Ukraine attracted $35 bln in budget funding for post-war reconstruction in 2023

Vyacheslav Kurylo, policy and data analyst at the Institute for Analysis and Advocacy, says that in the first half of 2023, Ukraine raised more funds for reconstruction than in the entire year of 2022.

He spoke about this at the expert discussion "Reconstruction in Ukraine 2023-2024: Conclusions and Challenges" held on January 26.

In November 2023, the government and international partners began preparing the third wave of rapid reconstruction needs assessment, so a new figure will be released soon.

"In the first 9 months of 2023, Ukraine managed to raise more money for reconstruction than in the entire year of 2022. As of November 9, 23, this amount amounted to almost $35.5 billion. At the same time, the share of grants in the structure of financial assistance has decreased, while the share of loans has increased."

Ukraine has less clarity on funding sources compared to 2023 this year. The government planned to cover the $42 billion budget deficit with financial assistance from the US and EU, but none of them has been approved yet.

In 2023, reconstruction was mainly funded by the state-formed Armed Aggression Response Fund from the forced seizure of property owned by Russia and its residents in Ukraine and from 50% of the funds transferred by the National Bank.

The main areas of use of the fund are the construction and reconstruction of infrastructure, public buildings, housing for IDPs, etc.

In 2024, the law "On the State Budget" also provides for the creation of the fund. International partners, financial institutions, and private companies will assist as well.

As of December 31, 2022, the largest volumes of direct investments (balances) were channeled to industrial enterprises – 41.9% and institutions and organizations engaged in wholesale and retail trade, repair of motor vehicles, and motorcycles – 16.3%

The main investor countries include Cyprus, the Netherlands, Switzerland, and the UK.