detailed site-by-site engineering analysis that and municipal authorities. The accuracy of these would substantially reduce uncertainty may data varies according to the security situation— not take place in the near future, given wartime that is, according to whether government constraints on budgets and capacity. representatives can access sites and validate (at least approximately) locations and actual levels • Continuation of airspace closure and limited of damage. Precise data on damaged assets in access to the Black Sea ports. Calculation of areas not currently under government control losses in RDNA3 reflects the partial restoration remain unavailable. Hence the resulting analysis of transportation through Black Sea corridors of damage and needs is inherently uncertain. under the BSGI and Ukrainian corridor. However, the future of the Ukrainian corridor remains • Assumptions regarding extent of damage. As uncertain, and RDNA3 therefore makes no with RDNA1 and RDNA2, the assessment of assumption on the future volumes that could be damage does not include detailed engineering transported through the Black Sea after 2023. work or testing. Definitive assessment of damage RDNA3 continues to assume that Ukraine’s levels is needed to determine appropriate airspace will remain fully closed during this mitigation strategies; for example, some assets time. These assumptions are inherently linked to assumed to be fully damaged might turn out Ukraine’s military gains or the effectiveness of not to require full replacement/rehabilitation. international diplomacy efforts, both of which are Remaining security threats and budgetary outside the scope of RDNA3 analysis. Projected constraints have prevented detailed engineering losses incurred or avoided are accordingly assessments in most instances. subject to high levels of uncertainty. • Cost estimates. Estimates for reconstruction • The foremost recommendations for needs use unit costs or approximations for future assessment are as follows: (i) once specific assets rather than detailed engineering security conditions allow, intensify field-level assessments; actual costs will vary by the extent investigations and engineering work needed to of damage, location within Ukraine, and market identify and classify damage; and (ii) in parallel factors that may affect pricing of works at the with field validation of data, expand consideration time of reconstruction. Unit costs also reflect of losses, which will require more complex assumptions regarding the nature of works calculation methodologies. Table 38. Damage, loss, and needs by oblast (US$ million) Oblast Damage Loss Needs Cherkaska 27.7 975.5 43.4 Chernihivska 1,568.7 1,174.5 4,393.6 Chernivetska 7.1 371.1 21.3 Dnipropetrovska 257.4 3,653.1 784.8 Donetska 8,758.6 2,551.0 16,510.4 Ivano-Frankivska 5.0 816.3 10.0 Kharkivska 3,596.9 2,942.8 8,577.9 Khersonska 5,159.4 945.6 10,444.6 Khmelnytska 3.1 779.2 7.3 Kirovohradska 49.0 668.0 96.1 Kyiv (City) - - - 136 INFRASTRUCTURE SECTORS Oblast Damage Loss Needs Kyivska 1,811.6 11,203.4 4,537.8 Luhanska 4,244.1 620.8 7,582.1 Lvivska 27.2 2,003.9 44.0 Mykolaivska 1,135.0 1,047.3 2,971.2 Odeska 218.8 1,883.2 497.8 Poltavska 8.0 1,744.0 26.7 Rivnenska 5.1 630.8 8.2 Sumska 1,327.5 936.6 3,413.3 Ternopilska - 519.5 - Vinnytska 48.6 1,224.5 276.6 Volynska 2.0 708.6 1.9 Zakarpatska 2.7 556.6 3.5 Zaporizka 5,116.8 1,850.1 10,265.1 Zhytomyrska 243.0 871.7 927.5 Nationwide (no specific region) - - 2,239.7 Total 33,623.3 40,678.0 73,684.9 Source: Assessment team. Note: - = not assessed. Damage covers 22 months of war between February 24, 2022, and December 31, 2023; loss covers a total of 40 months, which includes 22 months between February 24, 2022, and December 31, 2023, and an additional 18 months through June 30, 2025; needs cover the period 2024–2033.   Table 39. Total recovery and reconstruction needs (US$ million) as of December 31, 2023 Category Component Total needs (2024–2033) Road bridges (national roads) 7,270.6 Road bridges (local roads) 898.0 Motorways, highways, and other national roads 21,526.8 Oblast and village roads 5,091.5 Communal roads 7,065.0 Airports 1,677.5 Reconstruction Railway tracks, bridges, stations, and electrical 13,637.9 needs Railway rolling stock 2,522.4 Railway equipment and other assets 1,430.7 Private vehicles 4,205.4 Ports and inland waterways infrastructure 688.8 Urban public transport (rolling stock, infrastructure, depots, 5,241.4 maintenance vehicles) Debris removal 189.1 INFRASTRUCTURE SECTORS 137 Category Component Total needs (2024–2033) National road and bridge repair 624.2 Local road and bridge repair 413.9 Communal road and bridge repair 201.1 Equipment for repair and maintenance of national and 0.8 regional roads and bridges Railway infrastructure repair 272.2 Service delivery Railway rolling stock and equipment 148.2 restoration needs Urban transport infrastructure repair 72.1 Urban transport rolling stock and equipment 197.8 Border crossing point expansion 255.4 Inland waterways infrastructure repair and Danube River 52.5 port expansion Aviation 1.5 Total 73,684.9 Source: Assessment team. Table 40. Estimated 2024 recovery and reconstruction priorities (US$ million) Types of priority activities/investments Estimated cost National road and bridge repair 624.2 Local road and bridge repair 413.9 Communal road and bridge repair 201.1 Railway infrastructure repair 272.2 Railway rolling stock and equipment 148.2 Urban transport infrastructure repair 72.1 Urban transport rolling stock and equipment 197.8 Border crossing point expansion 255.4 Inland waterways infrastructure repair and Danube River port expansion 52.5 Equipment for repair and maintenance of national and regional roads and bridges 0.8 Aviation 1.5 Postal service 94.3 Total 2,333.9 Source: Assessment team based on priorities defined by line ministries. 138 INFRASTRUCTURE SECTORS TELECOMMUNICATIONS AND DIGITAL Context million in the broadcasting sector.271 The largest share of damage is incurred by fixed broadband operators (45.4 percent), followed by mobile Since the war began in February 2022, the operators (43.0 percent), postal service providers (9.2 telecommunications and digital sector has been percent), and broadcasters (2.5 percent). Concerning significantly impacted. Another wave of significant the geographic distribution of damage, the following cyberattacks was carried out at the end of 2023 against regions have sustained the largest shares of damage: the providers of critical services and infrastructure Donetska oblast (17 percent of damage), Kharkivska including Ukraine’s leading mobile operator (serving oblast (17 percent), Zaporizka oblast (13 percent), over 50 percent of the country’s population) Khersonska oblast (13 percent), and Kyivska oblast and the largest national oil and gas company of (11 percent). Public assets account for 100 percent Ukraine. This has resulted in widespread service of the assets damaged in the broadcasting sector disruptions and damage to information technology and 5 percent of those damaged in the postal sector; (IT) infrastructure. The attacks have underscored the remaining damage has been incurred by private the vulnerability of telecommunications services in companies. a war context and highlighted the continued need for investments in cybersecurity. The overall impact of The losses in the sector are estimated to be US$2.3 war on the telecommunications and digital sector billion (Table 41). This figure includes revenue losses as of December 31, 2023, is estimated at over US$2 due to disruptions of postal services and mobile and billion in damage, US$2.27 billion in losses, and fixed internet services, as well as increased costs US$4.67 billion in needs. The damage estimates in of the backup electricity generators needed for RDNA3 are 29 percent higher than those in RDNA2, uninterrupted internet service provision. The most and losses are 47 percent higher due to the ongoing significant losses in the sector have been incurred attacks on and destruction of infrastructure. Needs by postal service providers (65 percent), followed by estimates increased by 3 percent. The recovery mobile operators (30 percent), fixed operators (3.2 efforts by mobile and fixed internet service providers percent), and broadcasters (1.6 percent). Concerning and by postal service providers have been ongoing the geographic distribution of losses, 30 percent and have resulted in continued service provision to of losses have been incurred in Kyivska oblast, 16 the population. For example, mobile operators had percent in Donetska oblast, 16 percent in Kharkivska restored 45 percent of damaged mobile towers as of oblast, and 10 percent in Zaporizka oblast; these February 24, 2023, and 54 percent as of June 2023.269 figures highlight the impact of lost revenue and greater costs in those regions. Most of these losses Damage and Loss Assessment accrue to private providers. The total cost of damage to the sector is estimated Human impact. By affecting communication, the war to be US$2.1 billion (Table 41).270 This figure includes has had a significant human impact. Communication damage of US$950 million among fixed broadband is vital for both the Ukrainian war effort and the operators, US$899 million among mobile operators, maintenance of economic activities. The war’s impact US$192 million among postal providers, and US$51 on civilians has been considerable; approximately 269 Data on restored assets are not available for December 2023. 270 Damage is the estimated monetary value of destroyed or damaged physical assets, valued at prewar prices. Losses are a change in economic flows resulting from the war (e.g., decline in revenues of internet operators, increase in operational costs, etc.). 271 The data for broadcasting sector is based on 49 broadcasting stations that were damaged or destroyed. We thank the International Telecommunication Union (the ITU) for sharing their assessment of rehabilitation costs of five broadcasting stations in Ukraine. INFRASTRUCTURE SECTORS 139 12.2 percent of households have lost mobile service socioeconomic activity in the country. Reconstruction connections, and there has been an 11 percent needs account for 43 percent of total needs, and reduction in the functioning of mobile operator restoration of service delivery for 57 percent. This base stations.272 This disruption in communication split reflects the specifics of the sector, which relies services affects not only personal communication heavily on infrastructure but also has significant but also critical services and economic activities. costs associated with service disruptions (reduced In response to these challenges, foreign companies revenue and increased costs of mobile operators; like SpaceX (which operates Starlink) have played a opportunity costs of lost economic activity). The crucial role in maintaining connectivity, particularly associated interventions would therefore require for humanitarian purposes and essential services both hard investments in infrastructure (e.g., for like those of grocery stores, banks, and hospitals. fixed and mobile internet providers) and capacity building in cybersecurity and other areas. Other adverse effects of the communication disruptions include effects on vulnerable Most needs are concentrated in Kyivska oblast populations, education, and gender equality. In (28 percent of total needs), Kharkivska oblast (16 particular, inequality is likely to increase, as the least percent), and Donetska oblast (16 percent). Some protected parts of the population are more likely to of these needs have been met by private mobile stay behind in areas with destroyed infrastructure operators. For example, of 3,285 mobile towers (broadband, etc.), and to suffer from adverse effects damaged as of February 24, 2023, 1,796 had been of having no internet access and hence no access restored by private operators as of June 2023. to government services provided via internet. The Private providers undertake these recovery efforts adverse educational effects for students forced to on an ongoing basis. However, continued strikes on study online are also more likely to be felt by those infrastructure mean many of these assets will likely who remain in territories temporarily not under be damaged again; accordingly, the restored assets government control or in areas of active fighting. were not deducted from total needs. Finally, any opportunities that previously existed for vulnerable populations and women, due to easy internet access (e.g., social protection, online work) 2024 Recovery and Reconstruction are also less likely to materialize for those remaining Priorities in territories with damaged or destroyed digital assets. The total recovery and reconstruction investment priorities for 2024 are estimated at US$399.5 Despite the impacts on communication and million (Table 43). The recovery and reconstruction broadcasting infrastructure, Ukrainian media priorities highlighted by the GoU include (i) Social outlets and journalists have continued their Assistance to restore access to the Internet in the operations, providing access to information amidst de-occupied territories, (ii) Increasing the resilience financial pressures, particularly for local media of communication in Ukraine by local communities, due to decreased advertising revenue. The war has (iii) Restoration of access to online education, presented considerable difficulties for the media medicine, culture and social services in settlements sector, affecting the right to seek, receive, and impart without communication in the de-occupied, front- information, with UNESCO recording 14 journalist line and border territories. Other priorities include deaths since the invasion’s escalation. upgrades of the digital infrastructure resilience, such as uninterrupted operation of critical information systems of Centers for the Provision of Administrative Recovery and Reconstruction Needs, Services (CPAS), and development of a confidential including Build Back Better communication system for emergency services – meeting the urgent needs of telecommunications The total recovery and reconstruction needs in and operators, as well as restoring the broadcasting the sector are estimated at US$4.7 billion over infrastructure. To provide the estimates by type of 10 years (Table 42). The needs reflect the vital investment, the assessment relied on the estimated role of telecommunications for the maintenance of shares of investment types in the RDNA2. 272 Center for Strategic International Studies (CSIS), “Rebuilding and Modernizing Ukraine’s ICT Infrastructure Will Be Essential to Attract Private Investment,” October 2, 2023, Link. 140 INFRASTRUCTURE SECTORS Limitations and Recommendations for are partially available from operators, and partially Future Assessments extrapolated from prior RDNA assessments,274 using the data on war intensity by oblast.275 There are two key recommendations for further assessments: The key data used for these estimations are from (i) hold direct consultations with the private sector the GoU (sourced from postal service providers, and provide direct funding for recovery projects, public broadcasters, and internet service particularly those originating on the ground in providers) and from the Kyiv School of Economics. Ukraine; and (ii) have the GoU develop a list of The figures for the period June 1, 2022, to December specific cybersecurity interventions that could be 31, 2023, rely on extrapolations in case of the postal funded in 2024. sector,273 while figures for broadcasting are available from the government. The figures for the sector Table 41. Damage, loss, and needs by oblast (US$ million) Damage Loss Needs Oblast Public Private Public Private Public Private Cherkaska 0.0 13.9 0.0 1.6 0.0 22.4 Chernihivska 2.4 107.8 2.1 105.1 7.76 203.8 Chernivetska 0.0 3.2 0.0 2.1 0.00 6.4 Dnipropetrovska 0.0 89.6 0.0 52.6 0.00 132.7 Donetska 6.6 351.0 7.0 354.8 25.39 738.6 Ivano-Frankivska 0.0 55.9 0.0 3.0 0.00 82.8 Kharkivska 7.5 319.1 7.8 346.6 27.94 737.1 Khersonska 7.2 267.7 3.2 173.5 14.6 313.9 Khmelnytska 0.0 0.3 0.0 1.2 0.0 2.2 Kirovohradska 0.0 12.0 0.0 1.4 0.0 18.9 Kyivska 3.3 223.5 26.9 646.0 55.2 1273.4 Luhanska 17.3 141.6 7.8 124.0 35.1 224.3 Lvivska 0.0 15.7 0.0 3.7 0.0 27.5 Mykolaivska 3.6 52.7 2.7 89.1 10.5 165.5 Odeska 0.0 29.7 0.0 15.8 0.0 40.1 Poltavska 0.0 0.3 0.0 2.3 0.0 4.4 Rivnenska 0.0 15.0 0.0 2.7 0.0 23.4 Sumska 1.8 29.8 0.7 53.0 3.4 49.3 Ternopilska 0.0 0.3 0.0 1.4 0.0 2.7 Vinnytska 0.0 2.3 0.0 3.4 0.0 6.7 273 Damage and losses in the postal sector were estimated by computing the increase in damage suffered by mobile operators between RDNA2 and RDNA3 (6 percent) and applying this increase to project damage and losses by oblast in the postal sector. 274 Where data for the fixed broadband operators were not available, the assessment relied on extrapolations by computing the increase in damage suffered by mobile operators between RDNA2 and RDNA3 (6 percent) and using this increase and the relative proportions of damage and losses by oblast to project damage and losses for the fixed operators. 275 The Telecom sector’s assessment did not include media-related damage and there is a need for more detailed research to determine the full scope of the Ukrainian media sector’s damage, losses, and needs. INFRASTRUCTURE SECTORS 141 Damage Loss Needs Oblast Public Private Public Private Public Private Volynska 0.0 0.3 0.0 1.9 0.0 3.5 Zakarpatska 0.0 34.3 0.0 3.1 0.0 51.9 Zaporizka 10.8 266.2 4.9 225.9 21.8 335.7 Zhytomyrska 0.0 0.7 0.0 1.8 0.0 3.3 Total 60.6 2,032.9 63.1 2,215.2 201.8 4,469.9 Source: Assessment team. Note: Damage covers 22 months of war between February 24, 2022, and December 31, 2023; loss covers a total of 40 months, including 22 months between February 24, 2022, and December 31, 2023, and an additional 18 months through June 30, 2025; needs cover the period 2024–2033. Table 42. Total recovery and reconstruction needs (US$ million) as of December 31, 2023 Total needs (2024–2033) Category Component Public Private Telecom 0.0 1,652.9 Reconstruction needs Post 12.4 252.5 Broadcasting 72.2 0.00 Telecom 0.00 726.6 Service delivery restoration needs Post 90.1 1,837.9 Broadcasting 27.1 0.0 Total   201.8 4,469.9 Source: Assessment team. Table 43. Estimated 2024 recovery and reconstruction priorities (US$ million) Types of priority activities/investments Estimated cost Telecom 333.3 Broadcasting 15.3 Digital and cybersecurity 50.9 Total 399.5 Source: Assessment team based on priorities defined by line ministries. 142 INFRASTRUCTURE SECTORS WATER SUPPLY AND SANITATION Context Access to centralized piped water supply in Ukraine before the war was estimated to be at 70 percent, and access to centralized wastewater collection Since the onset of the war, the water supply and and treatment services at around 50 percent; 10 sanitation (WSS) sector has experienced damage million people lacked access to safely managed and losses and has struggled to provide services water services. There is significant inequality in difficult circumstances. The ongoing fighting and between urban and rural areas in piped water attacks on critical civil infrastructure during 2022 access (80 percent in urban areas versus 34 percent and 2023 have significantly affected WSS service in rural areas), flush toilet access (86 percent versus provision. WSS infrastructure was damaged both in 26 percent), and sewer connections (75 percent territories under government control and in those versus just 2 percent). For a country like Ukraine not under government control, but most significantly that seeks to align the WSS sector requirements along the shifting front lines. In those areas, water with the key requirements of the European Union services provision is operating in emergency mode Water Directives,276 this level of WSS services is still with the aim of preventing disruption or restoration relatively low. However, those numbers are close to of basic services to affected populations. In addition, the average for the region, and the prewar level of the power outages and problems with electricity service provision in Ukraine did not deviate much supply have significantly affected service delivery from that in neighboring countries. The situation has throughout the country. Two years after the start of significantly deteriorated since February 2022, as a the war, millions of Ukrainians continue to receive good deal of water infrastructure maintenance has intermittent WSS services or services that do not been deferred. This situation will create significant satisfy required standards—and this despite the challenges for ensuring long term sustainable WSS ongoing efforts of emergency and communal service services and will need to be addressed in planning for providers. the sectoral reconstruction efforts. Some of the key challenges identified include low cost-recovery, poor Compared with the situation assessment quality of drinking water and effluents released into completed in February 2023 (RDNA2), the current the environment, coupled with the lack of adequate assessment shows a further significant increase water quality monitoring systems, the capacity of in damage and losses primarily due to the ongoing service providers to gradually reach EU standards. war. This highlights the increasing risk of service deterioration, given the difficult financial situation of The WSS sector governance framework is highly the water utility sector that is particularly affecting fragmented, with administrative and legislative the resilience of service providers in the frontline shortcomings that limit coordination between areas exposed to continuous attacks. Additionally, national and local administrations and hamper no significant priority reforms to WSS provision efficiency. At the national level, the government or sector management could be achieved, as the is responsible for developing countrywide WSS activities undertaken during 2023 have mostly been policies that improve and increase the sustainability focused on ensuring basic WSS services, replacing of WSS services. However, municipalities are in destroyed equipment, completion of previous charge of WSS service provision (through their own investments, as well as emergency investments WSS utilities) at local or regional level. A national needed to restore mainly water supply services economic regulator oversees prices for WSS services provision. for utilities serving more than 100,000 people, but its influence is limited, and the sector is in general 276 These include the Water Framework Directive 2000/60/EC, Urban Wastewater Directive 91/271/EEC, and Drinking Water Directive 2020/2184. INFRASTRUCTURE SECTORS 143 insufficiently funded; it relies on water tariffs that The losses in the sector are estimated to be US$11.6 often do not meet cost recovery needs. This situation billion, which is a 53 percent increase (US$4 billion) had been significantly aggravated since February compared to February 2023. It should be noted that 2022: the WSS tariffs are effectively frozen and have collection of reliable data for losses represents an not followed the increase in costs for delivering even bigger challenge for this assessment, which WSS services, which, coupled with massive revenue reminds of the need to prioritize the establishment losses, leads to significant financial difficulties for data system in order to inform sector programing in a water utilities, which are unable to cover operating reliable manner. Around 40 percent of the total losses costs. Overall, there is a strong need to optimize stem from the lost revenues from WSS services operation and service provision of existing WSS provision. The war has significantly reduced water systems and facilities (developed before the war) in consumption, particularly in the industrial sector, order to gradually improve performances to meet because many industrial activities have stopped or required national and EU standards and achieve been reduced. In addition, the collection rate and the sustainability and climate change resilience. number of consumers fell significantly (especially in war-affected oblasts) and is hardly recovering over Damage and Loss Assessment time. The next biggest loss category is additional costs for WSS service provision due to increased energy and fuel costs;277 energy is the second biggest The total cost of damage to the sector is estimated cost component (at around 30 percent) for Ukrainian to be almost US$4 billion (Table 44). Out this amount, WSS utilities. The rest of the economic losses are around US$1.8 billion was due to damage between associated with increased prices of materials and February 24 and December 31, 2023. This increase is equipment, lack of maintenance, water losses, and a consequence of war-associated destruction during required demolition and debris management. As 2023, mostly from artillery shelling and rocket/ noted above, the WSS tariffs remain effectively drone attacks but also from direct destruction as in frozen since the beginning of the war, which is the case of the Kakhovka Dam in June 2023. Given increasing the gap between service provision costs the various challenges in data collection (especially and revenue even further. Geographical distribution in oblasts with ongoing military actions and those of losses mostly corresponds to the geographical that are not currently under government control), distribution of damage. Based on the received data, this is a conservative figure and could underestimate the most affected oblasts are Kharkivska, Luhanska, actual damage by up to 30 percent; however, it Chernihivska, Khersonska, and Donetska, with only provides a fair assessment of the magnitude of Kyivska oblast having proportionately less in losses WSS infrastructure damage up to this point. Based then in damage. Some areas, like the area affected on the received data, the most affected oblasts are by the Kakhovka Dam collapse (part of Khersonska Kharkivska, Luhanska, Khersonska, Zaporizka, and oblast), have suffered almost complete destruction Donetska. It can be expected that much more damage of WSS infrastructure. will be found in Luhanska and Donetska oblasts once they are accessible to the government and damage Human impact. In terms of impacts on populations, can be safely reassessed. In terms of infrastructure, the war has left millions of Ukrainians with the greatest damage has been observed in large interrupted, limited, or no access to safe water and surface infrastructure, primarily wastewater sanitation services. The WASH Cluster estimated that treatment plants (26 percent of total damage) and 9.6 million people in need for essential WSS services wastewater collection networks (26 percent of total for 2024 alone. Local WSS utilities are doing their damage). Drinking water networks, mostly located best to address the problems, but with decreasing underground, have also suffered significantly revenues and increasing costs, they lack sufficient (accounting for 25 percent of total damage). The resources; they are often limited to implementing damage to this type of WSS infrastructure is mainly emergency solutions aimed at restoring basic due to its length and wide distribution across urban services or completing ongoing investments. This and rural areas. is particularly true in the oblasts in the east of the country, where damage and losses are the largest. 277 As per the 2024 Ukraine Humanitarian Needs and Response Plan, the costs of key WSS sector inputs, such as treatment chemicals, and energy, and other inputs have increased significantly – by 200 per cent on average – while both demand and the customers’ ability to pay have decreased substantially from 12 per cent to 95 per cent, depending on the intensity of hostilities in different locations and/or the concentration of displaced or vulnerable people. 144 INFRASTRUCTURE SECTORS Recovery and Reconstruction Needs, being allocated to recovery and reconstruction of including Build Back Better water supply networks (52 percent). The structure of identified recovery and reconstruction needs mostly reflects the need to (i) restore service provision by The total reconstruction and recovery needs are reconstruction of damaged infrastructure; and (ii) estimated at US$11.1 billion for the 10 years from complete previously planned WSS development 2024–2033 (Table 45). These estimated needs factor schemes. Priority needs for 2024 include preparation in costs associated with inflation and building back of project documentation and construction works better in alignment with Ukraine’s reconstruction as well as equipment purchase; they also consider strategy, which prioritizes decarbonization as well costs for establishing the foundational architecture as reforms and institutional capacity building to and groundwork to commence recovery and meet European Union accession criteria. The short- reconstruction and include essential activities such term needs emphasize maintaining service delivery as technical and engineering studies, updating and strengthening local technical and operational of spatial plans, and recovery planning and capacity to allow for subsequent reconstruction. The prioritization at the local level. Service delivery most pressing needs in the short term therefore restoration needs also represent an important part relate to (i) the upkeep of service delivery, which could of total needs and mostly include demolition and also include repair and reconstruction of critical debris management and facility operational costs. assets; and (ii) formulation of local reconstruction Recovery and reconstruction efforts should make and recovery strategies and action plans. The use of the build back better approach to deliver better projection of long-term needs primarily focuses on results and ensure sustainability of WSS assets and (i) reconstruction of water supply and wastewater services. This also shows the technological priorities infrastructure (the largest investments are needed for the WSS sector recovery, notably the need to in reconstruction of wastewater treatment plants, decentralize the WSS facilities, and to favor low- and sewerage and water supply networks); and cost and easy to maintain infrastructure relevant (ii) associated facility operational costs. Initiating for Ukraine, learning from the global experience, recovery and reconstruction also hinges on the notably in neighboring and EU countries. explicit prioritization and sequencing of investments based on technical assessments and data collection A key priority for 2024 should also be equipping the at the local level, and on an enabling institutional and relevant government and municipal departments, legal environment for implementing plans. Looking that deal with WSS services, with the adequate at geographical distribution, the oblasts with human resources and capacity to develop a medium- larger needs include some that are most affected term sector recovery roadmap in consultation with by war activities, plus some with below-average other line ministries and key local and international service level before the war, and include Luhanska, partners. This roadmap requires careful planning Khersonska, Kyivska, Zaporizka, Mykolaivska, and and sequencing of priorities to remain accountable Donetska oblasts. for providing basic services in war-affected areas while working toward the gradual achievement of EU 2024 Recovery and Reconstruction standards in a structured and constructive recovery Priorities process. The total recovery and reconstruction investment Limitations and Recommendations for priorities for 2024 are estimated at US$241.9 Future Assessments million (Table 46). While efforts in 2024 should focus on infrastructure recovery and ensuring WSS service The damage and losses presented here were to provision, there should also be efforts to prepare a a large extent extrapolated from analyzing the project pipeline for the required future investments, severity of the war across regions and were based aligned to the recommended phased approach. on informed assumptions and information from Considering the current situation in the country, multiple sources. The estimated numbers are the priority reconstruction needs include provision indicative and not to be taken as precise values. and improvement of water supply (including water Future data collection efforts and assessments intake, treatment, storage, and distribution) in order would benefit from segregating infrastructure to provide the population with an adequate quantity assets into urban and rural, and from collecting of drinking water. This need represents 64 percent of and aggregating verified data at the national level. the total value of 2024 priorities, with the largest part Categorizing data by the degree of urbanization would INFRASTRUCTURE SECTORS 145 yield a better understanding of context-specific accountability; (ii) enhancing regulation to improve policy and financing requirements. Strengthening performance and service quality; and (iii) reforming collection of data on locally maintained and owned the funding approach to ensure cost recovery assets for periodic aggregation at the national level and sustainability, as well as to diversify funding could also be beneficial. options.278 These WSS reforms remain relevant, and they should be combined with the postwar build back To develop and improve WSS service delivery and better approach to deliver significant improvements meet EU requirements, the WSS sector needs in service quality and sustainability. to be reformed. The difficulty in obtaining data for the RDNA3 demonstrates sectoral challenges In addition, it is recommended to explore and and suggests that the sector is not receiving the collect data which is currently not available on required level of attention and support. Currently, the impacts of the deterioration of the local water the WSS sector’s responsibilities are transferred quality due to the disruption to service and/or to the local level but without sufficient financial inadequate protection, including data on health resources, which is not an ideal approach for a of affected population and the negative impact on country as big and diverse as Ukraine. In 2021, the the environment due to disruption in wastewater World Bank developed a WSS sector Policy Note collection and treatment (surface and ground that recommended reform efforts to tackle three waters). This data may be used to fully assess the key sector issues simultaneously: (i) improving impact of the war and design the reconstruction and governance to increase access, transparency, and recovery measures in the future. Table 44. Damage, loss, and needs by oblast (US$ million) Oblast Damage Loss Needs Cherkaska 0.6 0.1 1.1 Chernihivska 320.4 49.8 602.4 Chernivetska - - - Dnipropetrovska 47.1 1.4 82.5 Donetska 475.7 43.3 863.8 Ivano-Frankivska - - - Kharkivska 769.6 93.7 1,421.2 Khersonska 262.9 35.2 488.8 Khmelnytska - - - Kirovohradska - - - Kyiv (City) - - - Kyivska 167.5 17.0 306.0 Luhanska 1,547.9 247.3 2,917.3 Lvivska - - - Mykolaivska 76.1 6.1 137.4 Odeska 31.3 0.4 54.4 Poltavska 14.8 0.2 25.7 Rivnenska 0.0 0.0 0.1 Sumska 16.3 0.4 28.6 Ternopilska - - - Vinnytska - - - 278 World Bank, “Ukraine Water Supply and Sanitation Policy Note: Toward Improved, Inclusive, and Sustainable Water Supply and Sanitation Services,” World Bank, Washington, DC, 2021, Link. 146 INFRASTRUCTURE SECTORS Oblast Damage Loss Needs Volynska - - - Zakarpatska - - - Zaporizka 239.6 32.2 445.6 Zhytomyrska 2.0 0.0 3.5 Nationwide (no specific region) - 11,034.6 3,692.3 Total 3,971.8 11,561.6 11,070.8 Source: Assessment team. Note: - = not assessed. Damage covers 22 months of war between February 24, 2022, and 31 December 2023; Loss covers a total of 40 months, which includes 22 months between February 24, 2022, and December 31, 2023, and an additional 18 months until June 30, 2025; needs cover the period 2024–2033. Table 45. Total recovery and reconstruction needs (US$ million) as of December 31, 2023 Category Component Total needs (2024–2033) Water treatment facilities 532.5 Sewage treatment plants 1,539.0 Water pumping stations 362.8 Sewage pumping stations 499.5 Reconstruction Water supply networks 1,460.3 Needs Sewer networks 1,311.4 Wells 23.9 Laboratories 2.2 Clean water tanks 51.9 Water towers 174.3 Demolition and debris management 527.1 Service Delivery Facility Operational costs 893.7 Restoration Needs Increased energy/fuel consumption support 3,692.3 Total 11,070.8 Source: Assessment team. Table 46. Estimated 2024 recovery and reconstruction priorities (US$ million) Types of priority activities/investments Estimated cost Sewer networks 37.9 Sewage treatment plants 20.5 Water pumping stations 4.9 Water supply networks 144.8 Water treatment facilities 33.7 Total 241.8 Source: Assessment team based on priorities defined by line ministries. INFRASTRUCTURE SECTORS 147 MUNICIPAL SERVICES Context In contrast with the previous assessments, RDNA3 includes district heating in the municipal service sectoral assessment. However, considering the Continued damage to communal infrastructure distinct nature of its service delivery network and has widened gaps in service delivery and has infrastructure and its relation to the energy sector, further strained the capacity of local governments. district heating285 is separated out from the other Prior to the war, service provision of utilities and sector assets and is further discussed under a infrastructure across all regions was irregular separate subheading. In addition to district heating, and had low coverage rates. The solid waste the sectoral assessment continues to cover mainly management (SWM) sector was especially in five categories of assets: SWM, public infrastructure need of urgent investment and reforms, with an and facilities, local administrative buildings, sports estimated coverage of only 79 percent.279 The gaps in facilities, and local mobility assets.286 Within each infrastructure and service delivery can also be seen asset category, not all asset types are included, in commonly delayed repairs to local roads,280 the given data limitations; but the categories do reflect low (50 percent) maintenance rate of public green the diverse range of infrastructure and services that spaces,281 a significant gap of 500 cemeteries in fall under the remit of local governments. urban areas,282 and the need for better coverage of street lighting and better sidewalks. Central heating So far, within the sector, the GoU has prioritized systems, however, had high penetration (about 47 recovery of critical infrastructure and emergency percent), particularly in Ukraine’s larger cities. The repairs and investments to ensure continued gas distribution network covered 74 percent of the service delivery, yet absorption of funds has been population,283 while 89 percent of the population low. Efforts were focused on the reconstruction of had access to clean water, thanks to pumped heating infrastructure, including heat-only boiler water distribution systems. Local governments in houses, heating points, and combined heat and Ukraine, responsible for delivering a wide range of power plants (CHPPs), as well as on the emergency services and infrastructure, face numerous capacity equipment for heating infrastructure and solid waste constraints.284 Overall regulatory functions are at management. However, only part of the funding the local level in Ukraine, and provision of communal made available for these activities was actually infrastructure and services directly impacts citizens’ disbursed, and even the disbursed amounts were quality of life, local economic development, and not fully utilized, as commitments were made late in sustainability. Since the war began, the burden the year. The slow implementation can be attributed on local governments has grown exponentially, to shortcomings in coordination mechanisms and as they are expected to implement emergency organizational arrangements, significant delays in recovery works, ensure continued service delivery procurement processes, and more importantly the to residents, create conditions for resilience, and overarching capacity constraints at the local level. develop urban recovery plans for coordinated recovery at the local level. 279 Ministry of Communities, Territories and Infrastructure Development of Ukraine (MCTID), “State of the Field of Household Waste Management in Ukraine for 2021,” As reported during RDNA1. 280 MCTID, “Analysis of the State of the Road and Bridge Industry in 2021”. As reported during RDNA1. 281 MCTID, “State of the Field of the Green Economy for 2021,” As reported during RDNA1. 282 MCTID, “State of the Burial Industry in Ukraine in 2020,” As reported during RDNA1. 283 State Statistics Service of Ukraine data. 284 Local governments deliver “hard” municipal services (like local roads, solid waste management, utilities, public facilities, and urban amenities) along with social services, while also fulfilling their civil and environmental protection duties. 285 The district heating infrastructure in Ukraine sustained major damage, particularly the combined heat and power plants (CHPPs). Since early October 2022, when attacks intensified on the energy infrastructure, damage to the district heating sector was also incurred indirectly through damage to the power sector and power grid. 286 All other utilities and housing are covered by infrastructure and housing sectoral assessments respectively. 148 INFRASTRUCTURE SECTORS Notwithstanding the limitations on capacity, administrative buildings and service centers that municipalities have demonstrated a dedication to house municipal service functions and operations continued service provision. Local budgets have had faced US$320 million in damage. Finally, the cost of an average increase of 50 percent in expenditures damage in the SWM subsector continued to escalate related to housing and communal services since and reached US$126.8 million as of the end of February 2022. This increase in expenditure December 2023. However, it is worth noting that the indicates that municipalities are consistently GoU has been dedicating resources to the recovery directing resources toward additional services of SWM assets to ensure critical waste management (including temporary housing) for IDPs and other services continue to be delivered. groups; and that they are undertaking necessary repairs and operations to ensure continued delivery Damage is concentrated in the frontline regions. of services to residents. The most damaged oblasts are Donetska, Luhanska, Kharkivska, Khersonska, and Zaporizka (Table 47). Damage and Loss Assessment Together they account for over 70 percent of the total cost of damage in the municipal services sector. In the district heating subsector, three oblasts together The total damage to the municipal services sector represented 67.7 percent of the total damage is estimated at US$4.9 billion (Table 47). The incurred by district heating infrastructure across damage estimate has more than doubled since the all regions of Ukraine: Donetska, with damage RDNA2 due to the inclusion of district heating in estimated at US$559.6 million; Kharkivska, with the current assessment. Damage to district heating damage of US$425.4 million, and Luhanska, with amounts to almost US$2.1 billion and represents the damage of US$408 million. largest share of overall sector damage at 42 percent of the total. Among the district heating assets, The losses in the municipal services sector are CHPPs were subject to the most damage (estimated estimated at US$6.8 billion (Table 47). Over one- at US$1 billion),287 followed by damage to the heating third (35 percent) of the sectoral losses are from the network (US$770 million), boiler houses (US$174.7 district heating subsector; these losses are valued million), and central heating points (US$27.4 million). at US$2.3 billion and include revenue losses of The local mobility category, estimated at US$930 domestic companies as well as costs associated with million, has the second largest share of damage debris removal.289 However, the highest losses in the at 19.2 percent and includes damage to sidewalks municipal services sector, as in RDNA2, relate to and street lighting. The category of public spaces revenue losses borne by local governments, valued and facilities, which includes municipal assets like at US$3.2 billion and accounting for 47 percent of the recreation centers, libraries, cemeteries, urban total losses in the sector. These losses are tied to parks, and public squares, accounted for 17 percent the estimated loss of locally collected and retained of the total damage to the municipal sector. Sports revenues, including local taxes, administrative fees, facility assets, such as sports schools, stadiums, charges, and tariffs during the 22 months of the war swimming pools, sports halls, and ice rinks, and 18 months thereafter.290 Estimations of revenue suffered damage valued at US$561.1 million.288 Local 287 The Ministries of Infrastructure and Energy provided information on damage to CHPPs. The total damage was estimated based on the replacement value which is assumed to be US$1 million per MW of installed capacity of the CHP. However, some of the reported damage may represent the book value of damaged assets or the cost of replacement or value of repairs already done. If the damage described were light, estimates from the reporting authorities were taken instead of using the replacement cost to estimate damage, to avoid overestimations. Damaged thermal power plants providing district heating are not included in the section on district heating damage and needs but considered in the energy sector section. The list of damaged CHPPs also includes two CHPPs that provide heating services for industrial consumers, not residential. 288 The level of damage reported for many asset types, and predominantly sports facility assets, changed between RDNA2 and RDNA3. Specifically, many asset types reported as destroyed in RDNA2 are reported as damaged in RDNA3. This shift may indicate verification of damage on the ground or better data collection for assets that were previously assessed as having more than 40 percent damage. 289 The losses were estimated based on statistical information from the State Statistics Service of Ukraine on the total revenues of domestic companies based on their core sector. Total revenues were available for both 2021 and 2022, allowing the estimation of expected revenues in a no-war scenario. The revenues for 2021 were paired with economic forecasts from the International Monetary Fund (IMF) to estimate for further periods in the no-war scenario; in the war scenario, the revenues of 2022 were paired with updated economic forecasts from IMF to estimate for further periods. The losses were estimated at nationwide level without regional distribution. 290 The loss was estimated by comparing prewar monthly local revenues with those reported during the months of the war. INFRASTRUCTURE SECTORS 149 losses for local governments included both local elderly.296 This situation is exacerbated by the fact shares of personal income taxes (PIT)291 and own- that many households live in damaged houses that source revenues (OSR)292. Debris removal (including are yet to be repaired. in the district heating subsector) and loss of revenue from waste collection are accounted for at US$375.6 million and US$68.1 million, respectively.293 Sectoral Recovery and Reconstruction Needs, loss estimations relied on available local budget including Build Back Better data and assumptions derived from analysis of war intensity, the military budget code, and prewar The total reconstruction and recovery needs are baseline information on household waste collection estimated at US$11.4 billion over a period of 10 and disposal tariffs and volumes. years. It is crucial to acknowledge and prioritize the role of municipalities in the recovery process. Human impact. Damage to local infrastructure and Local governments play a vital role in leading the communal facilities has had significant impacts on the recovery efforts and ensuring service delivery quality of life of residents. Reduced waste collection to communities, including vulnerable residents. due to significant subsector damage offers a prime This role is particularly critical for big cities that example of impact on people’s lives. A reliable SWM serve as hubs for IDPs. To address this situation system is fundamental for the safety and health of effectively, a comprehensive, place-based strategy residents and IDPs in urban areas; it is also essential at the local level is needed. This strategy should also for debris removal in critical sites and for the include robust coordination among different levels commencement of reconstruction activities. Many of government, sectors, and municipalities. Careful private waste collection companies have temporarily planning will be required to ensure no-regret ceased operations due to significant losses to capital investments, and institutional processes will need to and revenues, and local governments do not have be simplified to attract financing flows from different sufficient capacities or infrastructure to fill this gap. public and private sources. Any planning advanced Moreover, given limited waste pickup (and in many during the war period will likely require adjustments cases its complete absence), ad hoc open dump sites and reconsideration during the recovery phase. are being created for the disposal of damaged assets and household waste. These may pose significant In the medium-term, it will be important to consider: health risks to the community. Damage to local (i) debris processing and disposal; (ii) technical roads, sidewalks, and streetlights have constrained preparation work; and (iii) reconstruction of assets. mobility in cities and towns, which in turn has limited The restoration of service delivery encompasses the the timely procurement of critical household goods maintenance and deployment of services, repairs and and services and has also dampened employment stabilization of prioritized public and service delivery opportunities for IDPs. The damage to the heating infrastructure, debris removal, and operational infrastructure has made winters harsher for costs for goods, equipment, and infrastructure. The residents. Ukraine experiences 105 frost days per long-term needs consist of equivalent tasks, with year on average, and portions of the country require a primary focus on the reconstruction of damaged some form of heating for half the year.294 Thus assets using the build back better approach. The damage to heating infrastructure entails hardships highest needs are concentrated in Donetska, for the affected populations and poses risks to Luhanska, and Kharkivska, which collectively health and life.295 Loss of heating infrastructure account for 52 percent of the country’s overall needs. can exact an especially grave toll on the health of Although municipalities are allocating substantial vulnerable groups such as young children and the funds toward asset repairs, only a very small portion 291 In some cases, personal income taxes registered an increase and as such registered no loss in PIT revenues. This increase can be likely attributed to the increase in salaries in the defense and IT sectors and a corresponding increase in military enrollment. 292 Municipal own-source revenue is composed of local taxes (e.g., single tax, property tax and fees), non-utility user fees, administrative fees, and any local capital revenue. 293 Loss of revenue from waste collection relates to both municipal and private entities. 294 R. Ruiz, E. Brown, and O. Fokaf, “Ukraine’s Home Heating Network Threatened by Russian Attacks,” Wall Street Journal, October 22, 2022, Link. 295 World Health Organization, “The Escalation of the Humanitarian Emergency Requires an Escalation of the Humanitarian Response,” October 14, 2022, Link. 296 E. Ducke, “‘Ordinary Russians Want Us to Freeze to Death,’” New York Times, February 11, 2023, Link. 150 INFRASTRUCTURE SECTORS of the total needs has been met so far;297 however, heating sector. In the medium-term, the Ministry this effort may be underestimated and could be tied of Communities, Territories and Infrastructure to a fragmented reporting system on the municipal Development (MCTID) has estimated that about sector assets. US$790 million is needed to cover the district heating sector liquidity needs caused by the war. The The recovery across sectors, is closely linked to immediate focus will be on restoring and securing debris removal and waste management which services and energy security for the heating season, is typically carried out by local governments, i.e., ensuring enough gas and electricity are available, and it is crucial for GoU to prioritize reduction of and that the basic infrastructure is rebuilt to ensure environmental impacts. Recovery projects should an adequate level of services to the residential adhere to the principles of the Green Deal, such and key infrastructure sectors (hospitals, airports, as promoting a circular economy. The EU Waste schools, railway facilities, etc.). Addressing part of Directive, which sets a target of 60 percent recycling the losses can also be considered as pressing for for municipal solid waste by 2030, should be the sector’s short-term operations. considered in all future investments in the sector. It is essential to prioritize waste sorting at the source, As indicated in the energy sector chapter, balancing foster markets for recycled materials, and enhance short-term energy needs with long-term goals is public awareness of recycling in national, regional, very difficult in a context of high uncertainty. This and municipal waste plans. also is true for the district heating sector, where in the recovery phase, basic energy and utility services Finally, the role of local governments goes must be restored as quickly as possible to enable beyond just municipal assets and their centrality the return of internally displaced persons—even if in the overall recovery and reconstruction Ukraine’s population and its spatial distribution will across all sectors needs to be acknowledged differ from what they were prewar. In the meantime, and supported. Local governments are critical for the postwar context will present an opportunity to the implementation, coordination, and planning of rethink the sector priorities in Ukraine, while also measures stipulated by individual functional sectors balancing the need for fast provision of enabling and line ministries. This reality necessitates not just services with the need to build back better. The adopting an integrated and place-based approach at latter need should also be aligned with systematic the local level and ensuring the presence of strong implementation of energy efficiency measures as coordination mechanisms but also continued support part of the large-scale reconstruction, which will in terms of capacity and financing for the local occur across all sectors, public and private, including governments. Considering the significant revenue households. losses and increased expenditures municipalities continue to face, it is necessary to ensure that a The heating sector will need to reduce dependency functional and predictable financing and support on gas to avoid gas imports in the short term mechanism for the implementation of projects is while setting the pace for decarbonization in made consistently available to them. In addition, the long term. With proper energy efficiency and to overcome the likely challenges of resource electrification investments, primary energy demand constraints and unstable cash flow during the could remain below prewar levels for decades, recovery period, local governments will at the outset decoupled from economic growth. On the supply need to undertake evidence-based identification of side, biofuels (including biomass and biogases) and prioritized needs and associated sequencing of hydrogen will need to replace gas as a main fuel recovery and reconstruction measures. source in the industrial and heating sectors, even if the electrification of industry and heating contributes In the district heating subsector, the total cost for to the move away from gas. reconstruction and recovery over the next 10 years (2024–2033) is estimated at US$4.7 billion (Table The Ukrainian government policy for district heating 48). This includes costs related the reconstruction needs to be aligned with EU policy, including a of district heating, including heat supply networks, clear focus on upgrading and a complete transition heating points, heat-only boiler houses, and to green technology. The following are more specific combined heat and power generation facilities, as recommendations for the short-term needs in the well as demolition and debris removal in the district district heating sector: 297 An estimated at 0.31 percent. INFRASTRUCTURE SECTORS 151 • Addressing clean heat and electricity require urgent debris removal on the one hand and cogeneration to support the government’s have additional waste management needs on the agenda of decentralized power generation for other. As indicated by the local government budget critical infrastructure like water treatment and data, there has been an increase in expenditures sewage treatment plants while supporting related to the provision of services. As such, priority district heating. needs in the estimated amount of US$233 million would enable local authorities to, in the face of the • Enacting new laws to ensure that use of new ongoing invasion, continue to repair and stabilize technology is more efficient and cost-effective prioritized public and service delivery infrastructure with special focus on boiler houses, CHPPs. for continued service provision in their jurisdictions. Similarly, liquidity gaps in the district heating sector • Addressing upgrades to the district heating have been provisioned in the amount US$789 system across a range of assets including million to ensure continued district heating delivery. pumps, boilers, and control systems for individual Reconstruction needs for the immediate timeframe heating systems to ensure energy efficiency in is in the estimated amount of US$48 million for production, distribution, and usage. the recovery of key assets such as local service and administrative centers, municipal facilities, • Increasing energy efficiency of district heating in streetlighting and US$158.6 million for heat supply terms of generation, distribution, and regulation. infrastructure. At present, the 2024 state budget In addition to the methodology developed by allocates US$ 429 million for investments in the the GoU for cities and towns that have more municipal services sectors (including district heating than 20,000 people, the local municipalities and and waste management). district heating companies should suggest ways to make district heating more energy efficient, with a focus on reducing costs and increasing the Limitations and Recommendations for optimization of consumption. Future Assessments • Comprehensively reviewing the district heating The key limitation is the lack of data on the assets system to ascertain the condition of the facilities covered by the sector and the limited access to for generation, transmission (main feeder reliable data, especially in frontline regions. The pipelines), and distribution (branch pipelines) as data collection gap can be attributed to bottom-up well as individual heating substations with the asset-based reporting which is lacking for many of goal of reducing heat loss and enhancing heat the asset categories in this sector and the absence control and temperature management with clean of a verification process. For this assessment, the technology. data were in most cases either incomplete or not verified, suggesting that data reporting systems for communal assets could be improved. The damage 2024 Recovery and Reconstruction and loss figures are therefore to a large extent Priorities extrapolated from analyzing the severity of the war across regions and use informed assumptions and The total recovery and reconstruction investment information from multiple sources. The estimated priorities for 2024 are estimated at US$462 million numbers are indicative and are not to be taken as for the municipal services, including the district precise values. heating sector (Table 49). This amount is expected both to cater to urgent needs and to prepare the Regular data collection at the local level is necessary conditions for subsequent investments. necessary for better monitoring of local service It is also crucial that local governments have the delivery and investment prioritization at the national assets necessary to continue providing critical level. Documenting damage at the local level would services including waste management services.298 facilitate better monitoring of municipal assets and The investment in waste management assets is also enable informed decision-making, project design, vital for continued debris removal efforts. These and recovery planning under the supervision of the investments are particularly important in frontline relevant local authority. Regular tracking of damage regions, which also host large share of IDPs: they and needs data at the local level would also ensure 298 These include collection trucks, container bins, and sanitary and safe dump sites and landfills. 152 INFRASTRUCTURE SECTORS needs and damage are adequately reflected in and differ from those in rural areas. More importantly, aligned with the comprehensive recovery programs local capacities are substantially different in cities and spatial plans that hromadas are currently in the as compared to smaller settlements or rural areas. process of formulating or updating. Categorizing data across the degree of urbanization would yield a better understanding of context- Future data collection efforts and assessments specific policy and financing requirements. Overall, would benefit from the segregation of the data collection of locally maintained and owned infrastructure asset data across urban and rural assets remains weak, with irregular aggregation at settlements. Infrastructure and service needs, the national level. delivery approaches, and costs in urban areas widely Table 47. Damage, loss, and needs by oblast (US$ million) Oblast Damage Loss Needs Cherkaska 9.8 69.5 24.6 Chernihivska 240.6 78.8 521.2 Chernivetska 3.9 42.3 10.2 Dnipropetrovska 49.9 387.7 120.5 Donetska 1,245.3 657.0 2,714.8 Ivano-Frankivska 0.6 68.7 3.2 Kharkivska 741.4 503.9 1,556.2 Khersonska 343.9 274.3 804.3 Khmelnytska 5.7 47.0 13.8 Kirovohradska 31.7 26.9 77.3 Kyiv (City) 270.8 372.1 530.5 Kyivska 196.9 149.3 443.2 Luhanska 764.0 462.3 1,624.8 Lvivska 3.9 138.2 12.2 Mykolaivska 169.2 125.3 394.6 Odeska 27.7 140.6 67.6 Poltavska 158.8 75.8 308.0 Rivnenska 1.2 40.1 3.5 Sumska 140.2 69.0 309.3 Ternopilska 1.2 32.8 3.9 Vinnytska 9.8 45.0 25.0 Volynska 1.1 159.0 3.2 Zakarpatska 33.8 45.3 82.0 Zaporizka 344.2 310.2 812.0 Zhytomyrska 47.4 68.9 110.9 Unknown 1.4 0.0 3.3 Nationwide (no specific region) 10.0 2,385.1 814.0 Total 4,854.4 6,775.0 11,394.3 Source: Assessment team. Note: Damage covers 22 months of war between February 24, 2022, and December 31, 2023; Loss covers a total of 40 months, which includes 22 months between February 24, 2022, and December 31, 2023, and an additional 18 months until June 30, 2025; needs cover the period 2024–2033. INFRASTRUCTURE SECTORS 153 Table 48. Total recovery and reconstruction needs (US$ million) as of December 31, 2023 Category Component Total needs (2024–2033) Reconstruction of municipal and communal assets including for waste management, local mobility, public spaces, and 4,377.7 other facilities Debris processing and disposal of communal assets 336.6 Reconstruction needs District heating reconstruction, including heat supply networks, heating points and heat-only boiler houses, 3,923.6 combined heat, and power generation facilities Demolition and debris removal of district heating sector 39.0 assets Technical works and policymaking including planning, 187.6 assessments and engineering and analytical studies Repair, and stabilization of prioritized public and service Service delivery delivery infrastructure for continued service provision 1,302.1 restoration needs including in IDP hubs Operational costs and organizational arrangements 437.8 District heating sector liquidity needs 789.8 Total 11,394.3 Source: Assessment team. Note: IDP = internally displaced person. Table 49. Estimated 2024 recovery and reconstruction priorities (US$ million) Types of priority activities/investments Estimated cost Repair, and stabilization of prioritized public and service delivery infrastructure for continued 233.3 service provision including increased service delivery in IDP hubs Reconstruction of municipal and communal assets including solid waste management, local 48.4 mobility, public spaces and other facilities Organizational arrangements and operational costs 1.5 Technical works and policymaking including planning, assessments and engineering and 20.2 analytical studies Heat supply (including heat-only boiler houses, district heating network, heating points, CHPs) 157.1 Emergency equipment for the heating infrastructure (mobile units) 1.5 District heating liquidity needs 789.8a Total 462.0 Total (incl. liquidity needs) 1,251.8 Source: Assessment team based on priorities defined by line ministries. Notes: CPH = combined heat and power plans. a. The GoU is proposing a budget amendment to make a provision to partly address liquidity needs in the district heating sector through Naftogaz. These needs are not included in the total 2024 priorities presented elsewhere in this report. 154 CROSS-CUTTING AREAS Photo by FAO/Viacheslav Ratynskyi. A destroyed Russian tank stands next to a field of sunflowers in the Chupakhivka village, Sumy oblast, 9 September 2022. CROSS-CUTTING AREAS 155 ENVIRONMENT, NATURAL RESOURCE MANAGEMENT, AND FORESTRY Context arising from the invasion. In addition, large parts of the environmental damage have taken place in areas close to the frontline, which makes an assessment The war’s negative impact on all aspects of the challenging. Importantly, reconstruction efforts will environment continues to grow and accumulate. have to reflect the need for Ukraine to transform to Damage to infrastructure—including hazardous a green and net-zero economy, harmonized with EU industrial facilities and energy installations (e.g., environmental and climate goals. power plants, oil storage depots, and refineries) along with residential and commercial buildings Since RDNA2, the scope of analysis has broadened potentially containing asbestos—all contributes to to additional environmental receptors. Since the the war-related burden of environmental pollution previous RDNA, and among the many environmental to air, water, soil, and biota. Protected areas, impacts of the war as a whole, the breach of the agricultural lands, natural grasslands, forests, and Kakhovka Dam on June 6, 2023, stands out in terms aquatic and other ecosystems have been directly of scale and devastation, as hundreds of square and indirectly impacted, including through the kilometers were flooded, causing major pollution of presence of minefields or unexploded ordnance, water courses, and thousands of square kilometers water and air pollution, forest fires, and lack of of reservoir and important wetlands desiccated access for monitoring and management. In a country as well as many biodiversity-rich protected areas that already had environmental challenges prior deeply affected.301 Otherwise, fire continues to be to the war (including poor urban air quality, poor the main source of impact to forests and natural waste management, and ineffective environmental landscapes, although at a much-reduced level when controls),299 the long-term impact of additional compared to the previous 12 months. In addition to and incremental damage could be even more an assessment of ecosystem service losses due to destructive than the immediate effects, not only the dam breach, RDNA3 includes the effects of fire on for the population’s health, safety and economic natural landscapes in the assessment of losses, as prosperity, but also for ecosystems and biodiversity, well as the damage due to GHG releases from fires. economic prosperity, and living standards. Since the beginning of the war, multiple environmental damage assessments have been performed; an overview Damage and Loss Assessment of the results can be found in the comprehensive report by the informal inter-agency coordination The total cost of damage to the forest sector is group on environmental assessments for Ukraine.300 estimated to be US$3.3 billion (Table 50). The Recovery needs assessments and rebuilding efforts cumulative total of fire-damaged forests in war must take into account the unknowns concerning zone areas rose from 183,181 ha to 211,574 ha environmental impact, since they do not speak for between RDNA2 and RDNA3. Donetska, Khersonska, themselves—unlike human or economic suffering and Luhanska account for 68 percent of the forest 299 European Union, European Union Environment Agency, and Slovak Environment Agency, “Country Briefing on State of the Environment Information in Ukraine,” 2018, Link. 300 T. Grygaski, “Comprehensive Report on Ukraine Environmental Damage Assessments” [unpublished report], informal inter-agency coordination group on environmental assessments for Ukraine, 2023. 301 Including Ukrainian National Natural Parks and Regional Landscape Parks, the Black Sea UNESCO Biosphere Reserve, Wetlands of International Importance protected under the Ramsar Convention, and Emerald Network areas protected under the Bern Convention. 156 CROSS-CUTTING AREAS damage, with damage to forests in Khersonska sequestration losses are calculated on a cumulative much more extensive in RDNA3 than in RDNA2. For monthly basis; the overall average elapsed time the first time, damage related to GHG emissions is since burning of forests and natural landscapes included in the assessment of damage (Table 50), is 17 months and 12 months, respectively. Losses totaling US$1,074 million for forests, “other natural due to air pollution from fires are included in the landscapes,”302 agricultural land, and settlements. calculation of losses for the first time and account This was calculated using oblast-specific emission for 37 percent of the total. Emission volumes are factors where possible303 and the 2023 World Bank determined in accordance with the Technical Manual shadow price of carbon at US$76/tCO2 (average for the Preparation of National Emission Inventories of low and high scenarios), and its accounts for 62 (EEP/EEA Guidelines),307 and are multiplied by percent of the increase in damage between RDNA2 coefficients considering the hazard, environmental and RDNA3. Another driver of the increase in the impact and scale of event, and a unit cost. The unit economic cost of damage is annual inflation, which cost corresponds to the tax rate for emissions from averaged about 14 percent annually in Ukraine in stationary sources (Order 4/13/2022 No. 175308 and 2021–2023. Article 143 of the tax code309). The total losses to the forest sector, including The human impact from forest and environmental burned areas, air pollution, and Protected damage is severe and profound. The Kakhovka Areas damaged by the Kakhovka Dam breach, Reservoir played a crucial role in providing energy, are estimated at US$26.5 billion. This is a very drinking water, irrigation, and river transport to significant increase over the RDNA2 estimate of various regions in southern Ukraine, as well as US$523 million, which included only losses from supplying water for industries. The dam breach reduced forest carbon sequestration and a limited directly affected 100,000 inhabitants, with up range of forest ecosystem services. The increase is to 1 million losing access to drinking water. The due to an increase of 16 percent in the burned forest flooding poses additional long-term health risks but also due to the addition of several significant due to discharge of hazardous chemicals from new categories of loss. These include air pollution manufacturing plants located downstream. The losses (US$9.9 billion); lost ecosystem services from floodwaters were also contaminated with biological protected areas resulting from the Kakhovka Dam hazards such as sewage wastewater and dead breach (US$9.6 billion);304 and the loss of ecosystem wildlife, raising the risk of waterborne diseases, services from “other natural landscapes” (US$6.5 including cholera, diarrhea, and others. Direct billion). Even though only seven months have employment in the forest sector is estimated to drop elapsed since the Kakhovka Dam breach, 36 percent 29 percent due to the 29 percent decrease in the of all losses originate in the damage to 333,041 accessible area and the destruction or redeployment ha in 12 Protected Areas located in the Zaporizka, of equipment. Each direct forestry job can be Mykolaivska, and Khersonska oblasts.305 When associated with 1.5–2.5 jobs in the wider economy, unit area values from the literature are applied to and so the effect on employment could be much the more than 543,000 ha affected, lost ecosystem greater.310 Over the short term, air pollution due to services of burned natural landscapes are significant fires is estimated to have affected up to 1 million at 25 percent of the total.306 Because these areas people. Nonmarket services such as biodiversity, have not recovered, ecosystem service and carbon recreation, and services related to cultural and 302 Defined as open forest (15–70 percent tree canopy), shrubs, herbaceous vegetation, bare/sparse vegetation, herbaceous wetland, and unknown vegetation under annual dynamic Copernicus Global Land Service Land Cover map at 100 m spatial resolution (CGLS-LC100). 303 L. De Klerk et al., “Climate Damage Caused by Russia’s War in Ukraine,” December 1, 2023, Link. 304 While the Kakhovka dam breach had many other negative effects on environment, most notably water pollution, it was out of scope of this assignment to assess these losses and damage. 305 The methodology used for calculating the effects of the Kakhovka Dam breach aligns with that used in GoU and UN, “Post- Disaster Needs Assessment: 2023 Kakhovka Dam Disaster, Ukraine,” 2023, Link. 306 R. de Groot et al., “Global Estimates of the Value of Ecosystems and Their Services in Monetary Units,” Ecosystem Services 1, no. 1 (2012): 50–61, Link. 307 European Environment Agency, “EMEP/EEA Air Pollutant Emission Inventory Guidebook 2019: Technical Guidance to Prepare National Emission Inventories,” EEA Report No. 13/2019, 2019, Link. 308 The Ministry of Environment and Natural Resources Order is available at Link. 309 The tax code is available at Link. 310 C. T. S. Nair and Rebecca Rutt, “Creating Forestry Jobs to Boost the Economy and Build a Green Future,” 2009, Link. CROSS-CUTTING AREAS 157 amenity value are highly valued by the population, (for example, hazardous waste treatment facilities, but they have now all ceased in the 750,000 ha of engineered recycling plants and – as a subsidiary burned forests and natural landscapes. option – landfills, wastewater treatment plants) following the principle of build back better and using green technologies; (iv) the establishment of a follow- Recovery and Reconstruction Needs, up environmental monitoring program to assess including Build Back Better remediation effectiveness; and (v) environmental training related to other cross-cutting sectors. The total recovery and reconstruction needs are estimated at US$681 million over the next four The establishment of a national environmental years and US$2.3 billion over the next 10 years protection agency is essential to protect the (Table 51). Recovery and reconstruction needs have environment and biodiversity in Ukraine. While been updated for the forestry sector and estimated Ukraine’s current environmental legislation is quite for capacity building in environmental governance. good also from an EU perspective, implementation Nearly half (49 percent) of needs are for the and follow-up of this legislation remains deficient. reforestation of burned areas and the construction of The establishment of such an agency is included modern nurseries to meet the demand for seedlings in the Ministry of Environment and Natural during this period. Reinstatement costs (with build Resources’ long-term plans but has not happened back better provision)311 are also estimated for due to budgetary constraints. It will be essential for damaged roads, buildings, equipment, and vehicles. better environmental protection, implementation In addition, modern harvesting equipment will be of environmental legislation and also for ensuring required to enable salvaging of harvests in burned building back better in environmental terms. areas. It is estimated that 2.8 million ha, or 30 percent of the forest land, is affected by mines or otherwise made inaccessible.312 The oblasts with the 2024 Recovery and Reconstruction highest degree of forest fire damage are also those Priorities where needs are greatest (Donetska, Luhanska, Kharkivska, and Khersonska). Forestry staff need The total recovery and reconstruction investment capacity building in order to understand the risk priorities for 2024 are estimated at US$34.5 from mines, manage war-related forest fires, and million (Table 52), of which US$7.55 million relates maintain forest certification in wartime. directly to the forestry sector. In 2024, salvage of existing equipment and its relocation to safer zones Capacity-building activities for strengthening should continue to be prioritized. The Ukrainian environmental governance will require an estimated State Forest Management Planning Association US$665 million, mostly for emergency containment (Ukrderzhlisproekt) should be reestablished or and cleanup of environmental pollution. Capacity- relocated; and its ability to support centralized building activities should focus on training Ukrainian strategic forest planning, and hence to minimize the personnel as a basis for (i) the reestablishment of long-term impact of the war on forest and ecosystem environmental monitoring networks and laboratory resources, should be strengthened. In coordination infrastructure to analyze key environmental media with strategic planning, modern closed root nursery (air, surface water, groundwater, soils, etc.); (ii) capacity should be reestablished or relocated prioritized environmental cleanup actions to remove as necessary; the focus should be on achieving contamination sources and eliminate contaminant a balanced recovery, addressing the long-term pathways for the sensitive receptors as well as needs of the wood-processing sector, and providing mine clearance not causing greater environmental other climate-resilient ecosystem services. The damage;313 (iii) the construction and commissioning administrative functioning and mobility of staff of environmental pollution control infrastructure 311 For a definition of “build back better” please refer to Box 7 of this document. In terms of the environment, this also means compliance with key tenets of EU environmental and climate acquis. 312 Note that the cost of remediation is not included in this analysis, and that the need for the survey and clearance is not included in the agriculture sector estimates. The RDNA presents them separately in the discussion of cross-cutting sectors. 313 The integration of environmental considerations across all mine clearance activities is critical as mechanical mining, stripping of topsoil, and onsite detonation of mines may remove mines more quickly but can result in significant and irreparable harm and the release of additional pollutants. 158 CROSS-CUTTING AREAS should be addressed, including through the repair can be assessed only after a detailed damage and provision of offices, vehicles, and equipment. assessment. Estimating the needs for reducing air pollution requires further evaluations for each The capacity-building investment priorities sector or subsector (energy, transport, extractives, for 2024 are estimated at US$24.1 million. The metallurgy, chemical, urban, etc.) based on the following are immediate priorities for a science planned application of best practices and modern policy–based green and resilient recovery program technologies. for Ukraine: (i) conducting assessment(s) of war- related environmental impacts in Ukraine to The RDNA3 is hampered by gaps in the data on inform the immediate risk reduction and medium- various aspects of war-related environmental and long-term integrated green recovery and impacts in Ukraine. The data available are reconstruction; (ii) promoting and supporting a incomplete or lack validation of field data integrity. systemic and coordinated approach for a green This means that it was not possible to assess and resilient recovery; and (iii) implementing and the damage and needs due to pollution of soil, advocating appropriate risk reduction, remediation, water, and ecosystems, including pollution of the and restoration actions with the potential to be marine environment (such as downstream effects scaled up, as applicable. These actions will include of the Kakhovka Dam breach), or the long-term the following: (i) stakeholder consultations; (ii) policy consequences for climate change and biodiversity. advice; (iii) information exchange; (iv) technical It was also not yet possible to assess actual health assistance in project preparation; (v) identification costs of pollution, including air pollution or asbestos and implementation of measures to reduce risks to pollution, since no data on exposure are known. human safety and the environment at selected sites; There are also limited baseline data on the timber- (vi) demonstration of remediation and restoration harvesting fleet prior to the invasion. It is likely that actions; and (vii) dissemination of results and lessons a large number of machines and vehicles, including learned. trucks, have been commandeered, destroyed, or damaged. The needs for 2024 identified by the Ukrainian State Environmental Inspectorate are estimated Forests and natural ecosystems will take much at US$2.85 million and include measurement longer than 18 months to recover their ecosystem equipment and vehicles. The Inspectorate needs to service capacity. The minimum recovery period for update the material and technical base to restore provisioning services in the fire-damaged forest the environment in Ukraine, to record and calculate areas will be 20 years or more (longer for ecological the damage and losses arising from the war, and to services), and not the 18 months indicated here. measure contamination of priority pollutants. New nurseries alone will require at least four years to establish. The area of Emerald Network sites affected by fire was not treated separately from Limitations and Recommendations for other forest and natural sites under this analysis, an Future Assessments approach that should be reviewed in future.314 Also in the future, establishing ecosystem service values The capacity-building analysis is largely for the Ukraine context could avoid the need to utilize qualitative but provides some estimates for future global or regional averages. needs. Needs related to natural landscape fires 314 For information on the Emerald Network, see European Environment Agency, “Emerald Network Data—The Pan-European Network of Protected Sites,” January 4, 2024, Link. CROSS-CUTTING AREAS 159 Table 50. Damage, loss, and needs by oblast (US$ million) Oblast Damage Loss Needs Cherkaska - - 12.3 Chernihivska 164.9 962.2 83.8 Chernivetska - - 1.9 Dnipropetrovska 10.9 12.2 4.7 Donetska 628.9 3,864.5 239.5 Ivano-Frankivska - - 2.2 Kharkivska 828.0 2,962.3 331.8 Khersonska 405.6 8,003.0 141.7 Khmelnytska 0.2 0.0 12.0 Kirovohradska 0.0 0.0 3.1 Kyiv (City) - - - Kyivska 323.5 1,525.9 137.5 Luhanska 664.0 3,540.6 292.2 Lvivska - - 5.5 Mykolaivska 48.8 756.2 27.6 Odeska 0.0 0.0 1.8 Poltavska 0.0 0.1 3.8 Rivnenska - - 4.6 Sumska 8.7 101.3 17.7 Ternopilska - - 7.9 Vinnytska - - 5.9 Volynska - - 12.4 Zakarpatska - - 10.7 Zaporizka 96.8 4,466.8 18.9 Zhytomyrska 86.2 337.7 39.9 Nationwide (no specific region) - - 844.1 Total 3,266.6 26,532.8 2,263.3 Source: Assessment team. Note: - = not assessed. Damage covers 22 months of war between February 24, 2022, and December 31, 2023; loss covers a total of 40 months, which includes 22 months between February 24, 2022, and December 31, 2023, and an additional 18 months until June 30, 2025; needs cover the period 2024–2033. 160 CROSS-CUTTING AREAS Table 51. Total recovery and reconstruction needs (US$ million) as of December 31, 2023 Total needs Category Types of activities/investments (2024–2033) Reforestation 1,002.49 Forest roads 28.65 Buildings 4.66 Buildings—debris removal 0.19 Vehicles 58.23 Recovery and reconstruction needs in the forestry sector Equipment 30.67 Office equipment 17.66 Harvesting equipment 172.80 Nurseries 103.90 Recovery needs for staffing and maintenance, capacity building, 176.00 forest information system Assessment of contaminated sites 71.00 Assessment of impacted sites in Protected Areas 9.00 Recovery and reconstruction Environmental monitoring costs 15.00 needs for capacity building Training 5.25 Environmental cleanup 500.00 Equipment supply component of capacity building 65.00 Recovery and reconstruction Measurement equipment 1.35 needs for State Environmental Inspectorate Vehicles 1.50 Total 2,263.3 Source: Assessment team. Table 52. Estimated 2024 recovery and reconstruction priorities (US$ million) a Types of priority activities/investments Estimated cost Recovery and reconstruction needs in the forestry sector for building two Reconstructing/relocating modern closed root 0.6 nurseries and procuring harvesting nursery capacity equipment Repairing/reconstructing offices, assets, and Recovery and reconstruction needs in vehicles; reestablishing “Ukrderzhlisproekt” forest 6.95 the forestry sector for service delivery management planning association Recovery and reconstruction needs for Procuring measurement equipment/vehicles 2.85 State Environmental Inspectorate Assessing contaminated sites and protected Recovery and reconstruction needs areas; building capacity of staff to address for capacity building, environmental environmental contamination; cleaning up a 24.1 assessments, and monitoringb few urgent sites; reestablishing environmental monitoring programs Total 34.5 Source: Assessment team based on priorities defined by line ministries. Note: Estimated costs for nurseries and service delivery restoration based on RDNA2, with figures adjusted for inflation. a. This sector is not included among the Government’s RDNA priority sectors, so the figures presented here are not included in the totals b. Kakhovka Dam recovery estimates are not included; some environmental equipment supply might be included. CROSS-CUTTING AREAS 161 EMERGENCY RESPONSE AND CIVIL PROTECTION Context not included in RDNA2 and RDNA1. The majority of the total damage—79.8 percent—was recorded in buildings; this share consists of 40.8 percent for This sector has been at the forefront of meeting police buildings and 39.0 percent for SESU buildings emergency response needs arising from the war. (including hydromet and rescue/response centers). Through the State Emergency Service of Ukraine The remaining 20.2 percent of damage was attributed (SESU),315 the National Police of Ukraine,316 and other to vehicles that were destroyed or seized—11.7 institutions and sector stakeholders, the GoU has percent applies to police vehicles and 8.5 percent provided essential and immediate support to affected to SESU vehicles (including hydromet and response populations since February 2022. Within the sector, centers). The largest shares of damage were found the war has caused damage to emergency response in the Luhanska (11.3 percent), Khersonska (14.4 buildings and vehicles, affecting the capacity for percent), and Kharkivska (17.2 percent) regions. response. Since February 2022, there has been a substantial increase in the provision of emergency Loss is estimated to be US$489.8 million (Table 53). services, including fire rescue, specialized response, Loss includes operational losses (US$473.3 million, and response to chemical, biological, radiological, or 96.6 percent of the total loss) and debris removal and nuclear (CBRN) threats. This situation strains (US$16.5 million, or 3.4 percent). Estimated loss is the provision of services and exacerbates prewar highest in the Donetska (9.8 percent), Kharkivska (6.5 challenges facing the sector—for example, the stock percent), and Dnipropetrovska (7.5 percent) regions. of emergency response–related buildings, vehicles, Kyiv (city) accounts for similar percentages of losses and specialized equipment was in need of updating at 7 percent. prior to February 2022. The war has also increased the risk of industrial and other accidents linked to Human impact. This sector provides essential and damaged infrastructure and has disrupted services. immediate support to the affected populations and Since February 2022, some immediate sectoral contributed to the efforts to alleviate direct impacts. needs have been met through public, donor, and In 2023, SESU responded to 404,368 calls for help private means; however, these are limited compared and rescued 4,846 people. In comparison, in 2021, to the needs for recovery/reconstruction and SESU responded to 356,561 calls for help and broader modernization. Modernization needs are not rescued 1,779 people. Within the National Police, considered in this sectoral assessment beyond the more than 7,100 police teams, including car patrols, BBB approach. were involved in the protection of public safety and order every day (compared to 4,700 in 2021). Police Damage and Loss Assessment explosive ordnance disposal (EOD) experts made more than 30,000 visits in specialized vehicles, The total damage is estimated to be US$385.7 compared to 11,000 in 2021. Lastly, it is important million (Table 53), a 114.6 percent increase from to acknowledge the impact on the sector personnel, RDNA2. This increase relates to the fact that damage who experience heightened levels of stress and data for the police are included in RDNA3 but were trauma. 315 As part of SESU, 25 oblast-level bodies govern emergency response services, including firefighting, rescue units, and operation-communication centers. The early warning system under SESU is supported by the Ukrainian Hydrometeorological Center and covers both hydrometeorological conditions and geophysical processes. SESU has a staff of 58,640, of whom 12,126 (20.7 percent) are female and 46,512 (79.3 percent) are male. 316 The National Police employs 135,075 persons—including 36,727 women (27 percent) and 98,348 men (73 percent). The police structure consists of 25 territorial bodies, which include district offices and police departments/divisions; interregional territorial bodies with regional subdivisions; and several state institutions, including the National Police Service Center, the Aviation Support Center, professional (vocational) education with specific training conditions, preschool educational institutions, children’s health and recreation facilities, and dormitories. 162 CROSS-CUTTING AREAS Recovery and Reconstruction Needs, repaired at an estimated cost of US$5.2 million, including Build Back Better including US$1.6 million paid by SESU and US$3.6 million by the police.317 Also in 2023, 182 units of fire rescue and special equipment were procured, The total recovery and reconstruction needs are estimated to cost over US$103.9 million. In addition, estimated at US$2.3 billion over 10 years (Table the Ukrainian Hydrometeorological Center procured 54). The increase in the needs since RDNA2 derives vehicles, computers, and hydrometeorological from the inclusion of police data in RDNA3 and from equipment in the amount of US$0.3 million. In 2023, the increased demand for emergency response 976 vehicles, estimated to be worth US$35.5 million, services. Police-related needs (linked to the damage were received as donations.318 Since February 2022, to buildings and vehicles) account for US$381 million. the EU Emergency Response Coordination Centre The largest shares of needs are in the Khersonska has channeled various assistance, including items (9.1 percent), Luhanska (8.8 percent), and Zaporizka and equipment related to CBRN, shelter and shelter- (7.9 percent) regions. related items, and over 900 vehicles, among them ambulances and fire trucks. All these efforts focus There are various considerations for recovery on immediate needs rather than meeting recovery/ and reconstruction planning and investments reconstruction needs. UNDP is supporting first within this sector. First, in parallel with procuring responders, including SESU, the National Police, vehicles—including specialized vehicles for CBRN— firefighting brigades, and volunteers, with a focus SESU should consider the needs for specialized on local SESU departments in selected oblasts. buildings for operational forces. These include GIZ’s Special Assistance Programme, the UDU/U- training centers, logistic hubs, platforms, hangars LEAD with Europe II project, and “Strengthening for helicopters, 112 centers, and shelters in civil of State and Municipal Emergency Management in protection facilities. Second, investments should Ukraine” project have supported the procurement consider BBB by incorporating green, resilient, and of emergency response equipment, including inclusive recovery principles and by increasing firefighting robots, mobile facilities for disasters and institutional capacities. In line with this approach, emergencies, turntable ladders, working platforms/ RDNA3 calculates needs using damage data from lifts, evacuation buses, and operational clothing for the field provided by SESU and the police (divided by women in the fire department. asset type, level of damage, and oblasts), and then applying a BBB coefficient to cover energy efficiency measures and needs for furniture and equipment. 2024 Recovery and Reconstruction Third, reconstruction efforts should also be linked to Priorities multi-hazard considerations to enhance the overall resilience of critical sector infrastructure. Fourth, The recovery and reconstruction investment because emergency services continue to be provided priorities for 2024 are estimated at US$272.3 in the vicinity of combat areas, there is a potential risk million (Table 55). In line with the sector’s highest of additional damage to infrastructure and vehicles/ priority—namely, to meet the safety and security equipment. Fifth, short-term planning should needs of the population—the focus in 2024 is on consider that market limitations have inhibited the procuring vital equipment (vehicles) that will ensure procurement of and access to specialized vehicles/ continued operationality, thereby helping affected technical equipment. areas and civilians in the context of the war. The 2024 priorities also include US$25.1 million in Some immediate needs within the sector have service improvement for the 112 system in Odesa been addressed by the GoU as well as ongoing and Dnipro City (Dnipropetrovska region) to increase efforts by partners (see also the chapter entitled the speed and quality of response due to the higher “Toward Recovery and Reconstruction”). In 2023, number of requests for emergency services. 186 damaged buildings and structures were 317 Given that these needs accounted for less than 1 percent of overall reconstruction needs and were related to repairs without considering emergency efficiency or build back better principles, these elements were not deducted from the overall needs. 318 Given that the data did not distinguish between vehicles and equipment, or clearly disaggregate estimated damage by oblast, the value of the vehicles was not deducted from overall needs. CROSS-CUTTING AREAS 163 Limitations and Recommendations for no additional operational losses were assessed Future Assessments in relation to the increased emergency response demand. It is noted that, in accordance with Resolution No. 168 of February 28, 2022, SESU received a one- This assessment follows the same principles time financial benefit (UAH 720 million), which is not and assumptions as RDNA1 and RDNA2. RDNA3 considered in the loss calculation in keeping with the includes new baseline and damage data provided by RDNA methodology.319 The extra monthly of payment the police. As in RDNA1 and RDNA2, there are many of UAH 30,000 for military and police personnel data limitations. Additional challenges relate to the ceased as of February 2023, so the payment is not change of ownership from national to local level included in the RDNA3 needs. which also may impact data. Given data limitations, Table 53. Damage, loss, and needs by oblast (US$ million) Oblast Damage Loss Needs Cherkaska 0.2 13.4 3.2 Chernihivska 36.2 12.4 150.3 Chernivetska 0.0 10.3 2.1 Dnipropetrovska 34.5 36.6 99.3 Donetska 34.4 47.9 131.0 Ivano-Frankivska 0.1 15.6 2.0 Kharkivska 66.3 31.9 132.0 Khersonska 55.7 13.4 210.2 Khmelnytska 11.9 14.3 25.9 Kirovohradska 0.0 10.4 2.2 Kyiv (City) 5.2 34.4 13.9 Kyivska 28.2 22.2 76.8 Luhanska 43.7 28.8 204.0 Lvivska 0.9 28.6 3.9 Mykolaivska 10.9 12.7 44.7 Odeska 3.0 27.2 27.2 Poltavska 0.5 15.6 3.8 Rivnenska 0.1 13.2 3.2 Sumska 8.1 12.4 20.4 Ternopilska - 11.8 2.0 Vinnytska 0.0 17.4 2.0 Volynska 0.0 11.8 2.0 Zakarpatska 0.1 14.4 2.8 Zaporizka 26.9 19.2 183.5 Nationwide (no specific region) 17.5 0.2 954.1 Total 385.7 489.8 2,305.9 Source: Assessment team. Note: - = not assessed. Damage covers 22 months of war between February 24, 2022, and December 31, 2023; loss covers a total of 40 months, which includes 22 months between February 24, 2022, and December 31, 2023, and an additional 18 months through June 30, 2025; needs cover the period 2024–2033. 319 Cabinet of Ministers of Ukraine, “The Issue of Certain Payments to Military Personnel, Rank and File Officers, Police Officers and Their Families During Martial Law,” Resolution No. 168, February 28, 2022, Link. 164 CROSS-CUTTING AREAS Table 54. Total recovery and reconstruction needs (US$ million) as of December 31, 2023 Category Types of activities/investments Total needs (2024–2033) Buildings 615.7 Reconstruction needs Debris removal 16.5 Service delivery Vehicles/equipment 1,479.0 restoration needs Service improvement 194.7 Total 2,305.9 Source: Assessment team. Table 55. Estimated 2024 recovery and reconstruction priorities (US$ million) Types of priority activities/investments Estimated cost Buildings 24.6 Debris removal 0.7 Vehicles/equipment 221.9 Service improvement (112 system in two regions) 25.1 Total 272.3 Source: Assessment team based on priorities defined by line ministries. CROSS-CUTTING AREAS 165 JUSTICE AND PUBLIC ADMINISTRATION Context share of damage (37.4 percent). Most (95.0 percent) of the total damage is to buildings: 41.6 percent to Ministry of Justice buildings (mostly penitentiary Since February 2022, the justice and public entities), 36.2 percent to the judiciary (mostly administration sector has been significantly courts), and 16.0 percent to SCS. The remaining 5.0 impacted by the war. Nonetheless, Ukraine’s courts, percent is damage to vehicles (US$6.8 million) and specialized anticorruption institutions, prosecution to furniture, equipment, or other types of inventories service, State Customs Service (SCS), state bailiffs, (US$10.2 million). Damage includes partial damage, notaries, and penitentiary staff have continued to destruction, or theft by occupants. Damage is operate, maintaining law and order and providing concentrated in eastern Ukraine: Kharkivska (30.2 essential public services. The war has caused percent), Donetska (14.9 percent), Luhanska (13.9 considerable damage to infrastructure. More than percent), Zaporizka (9.4 percent), and Khersonska 900 sector buildings were seriously damaged or (8.3 percent) oblasts. destroyed, many of them belonging to the penitentiary service, SCS, and courts. The penitentiary subsector, The losses in the sector are estimated to be US$1.7 with stock of penitentiary facilities in need of billion (Table 56). Loss of customs fees amounts to renovation before the war, has suffered the most almost US$1.63 billion, or 98.0 percent of all losses damage. Other entities under the Ministry of Justice in the sector. The drop in customs revenues from the (state bailiffs, notaries, probation service) are less supply of gas, petroleum products, and electricity affected. The economic cost of the war on the justice alone amounts to about US$820 million. By region, and public administration sector is estimated at substantial losses of customs fees are greatest in over US$0.34 billion in damage and US$1.66 billion Mykolaivska (US$254 million), Khersonska (US$178.5 in losses, with reconstruction needs estimated at million), and Zaporizka (US$102.4 million) oblasts. US$0.72 billion. Trade with Russia and Belarus has The remaining losses include almost US$11.0 million ended, and Ukrainian markets are now fully reoriented for the judiciary, US$9.4 million for institutions toward Western markets. Since RDNA2, damage has under the Ministry of Justice (with US$6.3 million increased (by more than 15 percent) and the loss for penitentiaries and probation institutions), and and needs estimations have risen accordingly. Since US$1.9 million for the prosecution service. Losses February 2022, some immediate sectoral needs have other than customs fees include: removal of debris been met, mostly through public or donor means. and demolition of damaged and destroyed buildings However, these are very limited compared to the (valued at US$10.9 million in the judiciary, US$8.1 sector’s recovery and reconstruction needs and million in SCS, US$6.6 million in the Ministry of broader modernization needs. Justice, and US$1.1 million in the prosecution service); loss of destroyed or damaged assets in the Damage and Loss Assessment process of enforcement of court judgments (US$2.7 million in the Ministry of Justice); loss of destroyed The total value of the damage to the sector is or damaged goods seized by the Customs Service estimated to be US$343.6 million (Table 56), a 15.6 in administrative proceedings with the aim of percent increase from RDNA2. This figure includes confiscation (US$0.8 million in CSC); and the cost of US$140 million in damage to institutions under purchasing or renting vehicles, furniture, equipment, the Ministry of Justice (of which US$128 million and other inventory for repaired premises (US$0.6 represents damage to the penitentiary subsector, million in the prosecution service). including probation institutions). It also includes US$119 million in damage to the judiciary (mostly Human impact. The human impact in this to courts); US$62.2 million in damage to SCS; and sector relates to the burden of investigating and US$22.4 million in damage to the prosecution service. prosecuting war crimes on top of carrying out normal The penitentiary subsector suffered the largest responsibilities. This sector is vital for ensuring the 166 CROSS-CUTTING AREAS rule of law (through courts, prosecutors, free legal 2024 Recovery and Reconstruction Priorities aid lawyers), providing administrative services to citizens (administrative services centres, notaries, bailiffs), contributing to budget revenue (customs), The total recovery and reconstruction investment and incarceration of convicted felons in appropriate priorities for 2024 are estimated at US$22.0 million conditions (penitentiary service). War crime cases (Table 58). The recovery and reconstruction priorities have increased the workload of the prosecutor’s highlighted by GoU are related to reconstruction office, the courts, and the system of free legal aid. of two detention centers and a penitentiary facility It is also important to acknowledge the heightened (US$19.1 million for 2024), and completion of the levels of stress and trauma experienced by the construction of another penitentiary facility (US$ 1.9 investigators and prosecutors working on these million for 2024). The total cost to finance priorities cases. in the penitentiary subsector in 2024 is US$22 million. 2024 priorities also include maintaining Recovery and Reconstruction Needs, operation at other key justice sector institutions. including Build Back Better Based on the information from the State Judicial Administration, more than 120 court buildings The total reconstruction and recovery needs in have been damaged, and some require only minor the justice and public administration sector are repairs like replacement of windows or doors to be estimated at US$721.3 million over 10 years (Table functional. However, no funds have been committed 57). The overall needs for the Ministry of Justice in the 2024 state budget to address any of these constitute US$293.9 million (41 percent of total priorities. The 2024 priorities should also include an needs in the sector); of this amount, US$269.6 million assessment of capacity needs of judicial staff with is related to penitentiary institutions. Needs for the regard to war crimes. judiciary are US$249.8 million, or 34 percent of total needs; for the SCS they are US$130.7 million, or 18 Limitations and Recommendations for Future Assessments percent; and for the prosecution service they are US$46.9 million, or 7 percent. Needs mostly relate to new construction or repairs and to purchase of new This assessment follows the same principles vehicles, furniture, equipment, or other inventory. and assumptions as RDNA1 and RDNA2. RDNA3 The BBB approach includes the need to ensure includes new baseline, damage, loss, and needs data security and digitalization of newly built court houses. from other entities under the Ministry of Justice, This increases the replacement cost to US$1.200 such as state bailiffs, notaries, and centers for per square meter. The geographic distribution of administrative services, in addition to the data from needs shows that most needs are concentrated in penitentiary and probation institutions. The data Kharkivska (30.2 percent), Donetska (14.8 percent), used in the assessment are from the GoU. Luhanska (13.9 percent), and Zaporizka (9.4 percent) oblasts. It is important to note that these estimates As in RDNA1 and RDNA2, there are still many data assume that the situation does not deteriorate limitations. The lack of data on assets in territories further. not under government control poses a great challenge to assessing damage and determining Some immediate needs within the sector have future recovery needs. Even after border oblasts (e.g., been addressed by the GoU as well as ongoing Kharkivska, Sumska) were returned to government efforts by partners. In 2023, buildings with minor control, it has been practically impossible to access damage that were located far away from the front customs facilities there for a thorough assessment lines were repaired, mostly by the government or of damage to buildings and movable property. the institutions themselves. Given lack of funds in the state budget, the government did not reconstruct The key recommendations for further assessments destroyed buildings that required capital investments include the following: (i) consult with GoU on how and significant resources. In two oblasts, Donetska to ensure more consistency in the information and Kharkivska, the prosecution service procured for analysis (e.g., through less turnover among new vehicles (at a cost of over US$200,000) and the focal points in each subsector); (ii) consult with new furniture, equipment, or other inventory (over private sector actors to get their view of recovery US$430,000). and reconstruction implementation priorities in the sector; and (iii) have GoU develop a list of specific priority needs in the sector that could be funded in 2025. CROSS-CUTTING AREAS 167 Table 56. Damage, loss, and needs by oblast (US$ million) Oblast Damage Loss Needs Cherkaska - - - Chernihivska 11.4 9.5 23.8 Chernivetska - - - Dnipropetrovska 3.6 0.1 7.5 Donetska 51.1 4.9 107.1 Ivano-Frankivska 0.6 0.1 1.2 Kharkivska 103.8 11.9 218.0 Khersonska 28.4 179.8 59.6 Khmelnytska 0.9 - 2.0 Kirovohradska - - - Kyiv (City) 5.3 820.1 11.2 Kyivska 21.3 3.2 44.8 Luhanska 47.8 50.0 100.3 Lvivska 3.3 0.1 7.0 Mykolaivska 16.9 255.2 35.4 Odeska 2.4 88.4 5.1 Poltavska 2.7 0.1 5.7 Rivnenska - - - Sumska 9.0 61.9 19.0 Ternopilska - - - Vinnytska 0.5 - 1.0 Volynska - - - Zakarpatska - - - Zaporizka 32.2 103.1 67.6 Zhytomyrska 2.4 72.7 5.1 Nationwide (no specific region) - - - Total 343.6 1,661.1 721.3 Source: Assessment team. Note: - = not assessed. Damage covers 22 months of war between February 24, 2022, and 31 December 2023; Loss covers a total of 40 months, which includes 22 months between February 24, 2022, and December 31, 2023, and an additional 18 months until June 30, 2025; needs cover the period 2024–2033. 168 CROSS-CUTTING AREAS Table 57. Total recovery and reconstruction needs (US$ million) as of December 31, 2023 Category Component Total needs (2024–2033) Judiciary 199.8 Ministry of Justice 235.1 Reconstruction Needs Prosecution 37.5 Customs 104.6 Judiciary 50.0 Ministry of Justice 58.8 Service Delivery Prosecution 9.4 Reconstruction Needs Customs 26.1 Total 721.3 Source: Assessment team. Table 58. Estimated 2024 recovery and reconstruction priorities (US$ million) Types of priority activities/investments Estimated cost Ministry of Justice – restoration of the detention and prison capacity 22 Total 22 Source: Assessment team based on priorities defined by line ministries. CROSS-CUTTING AREAS 169 EXPLOSIVE HAZARDS MANAGEMENT320 Context 2023, NTS resulted in the comprehensive assessment of over 50,000 km2 of land over which the GoU had regained control (including more than 21,000 km2 in Ukraine, affected by hostilities since 2014, is Mykolaivska, Khersonska, and Kharkivska oblasts) one of the most heavily mined countries in the and allowed for the further definition of the nature world. The National Mine Action Authority (NMAA) and extent of contamination.322 Investments of close estimates that more than a third of Ukrainian to US$20 million in NTS throughout 2023323 allowed territory (174,000 km2) is potentially contaminated for the updating of the needs assumptions, which with explosive ordnance as a result of the invasion in has resulted in a potential cost reduction of US$3.0 2022 (see Figure 26).321 Satellite imagery, enhanced billion for mine action needs. by artificial intelligence along with new nontechnical survey (NTS) techniques, has revealed that large Human impact. The clearance of explosive hazards areas of the land suspected of contamination (landmines, unexploded ordnance, and improvised are free of mines. However, even if only a small explosive devices) is a precondition for safe percentage of this territory is contaminated, it would rebuilding, resumption of service provision, and still represent one of Europe’s most significant return to normality in Ukraine across all sectors of clearance challenges since the end of the Second the economy and social life. Effective and efficient World War. Contamination patterns fall mainly into mine action efforts, in particular NTS,324 technical two categories: (i) large areas of land with potential/ survey (TS),325 and clearance,326 are essential to land suspected contamination, where the bulk of the area release.327 In addition to removing explosive hazards is not contaminated but some smaller areas show to allow for safe use of land, there is both a need to light contamination; and (ii) territories along the educate the population on the dangers of tampering current front line and areas again under government with explosive remnants of war (ERW) and a duty to control. The areas along the front line are heavily support surviving victims of explosive incidents. The contaminated, and clearance efforts there will be OHCHR indicates that as of January 15, 2024, there complex, costly, and time-consuming, requiring were 339 civilian victims of mines and explosive application of the highest technical standards. In remnants of war and 757 were injured.328 The costs 320 In RDNA1, this sectoral assessment was labeled “Land Decontamination.” 321 Cabinet of Ministers of Ukraine, “Demining Ukraine in a Few Years, Not Decades, Is the Best Response to the Aggressor: Yuliia Svyrydenko,” August 18, 2023, Link. 322 NMAA data. 323 Estimate provided by the United Nations Development Programme. 324 NTS is the starting point for identifying, accessing, collecting data on, reporting on, and using information to define where mines/explosive remnants of war (ERW) are to be found, as well as where they are not. It also aids in identifying Suspected Hazardous Areas (SHA) and Confirmed Hazardous Areas (CHA) where further investigation and/or clearance need to take place. 325 TS techniques and methods involve a physical intervention and use survey or clearance assets to enter a hazardous area to (i) confirm the presence, or absence, of mines/ERW and identify the type of hazards present; (ii) better define the boundaries of the SHA or CHA that require clearance; and (iii) collect information to support land release decision-making. TS can be broadly characterized as either targeted or systematic depending upon the information gathered about hazard and threat. TS assets must provide a high probability (near certainty) that the presence of expected hazardous items will be indicated by the equipment and methodology in use and that TS personnel are safe to conduct the activity. 326 The most familiar and visible part of mine action is the clearance of mines and ERW. It is also the most expensive. Clearance refers to an intrusive information-gathering and threat-removal process that fully defines a hazardous area while removing explosive hazards. 327 Land release describes the process of applying all reasonable efforts to identify, define, and remove all presence and suspicion of explosive ordnance. 328 OHCHR. 2024. Protection of Civilians in Armed Conflict — December 2023. Link. 170 CROSS-CUTTING AREAS of supporting those injured, a responsibility that will it is expected to result in release of large areas for extend across generations, are comprehensively productive use and to assist in defining with further addressed in the social protection and livelihoods precision which areas are heavily contaminated and chapter. in need of advanced clearance efforts. Managing the risks arising from ERW and landmine contamination on this scale will require more than just the resources Recovery and Reconstruction Needs, for survey and clearance needs. It will also require including Build Back Better resources for deliberate and organized buildup of Ukraine’s mine action capacity, including a full Based on data collected and on prior land release suite of human, financial, and technical resources. in 2023, the current total costs for the clearance Needs range from training of trainers to acquisition of explosive ordnance across Ukraine are an of demining equipment; from arrangements for estimated US$34.6 billion (Table 59). Based on life-cycle support for sustainable equipment to the results of a comprehensive survey in several identification and recruitment of deminers; and hromadas in 2023, the share of land projected to from the expansion of information management require technical survey and clearance was adjusted capability to establishment of efficient certification from the results in RDNA2. Specifically, there is procedures. All this and more will be necessary a reduction of 1,179 km2 for TS and a reduction of to allow the Ukrainian authorities to expand their 826 km2 for clearance, amounting to a reduction in current demining capacity and meet the demand. cost of US$3.0 billion. The cost projection includes Clearing residential areas of mines is also crucial for significant investments needed for demining the return of displaced populations, the revitalization equipment, salaries, and the training necessary to of communities as well as for implementing recovery ensure qualified staff to meet demand. Concerning and reconstruction. land release, US$50–200 million is needed for NTS,329 US$8.95 billion is needed for TS, and an estimated US$25.5 billion is needed for comprehensive land 2024 Recovery and Reconstruction clearance. Concerning geographic distribution of Priorities mine action needs, the oblasts most affected are those in the south and east, as well as oblasts in the In restoring access to areas previously contaminated north that were temporarily not under GoU control. by explosive ordnance, mine action is an enabler Indications are that most victims of explosive that allows the delivery of humanitarian aid and incidents are concentrated in the southern and recovery and reconstruction activities. Demand for eastern oblasts.330 mine action services is therefore high, and provision of services will have to follow the priorities of the To ensure that land clearance serves Ukraine’s Revised Ukraine Winter Response plan 2023–2024331 most critical recovery and reconstruction needs, as well as the 2024 Humanitarian response plan.332 prioritization of resources remains essential; the More importantly, the work in Ukraine will follow focus should be on large population centers and the NMAA’s first National Mine Action Strategy, to vulnerable exposed groups such as small-scale be finalized within 2024 and likely to include three farmers, as well as critical infrastructure with a key priorities: returning the land to productive use; view to rebuild the Ukrainian economy. The use of protecting the people from explosive ordnance; aerial technology and remote sensing can speed up and strengthening the Mine Action Management the survey of vast but lightly contaminated areas System.333 Concerning methodology, the intent is to and will significantly lower costs. At the same time, increase use of technology in NTS in 2024 in order 329 If applied on a large scale, the innovative integration of aerial surveys and AI analysis has the potential to significantly expedite NTS processes, potentially reducing projected costs from US$200 million to US$50 million. Pilot activities have shown this approach is particularly effective in areas suspected of having low levels of contamination. However, it is not applicable for nonhumanitarian tasks or in areas within 20 km of the front line. 330 Victim numbers are classified in light of the ongoing invasion. Data collected by the UN contain civilian victims only and— in light of the ongoing invasion and access challenges—are likely incomplete. Trends indicate that most incidents involving civilians occurred in Kharkivska, Khersonska, and Mykolaivska. 331 UN OCHA, “Revised Ukraine Winter Response Plan, October 2023–March 2024,” September 2023, Link. 332 UN OCHA, Humanitarian Country Team, and partners, “Humanitarian Needs and Response Plan 2024,” January 3, 2024, Link. 333 Based on the work of the Workshop on Strategy Development, co-organized by the Ministry of Economy of Ukraine and the Geneva International Centre for Humanitarian Demining, October 3–5, 2023. CROSS-CUTTING AREAS 171 to eliminate currently suspected land that has no both land and aquatic settings, no differentiation evidence of contamination. The use of community between terrestrial and underwater clearance liaisons can be helpful in collecting reports of is made, and the inclusion of the cost of aquatic explosive ordnance from the communities affected. equipment should be assumed. Of special concern These Explosive Ordnance Risk Education teams will is the destruction of the Kakhovka Dam on June also be important in communicating to populations 6, 2023, which caused extensive flooding and may that their land is safe for use if no evidence of have displaced and/or submerged mines and ERW, explosive ordnance is found. In terms of most and thus increased the risk of future injuries and direct investment needs, the GoU wants to prioritize death for the surrounding population.334 Clearance training and equipping of relevant authorities to build efforts may damage the fragile ecosystems in the the necessary capacity to accomplish its priorities river delta, while lack of demining will keep the river (Table 61). Additionally, the GoU has expressed its channel and surrounding delta difficult to use for intention to increase the number of well-trained and years to come. Costs associated with the removal well-equipped humanitarian deminers in order to of anchored and floating sea mines in the Black Sea meet the increasing demand for TS and clearance are yet unquantified. However, until clearance of the as progress continues to be made in the area of NTS. Black Sea and Ukrainian harbors is completed, the risk of this contamination will impact the price of shipping and affect Ukraine’s agricultural exports. Limitations and Recommendations for Future Assessments In the south and east, parts of Ukraine are temporarily not under the GoU’s control, with The operational costs—simplified for the purpose ongoing fighting. For this reason, comprehensive of the RDNA3—represent an average of the survey of those areas is not possible, while the most cost for clearance of current levels of explosive heavily contaminated parts of Ukraine’s territory are contamination in Ukraine. Under the phased approach adjacent to the front line and are still at risk of being to land release, government units of the Ministry of re-exposed to fighting and further contamination. Defense and SESU conduct emergency clearance— Access for humanitarian mine action is not feasible that is, explosive ordnance disposal “spot tasks;” this or expected in the short term. Rather it will be an is then followed by more systematic clearance in ongoing effort lasting decades after the end of the accordance with international standards. In addition, war. though the area used in the calculation includes 334 UN Environment Programme, Rapid Environmental Assessment of Kakhovka Dam Breach: Ukraine, 2023 (Nairobi: UNEP, 2023), 41, Link. 172 CROSS-CUTTING AREAS Table 59. Explosive ordnance contamination and estimated clearance cost (US$ million) Km2 US$, million Land Estimated area Estimated cost for HMA Oblast Oblast exposed area to war Nontechnical Technical Clearance Nontechnical Technical Clearance Total survey survey survey survey (%) Kyiv (City) 836 0 0 0 0 - - - - Cherkaska 20,916 0 0 0 0 - - - - Chernihivska 31,903 80 25,481 764 382 30.8 573.3 1,146.6 1,750.8 Chernivetska 8,096 0 0 0 0 - - - - Dnipropetrovska 31,923 0 0 0 0 - - - - Donetska 26,517 64 16,964 1,696 1,272 20.5 1,272.3 3,816.9 5,109.7 Ivano-Frankivska 13,927 0 0 0 0 - - - - Kharkivska 31,418 46 14,444 812 17.5 812.5 2,437.4 3,267.4 1,083 Khersonska 28,461 95 27,074 2,707 2,031 32.8 2,030.6 6,091.7 8,155.0 Khmelnytska 20,629 0 0 0 0 - - - - Kirovohradska 24,588 0 0 0 0 0 0 0 0 Kyivska 28,121 37 10,404 312 156 12.6 234.1 468.2 714.9 Luhanska 26,683 100 26,673 2,667 2,000 32.3 2,000.4 6,001.3 8,034.0 Lvivska 21,831 0 0 0 0 - - - - Mykolaivska 24,585 14 3,442 103 52 4.2 77.4 154.9 236.5 Odeska 33,314 0 0 0 0 - - - - Poltavska 28,750 0 0 0 0 - - - - Rivnenska 20,051 0 0 0 0 - - - - Sumska 23,832 70 16,677 500 250 20.2 375.0 750.0 1,145.8 Ternopilska 13,824 0 0 0 0 - - - - Vinnytska 26,492 0 0 0 0 - - - - Volynska 20,144 0 0 0 0 - - - - Zakarpatska 12,753 0 0 0 0 - - - - Zaporizka 27,183 74 20,105 1,910 1,432 24.3 1,432.5 4,297.5 5,754.3 Zhytomyrska 29,827 14 4,174 188 94 5.1 140.9 281.7 427.7 Ukraine a 603,549   165,437 11,932 8,482 200.2 8,949.2 25,446.6 34,596 US$/km 2 1,210 750,000 3,000,000   Sources: Oblast area: European Space Agency WorldCover 2020 Land Cover, Link. Area exposed to war: Information Management System for Mine Action (IMSMA) database, February 22, 2023. Estimated NTS cancellation of hazardous area percentages and operational costs: Assessment team. Note: HMA = humanitarian mine action; NTS = nontechnical survey; TS = technical survey. For Chernihivska, Kyivska, Sumska, Zhytomyrska, and Mykolaivska, the determination was that 95 percent of land surveyed through NTS will be cancelled, leaving 5 percent for TS; and then 50 percent of land surveyed through TS is foreseen for the actual clearance. For other oblasts the determination was that 90 percent of land surveyed through NTS will be cancelled, leaving 10 percent for TS; and then 75 percent of land surveyed through TS is foreseen for the actual clearance. Due to limited data on “reduced” area, this methodology has been maintained. However, based on a review informed by actual data from incomplete NTS, the TS numbers have been adjusted for Chernihivska, Kyivska, Sumska, and Mykolaivska to 3 percent and for Kharkivska to 8 percent. a. The total territory of Ukraine includes the regions of Crimea and Sevastopol, which are temporarily not under government control. Although these regions were not included in the RDNA assessment, their areas are counted toward the total territory of Ukraine. CROSS-CUTTING AREAS 173 Table 60. Total recovery and reconstruction needs (US$ million) as of December 31, 2023 Category Types of activities/investments Total needs (2024–2033) Nontechnical survey 200.2 Service delivery restoration needs Technical survey 8,949.2 Mine clearance 25,446.6 Total 34,596.0 Source: Assessment team. Table 61. Estimated 2024 recovery and reconstruction priorities (US$ million) Types of priority activities/investments Estimated cost Ministry of Defense: Machinery and equipment for humanitarian demining units; capacity 241.8 building for a demining equipment certification system Ministry of Internal Affairs: Equipping of new and existing pyrotechnic units of SESU, NPU, 202.10 and NGU with vehicles, demining machines, and equipment Funding for nongovernmental mine action operators for NTSa 48.4 Total 492.3 Source: Coordinated by Ministry of Economy; data provided by Ministries of Defense and Internal Affairs. Note: NGU = National Guard of Ukraine; NPU = National Police of Ukraine; NTS = nontechnical survey; SESU = State Emergency Service of Ukraine. a. The calculation represents the estimated cost of nontechnical surveys for 2024. Nongovernmental mine action operators also conduct many other activities, such as mine risk education, victim assistance, etc. The cost of these activities is not included; thus, the indicated number represents only a part of operators’ needs. Figure 26. Reference map and areas exposed to war used as baseline Source: Ukrainian Mine Action Portal, “Implementation of Humanitarian Demining Activities: Interactive Map” (accessed December 2023), Link. Note: ERW = explosive remnants of war; NTS = nontechnical survey. 174 CROSS-CUTTING AREAS 174 Photo by the European Commission. Annex 1. RDNA3 Team 175 ANNEX 1. RDNA3 TEAM The RDNA3 team would like to express its deep appreciation to all individuals and organizations who contributed to this assessment (listed below and in Table 62). From the Government of Ukraine, support was provided under the guidance of Oleksandr Kubrakov, Deputy Prime Minister for Restoration of Ukraine and Minister for Communities, Territories and Infrastructure Development of Ukraine; Anna Yurchenko, Deputy Minister for Communities, Territories and Infrastructure Development of Ukraine for European Integration; Nataliia Kozlovska, Deputy Minister for Communities, Territories and Infrastructure Development of Ukraine, and Olga Zykova, Deputy Minister for Ministry of Finance of Ukraine, with support from the ProSteer Office under the MCTID, and the Reforms Delivery Office of the Cabinet of Ministers of Ukraine (RDO). From the European Commission, support was provided under the guidance of Gert Jan Koopman Director- General, Directorate-General for Neighbourhood Policy and Enlargement Negotiations, European Commission. From the United Nations, support was provided under the guidance of Denise Brown, the United Nations Resident Coordinator in Ukraine, and Jaco Cilliers, Resident Representative of the United Nations Development Programme in Ukraine. From the World Bank, support was provided under the guidance of Arup Banerji, Regional Director, Eastern Europe; Sameh Wahba, Regional Director for Sustainable Development; Michal Rutkowski, Regional Director for Human Development; Charles Cormier, Regional Director for Infrastructure; Asad Alam, Regional Director for Equitable Growth, Finance and Institutions; Gevorg Sargsyan, Country Manager for Ukraine; and Christoph Pusch, Practice Manager, Urban, Disaster Risk Management, Resilience and Land. Table 62. RDNA3 Team Core level Government: Anna Yurchenko, Iryna Kucheruk, Maya Yankovska, Oleksandr Petroshchuk, Kateryna Elishyieva, Ruslan Kyrylenko, Roman Fil, Ihor Korkhovyi. Coordination with the Reform Delivery Office of the Cabinet of Ministers of Ukraine: Tetyana Kovtun, Olena Yaroshchuk, Olena Osmolovska, Natalie Vyniarchuk World Bank: Zuzana Stanton-Geddes, Thomas Farole, Oleksandra Shatyrko, Krunoslav Katic, Jae Kyun Kim, Soraya Ridanovic, Debashree Poddar, Alanna Simpson, Gevorg Sargsyan, Sevara Melibaeva, Caryn Bredenkamp, Karlis Smits, Nadia Kislova, Julia Samoslied, Dinara Muldabayeva, Ben Stewart, Min Jaegal, Spyridon Demetriou, Nicole Frost, Amy Lynn Stilwell, Victor Zablotskyi, Maya Abi Karam, Christina Leb, Zoe Trohanis, Baher El-Hifnawi, Salim Rouhana. International Finance Corporation: Johannes Herderschee, Victoria Tetyora European Union: Julda Kielyte, Gabriel Blanc, Marta Sadel, Chloe Allio, Svitlana Didkivska, Claes Anderson, Jana Mueller, Louise Hancock, Milica Saracevic, Mikolaj Bekasiak, Corinne Andre, Marta Skrzynska United Nations: Ana Lukatela, Rita Missal, Ildar Gazizullin, Aliaksei Vavokhin, Yaroslava Babych 176 Annex 1. RDNA3 Team Macroeconomic Impact, Poverty World Bank: Florian Blum, Antonis Tsiflis, Maryna Sidarenka, Obert Pimhidzai, Kristina Noelle Vaughan European Union: Julda Kielyte, Marta Skrzynska, Fernando Fonseca United Nations: Aliaksei Vavokhin, Hana Daoudi, Ildar Gazizullin, Yaroslava Babych Human Impact Assessment (social sustainability and inclusion; displacement/fragility, conflict, and violence) Government: Darina Marchak, Andriy Chesnokov, Tetiana Borshchenko, Serhii Sobchuk, Olena Kolchyk, Anhelina Oliynychenko, Ihor Kostrikov,Bohdan Dzyaman, Anastasia Kozhemyakina, Inna Ivanova, Mykola Boyarkin World Bank: Erik Johnson, Oleksandra Shatyrko, Farwah Qasim, Charlotte Vuyiswa McClain-Nhlapo, Mirjahon Turdiev European Union: Martin Schroeder, Oyvind Opland, Mira Didukh, Tetiana Shulha United Nations: Nynne Warring, Karen Whiting, Michael Newson, Federica Dispenza, Olena Ivanova, Noriko Takahashi, Sabine Freizer, Yaroslava Babych, Julia Broussard, Tetyana Kudina, Clara Bastardes Tort, Tetiana Grytsenko, Ruth Kirui, Theresa Chorbacher, Noushik Etyemezian, Felicia Dahlquist, Swirri Aboringong, Eliza Silvia Galos, Valeriia Taran-Gaiduk, Anastasiia Kolomiiets, Liudmyla Shevtsova, Sofiia Kornieieva, Petra Wenitzky, Lala Zinkevych Housing Government: Natalia Kozlovska,Nadia Bihun, Svitlana Kashenets, Oleksandr Petroshchuk, Inna Vakhovych, Evhen Plashchenko, Iryna Oleynikova, Yuliya Podyuk, Oleh Topiha, Roman Kropyvnytskyi, Serhii Pakholchuk, Olena Nedyba, Kateryna Samsoniuk, Ihor Korkhovyi, Viktor Martsinyshyn, Olena Osmolovska World Bank: Debashree Poddar, Pol Nadal, Tengiz Gogotishvili European Union: Krzysztof Gierulski, Ulyana Rudnytska, Andriy Bandura, Christian Ben Hell United Nations: Andrri Sphak, Marian Schilperoord, Leandro Jardon, Thamara Fortes, Simon Darke, Arun Narayanan, Olga Liuta Education and Science Government: Yevhen Kudriavets, Oleksandra Azarkhina, Khystyna Faichak, Yurii Malashenko, Natalia Viniarchuk, Andrii Bondarenko, Olena Prokopenko World Bank: Enrique Alasino, James Gresham, Adrien Olszak-Olszewski, Nalin Jena European Union: Vira Rybak, Fernando Fonseca, Janis Aizsalnieks, Marta Skrzynska United Nations: Veera Mendonca, Emmanuelle Abrioux, Manan Kotak, Daniel Cuturic, Yayoi Segi-Vltchek, Paul Cruickshank Health Government: Petro Yemets, Oleksii Iaremenko, Tetiana Gotsyenko Kateryna Samsoniuk, Natalia Viniarchuk, Inna Harts, Natalia Makhynia, Maryna Petrovska World Bank: Akiko Kitamura, Jakub Jan Kakietek, Oleksandr Zhynas, Khrystyna Pak, Arthur ten Have, Olena Doroshenko European Union: Rene Steiner, Mira Didukh, Fernando Fonseca United Nations: Kateryna Fishchuk, Nataliia Piven, Guillaume Simonian, Aron Aregay, Ihor Perehinets, Kateryna Ryabchiy Social Protection and Livelihoods Government: Dariia Marchak, Svitlana Kashenets, Olena Kulchytska, Nina Pidluzhna, Tatiana Borshchenko, Bohdan Matviychuk, Oksana Sulima, Maria Sakuta, Olena Kolchyk, Serhii Sobchuk, Serhii Pakholchuk, Ruslan Prykhodko, Ihor Kostrikov, Inna Hryhorenko, Natalia Viniarchuk, Antonina Mandrikina, Svitlana Afanasieva, Tetiana Berezhna, Kateryna Samsonyuk World Bank: Roman Zhukovskyi, Anna Baranova, Iryna Kalachova, Liudmyla Cherenko European Union: Mira Didukh, Fernando Fonseca, Oyvind Opland Annex 1. RDNA3 Team 177 United Nations: Chrissey Mueller, Marian Schilperoord, Michael Newson, Noriko Takahashi, David Mosler, Steven Kapsos, Sara Elder, Sergiy Savchuk, Paul von Kittlitz, Carlota Rego, Satinderjit Singh Toor, Frederic Wiesenbach Culture and Tourism Government: Taras Shevchenko,Nataliya Voytseshchuk,Kristina Yefimenko, Maryna Matviienko, Natalia Viniarchuk,Kateryna Samsonyuk World Bank: Jae Kyun Kim, European Union: Tetiana Shulha United Nations: Chiara Dezzi Bardeschi, Joe Kallas, Maïssa Acheuk-Youcef, Darya Levchenko Agriculture Government: Markiian Dmytrasevych, Oleksandr Krasnolutskyi, Oleksii Pinchuk, Iryna Olinkevych, Kateryna Nazarenko World Bank: Sergiy Zorya, Oleksandr Muliar, Roman Neyter European Union: Christian Ben Hell, Philipp Max Lehne United Nations: Anna Burka, Dragan Angelovski, Elyse Battistella, Kjell Sundin, Aleksa Mirkovic Irrigation and Water Resources Government: Markiian Dmytrasevych, Oleksandr Krasnolutskyi, Oleksii Pinchuk, Iryna Olinkevych, Kateryna Nazarenko World Bank: Ranu Sinha, Femke van Woesik, Frank van Steenbergen, Poolad Karimi, Ana Cecilia Escalera Rodriguez, Olga Zhovtonog European Union: Christian Ben Hell, Olga Simak United Nations: Nicolas Osbert, Anna Burka Commerce and Industry Government: Volodymyr Kuzio, Viacheslav Ovechkin, Serhii Hrom, Inna Hryhorenko World Bank: Alberto Criscuolo, Iryna Piontkivska European Union: Iryna Hubarets, Stanislav Toshkov, Panagiotis Stamoulis, Janis Aizsalnieks United Nations: Nicola Cantore, Dorina Nati, Noriko Takahashi, Marco Matteini, Serhiy Porovskyy Finance and Banking Government: Nadia Bihun, Andrii Strashnyi, Dmytro Vasylyna, Pervin Dadashova, Inna Hryhorenko, Olena Yaroshchuk World Bank: Johanna Jaeger, Yevhen Hrebeniuk, Klym Naumenko European Union: Vitaliya Mudruk, Agne Metelionyte, Marta Sadel United Nations: n/a Energy and Extractives Government: Svitlana Hrynchuk, Nadia Bihun, Roman Andarak, Antonia Volska, Valerii Bezus, Yevhen Nazarenko, Pavlo Tkachenko, Roman Kropyvnytskyi, Nika Cherneha, Yevhen Khovailo, Sofia Kakhnovets. Olexandr Petroschuk, Anton Buiar, Andriy Vedmid, Oleg Pavlenko, Maria Bishko, ykhailo Kopach, Mykola Hevpa, rina Zdorovetska, Lyudmila Prybytkova World Bank: Silvia Martinez, Koji Nishida, Roman Novikov, Sandu Ghidirim, Wolfhart Pohl European Union: Torsten Woellert, Ulyana Rudnytska, Andriy Bandura, Ingrid Sager, Krzysztof Gierulski, Marcus Lippold, Janis Aizsalnieks United Nations: Anna Piwowarska, Tetiana Tavlui, Joseph Busch, Prashant Kumar, Marco Matteini, Serhiy Porovskyy 178 Annex 1. RDNA3 Team Transport Government: Anna Yurchenko, Serhii Derkach, Oleksandra Azarkhina, Oleksii Serheiev, Addrii Danyk, Mykola Yavon, Sofia-Anna Kakhnovets, Kateryna Shtauberg, Yuliana Sidliarova, Valentyna Poliakova, Dmytro Klets, Anna Kopynets, Oleksii Okarsky, Yurii Vaskov, Oleksandr Pavlichenko, Volodymyr Shemaiev, Roman Melnychenko, Anna Mazur, Oleksandr Lemeshkin, Maryna Babii, Yevhen Korniev, Ihor Blinov, Andrii Berbeka, Natalia Pervak, Mykola Melnyk, Olena Starikova, Serhii Vasylyha, Dmytro Mikov, Yevhen Smuryhin, Olena Belska World Bank: Gregoire F. Gauthier, Yevhen Bulakh, Anna Vazhnenko, Anton Hagen European Union: Svitlana Didkivska, Daniel Jacques United Nations: Nicolas Rallo, Mekki Lahlou, Sarantis Poulimenakos, George Paltakis, Elene Aglazde, Arun Narayanan Telecommunications and Digital Government: Anatolii Komirnyi, Maksym Paliy, Maksym Polishchuk, Olha Zadorozhna, Nadia Martynova, Yuriy Matsyk, Olena Osmolovska, Olena Yaroshchuk World Bank: Maria Claudia Pachon, Thomas Chalumeau, Mykhailo Koltsov, Marta Khomyn European Union: Svitlana Didkivska, Sergiy Ladnyy, Jenni Lundmark, Tanel Tang United Nations: Tomoyoshi Koume, Volodymyr Brusilovskyi, Elind Sulmina Water Supply and Sanitation Government: Oleksandr Butenko, Iryna Perehinchuk, Oleksandr Petroshchuk, Oleksandr Shpytko, Olena Osmolovska, Volodymyr Nahornyi, Oksana Nahorna, Anna Dmytrenko, Artem Ratiev, Olha Mikhailova, Sviatoslav Chubarev, Marharyta Shumeiko, Dmytro Kovalchuk, Oleksandr Okhota World Bank: Stjepan Gabric, Ivaylo Hristov Kolev European Union: Olga Simak, Marjukka Porvari United Nations: Mario Bianco, Nicolas Osbert Municipal Services Government: Oleksandr Butenko, Andrii Vedmid, Anton Buiar, Oleksandr Petroshchuk, Olena Osmolovska, Volodymyr Nahornyi, Oksana Nahorna, Anna Dmytrenko, Artem Ratiev, Olha Mikhailova, Marharyta Shumeiko, Dmytro Kovalchuk, Serhii Vlasenko, Natalia Kozlovska, Diana Novikova, Pavlo Krapyvnytskyy, Oleksandr Okhota, Yevhenia Popovych, Oleksandr Horoshko, Anna Dmytrenko, Sviatoslav Chubarev, Marharyta Shumeiko, Dmytro Kovalchuk, Oleksandr Shpytko, Ruslan Metil World Bank: Debashree Poddar, Oleksandr Dovbnia, Roman Novikov European Union: Krzysztof Gierulski, Natalia Starostenko, Tomasz Ostropolski United Nations: Teshager Tefera, Olena Ruditch, Steffen Kaeser, Noriko Takahashi, Alexey Paschenko Environment, Natural Resource Management, and Forestry Government: Yevhenii Fedorenko, Olena Kramarenko, Victor Smal, Taras Lymar World Bank: Arno Behrens, Susanna Dedring, Oksana Rakovych, Myles McDonagh European Union: Christian Ben Hell, Olga Simak, Marjukka Porvari United Nations: Mohammad Haris Sherzad, Br Ravishankar, Pier Carlo Sandei, Hassan Partow, Atila Uras Emergency Response and Civil Protection Government: Mykhailo Hryb, Ihor Sheliuk, Mykola Fedoseev, Yuliia Nemchenko, Kateryna Samsonyuk, Tetiana Shkolnik, Lobko Anatoliy World Bank: Zuzana Stanton-Geddes, Krunoslav Katic, Farah Soraya Ridanovic European Union: Alejandro Eggenschwiler, Stanislav Topolnytskyy United Nations: n/a Annex 1. RDNA3 Team 179 Justice and Public Administration Government: Yurii Skakalskyi, Nataliia Panchuk, Irina Galivets, Nataliia Zalevska, Olena Kovalenko, Zurab Adeishvili, Oleksii Boniuk, Nadiia Polishchuk, Olena Vysotska World Bank: Laura Pop, Vitaliy Kasko, Daniela V. Felcman, David Bernstein European Union: Panagiotis Stamoulis, Clemens Mueller, Manfredas Limantas, Ingrid Sager, Jenny Lundmark, Ekaterina Yakovleva United Nations: Arezou Farivar, Vitalii Krysko, Kei Fukagawa, Olena Kulikovska Explosive Hazard Management Government: Oleksii Serheiev, Addrii Danyk, Ihor Bezkaravainyi, Yurii Koreva, Mykhailo Hryb, Dmytro Panshyn, Nadia Martynova, Yevhenia Bodnia, Viktoria Khomenko, Vladyslava Vyshniakova, Andriy Kondor World Bank: Zuzana Stanton-Geddes, Krunoslav Katic, Farah Soraya Ridanovic European Union: n/a United Nations: Paul Heslop, David McMahon, Stella Kaburis, Ejona Bakalli, Rory Logan, Olena Kryvova, Guy Rhodes Collaboration with Kyiv School of Economics (KSE) Vladyslava Hrudova, Dmytro Goriunov, Yulia Danyshchuk, Dmytro Topolskov, Inna Studennikova, Yuliya Markuts, Dmytro Andriyenko, Andrey Bezpyatov, Taras Marshalok, Dmytro Goriunov, Ihor Piddubnyi, Roman Neyter, Nazar Moshnyaha, Dmytro Averin, Alla Bykovska, Tetiana Lutai, Yuriy Golynskyi, Valeriia Denysenko US$152 billion in direct damage OVERALL US$486 billion in total needs considering 10 years US$9.5 billion in unmet financing needs for immediate recovery & reconstruction priorities (identified by Ukrainian line ministries) 5.9 million people displaced across Europe (UNHCR) 4.9 million people internally displaced (GoU) 61% of elderly women and 46% of elderly men cannot afford basic needs 31% of food insecure households are headed by women over 60 82% of children are living in poverty and 61% of parents say their children have signs of stress and poor sleep (UNICEF) 7.4% or 300,0000 increase of persons with disabilities (as of July 2023) and 29% of IDP households have one or more members with a disability HUMAN IMPACTS 32% of rural households have no access to GBV response services amidst an increase in violence 72% of people registered as unemployed are women 38 points drop in reading between PISA-2018 and PISA-2022 among youth (equivalent to close to two years of schooling) and 92-point average difference across all subjects between children in urban and rural households Estimated GDP for 2023 is 74 percent of 2021 GDP in real terms MACROECONOMIC US$37.3 billion of external financing needs for the budget for 2024 IMPACTS 10% of the total housing stock damaged or destroyed impacting more than 2 million housing units across the country 3,809 educational institutions and 168 research institutions damaged or destroyed 43% of schools relying to some extent on online learning 1,242 healthcare facilities destroyed or damaged 20% of educational institutions still lack bomb shelters with significant regional disparities SOCIAL SECTORS US$3.3 billion in social protection expenditure for internally displaced persons 4,779 cultural and tourism assets destroyed or damaged US$80.1 billion in damage and losses in the agriculture sector 300% increase in damage to the aquaculture and fishery industries caused by the destruction of the Kakhovka Dam US$1.4 billion in damage and losses in the irrigation and water resources sector US$15.6 billion in damage to the commerce and industry facilities PRODUCTIVE US$5.7 billion in credit losses in finance and banking SECTORS US$54 billion revenues losses in the energy sector, including $31.97 billion for the losses the power sector alone 8,400 km of motorways, highways, and other national roads damaged, over 140 bridges on the national road network and 150 bridges on the oblast and village roads, more than 200 rail stations, and more than 150 railway bridges US$2.1 billion in damage to telecommunications and digital sector 207 water treatment facilities and pumping stations, and 234 sewage treatment plants and INFRASTRUCTURE pumping stations destroyed or damaged SECTORS 9.6 million people have interrupted, limited, or no access to safe water and sanitation US$4.8 billion in damage in the municipal sector of which 42% in district heating 211,574 ha of forest damaged and 543,526 ha of burned natural landscapes 800 emergency sector buildings damaged or destroyed, 2,700 vehicles destroyed or stolen, and 50,000 rescue operations recorded more than before the invasion CROSS-CUTTING 124 courthouses damaged and destroyed in the justice sector SECTORS US$344 million in damage in justice and public administration infrastructure 174,000 km2 of area contaminated with explosive ordnances, US$34.6 billion estimated needed for humanitarian mine action Source: RDNA3. Note: Data as of December 31, 2023, unless stated otherwise