Innovative finance can help rebuild Ukraine

ZURICH – Estimates of Ukraine’s postwar reconstruction costs vary widely. Ukrainian Prime Minister Denys Shmyhal recently put the likely bill at US$750 billion, while European Investment Bank President Werner Hoyer thinks the country may need US$1.1 trillion. Every day that the war continues, the figure increases.

Ukraine will need to rebuild power stations, electricity grids, and critical water, sanitation, and transport infrastructure. Industry will require investments, and houses will need to be rebuilt and repaired before the winter – although many cities, towns, and villages have been completely destroyed.

But Ukraine will not be able to finance such a massive investment programme on its own and should not count on reparations from Russia. Financing must therefore also come from multilateral development institutions such as the World Bank, the European Investment Bank, and the European Bank for Reconstruction and Development. Western governments will have to contribute as well, as will the European Union.