Recommendations for the Future Reconstruction of Ukraine

19 April 2023

As a result of the war in Ukraine, which is still continuing after twelve months, dwellings and public infrastructure have been demolished or damaged, public services and economic activity have been impeded, and significant numbers of Ukrainians have been displaced from their homes.

A new joint assessment released on 23 March 2023 by the Government of Ukraine, the World Bank, the European Commission, and the United Nations, estimates that the cost of reconstruction and recovery in Ukraine – covering the one-year period from Russia’s invasion of Ukraine to the first anniversary of the war on February 24, 2023 – has grown to US $411 billion (equivalent of €383 billion).  The cost of reconstruction and recovery is expected to stretch over 10 years and combines both needs for public and private funds.

Against this background, EIC, in collaboration with FIEC, CICA and other European sectoral associations, has formulated key recommendations to the international donor community which will finance Ukraine’s reconstruction. In the light of the growing global construction market, on the one hand, and the lack of manpower in the global construction industry, on the other hand, CICA, FIEC and EIC, with the other co-signatories call on international donors to create attractive financial and legal framework conditions for construction companies and their suppliers that are ready to use their scarce resources for the reconstruction of Ukraine.

More specifically, the joint recommendations relate to the following fields of action:

  1. Build back, but better and quicker but without reducing quality.
  2. In anticipation of accession of Ukraine to the EU, buildings and infrastructures should be rebuilt in accordance with European standards.
  3. The preparation phases of the projects is of utmost importance and should be modernised.
  4. Ukrainian authorities, EU Institutions and MDBs should use procurement methods which prevent corruption.
  5.  International contract standards (FIDIC, etc.) should be applied to speed up negotiations and contract awards.
  6. Local financing channels and invoice approval procedures should be simplified.
  7. The bank guarantees system should be simplified and harmonised to reduce their cost.
  8. The private sector should be encouraged to long-term investments, e.g. by first-loss public guarantees.

The joint CICA-FIEC-EIC Position Paper can be downloaded >> here.