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Newsletter #21 Reconstruction Ukraine - February 2025

As Ukraine enters its fourth year of full-scale war, the country continues to demonstrate unwavering resilience and an unbreakable determination to achieve victory. Yet, the challenges remain immense, and the urgency for stronger international support has never been more critical.

In February, various statements floated hypothetical scenarios to end the conflict, but on the ground, Russian strikes on Ukrainian cities are intensifying. Ukraine’s future is being decided now, and with it, the very principles that underpin our collective security.

In this edition, we examine the latest assessments of Ukraine’s losses over the past three years, as presented in the Rapid Damage and Needs Assessment (RDNA4). We also explore the key initiatives shaping the country’s reconstruction:

• What does the new EIB funding include?
• How have the UK and Switzerland reaffirmed their commitment to rebuilding and supporting Ukraine?
• How will the EU facilitate Ukraine’s energy system integration into the European market?
• What are the strategic advantages of the historic Comprehensive Economic Partnership Agreement between Ukraine and the UAE?

Finally, we highlight the growing role of the private sector in Ukraine’s resilience, with a focus on:

• The advancements in the IT industry, a crucial pillar of Ukraine’s economy despite the war.
• A new defense collaboration between Ukrainian Defense Industry and Thales International SAS.

Now is the time to act. Ukraine is fighting not only for itself but for all of us, for our values, and for Europe’s stability.

We hope this edition provides you with valuable insights into the challenges and opportunities of Ukraine’s reconstruction.

Ukraine Reconstruction: Key Figures

● Ukraine’s recovery needs update

On 25 February, the day after the 3rd anniversary of the start of the full-scale invasion, the Government of Ukraine, the World Bank Group, the European Commission and the United Nations released an updated Rapid Damage and Recovery Needs Assessment (RDNA4). Ukraine continues to suffer significant losses as a result of the war, in the majority of sectors, damage increased by between 5% and 20% relative to RDNA3.

Below is a more detailed analysis damages, losses and needs:

• US$524 billion of the recovery and reconstruction needs for a period of 10 years, which is approximately 2.8 times the estimated nominal GDP of Ukraine for 2024.
• + US$37 billion in needs (almost 8%) compared with RDNA3, when needs were around US$486 billion.
•  US$589 billion aggregate economic, social, and other monetary losses.
•  US$176 billion of the total direct damage since 24 February 2022, which continues to be concentrated in the housing, energy and extractives, transport, commerce and industry, and agriculture sectors.
•  US$17.32 billion total estimated cost for 2025 recovery and reconstruction in 2025, from which:
•  US$7,37 billion has already been secured through the State Budget and contributions from development partners (US$5.46 for investment projects and US$1.91 for noninvestment program)
•  US$9.96 billion remains unfunded

Table 1: Total damage, loss, and needs by sector (in US$ billion)

Some needs have already been met by the Government of Ukraine with the support of its partners. As part of the RDNA4, eight sectors reported on needs met in the amount of over US$13 billion. Key achievements include:

• US$1.2 billion was disbursed from state budget and donor funds for housing sector recovery in 2024, mostly for compensation, repair, and reconstruction of damaged assets.
• Key repair efforts allowed the electricity import capacity to increase to 2.1 gigawatts (GW) from 1.7 GW by December 2024.
• The Ukrainian export corridor and the Danube ports cluster revitalized trade routes, handling 97.2 million tons of cargo in 2024—a 57 % increase over 2023.
• Emergency repairs were carried out on over 2,000 km of motorways, highways, and other national roads.
• 115 road bridges were restored using temporary structures, including 29 modular bridges donated by international partners.

Moving forward, Ukraine’s resilience and reconstruction efforts will depend on sustained financial backing, innovative funding mechanisms, and coordinated international cooperation. As Ukraine rebuilds, the focus on modernization, sustainability, and alignment with EU standards will be key to ensuring a stronger, more resilient future.

You can read a full report via the link.

Source: RDNA 4

Key developments for Ukraine’s Reconstruction

● The Ministry of Economy is launching a coordination platform for innovations in humanitarian demining

Ukraine's Ministry of Economy is enhancing its support for innovation in humanitarian demining by launching a dedicated platform. The key areas of operation for this initiative were introduced during a session focused on the application of innovative technologies in mine clearance.

Objectives of the platform

The Innovation Platform for Humanitarian Demining aims to establish a structured system for:

• Creating, testing, and implementing groundbreaking solutions for mine clearance.
• Integrating research and engineering advancements with the practical expertise of Ukrainian demining specialists and international experts.
• Facilitating collaboration to accelerate the removal of mines and other explosive remnants of war.
• Attracting investments and resources from international partners and companies to scale up innovations and establish production.

The platform will be a place to test and improve new technologies, such as autonomous robotic systems, drones, multi-sensor platforms and artificial intelligence for detecting explosive ordnance.

Global hub for demining innovation

As one of the world's most heavily mined regions, Ukraine serves as a critical testing ground for cutting-edge demining technologies. The insights and advancements developed through this platform could set new global standards, benefiting other countries facing similar post-conflict challenges.

By bringing together innovation, expertise, and practical experience, the platform lays the groundwork for a scalable and adaptable approach to humanitarian demining worldwide.

Source: Ministry of Economy of Ukraine

International Benchmark

● EIB’s new financial support programmes

On 10 February, the EIB President Nadia Calviño visited Ukraine, marking her first visit outside the EU since taking up office last year. During the visit,  President Calviño met with top Ukrainian officials, including President Volodymyr Zelenskyy and Prime Minister Denys Shmyhal, to discuss new financial support measures and reaffirm EIB’s long-term commitment to Ukraine.

Strengthening Ukraine's public infrastructure

As part of the EU’s €50 billion Ukraine Facility, the EIB announced a €420 million in investment for new public-sector projects to restore and protect energy supplies, heating systems and other critical infrastructure that has been damaged since Russia’s full-scale invasion in February 2022. The projects include:

• €100 million for “Ukraine Recovery III”,
• €100 million for “Ukraine Water Recovery”,
• €100 million for “Ukraine District Heating”, which will be channeled through Ukreximbank.
• €120 million to support Ukrhydroenergo, Ukraine’s largest hydropower producer, aimed at restoring hydroelectric power plants and strengthening the country’s energy grid.
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These initiatives will ensure that millions of Ukrainians in more than 100 communities have access to water, heating, hospitals, schools and housing for internally displaced persons.

Promotion of renewable energy

The EIB is also signing a €16.5 million grant from the German government with the Ministry for Development of Communities and Territories of Ukraine to promote renewable energy. This funding, provided through the EIB's International Climate Initiative Trust Fund, is part of the Ukraine Energy Rescue Plan. The grant will help to:

• integrate renewable energy systems into public buildings undergoing renovation works under EIB municipal loans.
• upgrade social infrastructure and make energy more reliable, cleaner, and less costly.
• decentralize energy generation, ensuring that critical public buildings are less reliant on electricity supplies from large power stations.

Support for small and medium-sized enterprises (SMEs)

Recognizing SMEs as the backbone of Ukraine’s economy, the EIB is providing a €100 million loan and guarantees aimed at unlocking around €400 million in lending to SMEs through key Ukrainian banks – including Ukreximbank, ProCredit Bank and Ukrgasbank.

Implementation of the EU 112 emergency call system

Another element of the package includes the roll out of the 112 emergency number with the backing of EIB. The project will be financed through:

• €40 million loan from the EIB,
• €12 million EU grant,
• additional funding from EU member states under the EU Fund for Ukraine.

The aim of the project is to expand data centres across the country and modernise their technological capabilities, ensuring the reliability and efficiency of critical services.

Through substantial investments in energy infrastructure, renewable energy projects, support for SMEs, and the enhancement of emergency services, the EIB is playing a pivotal role in Ukraine’s recovery. These initiatives are not only crucial for immediate reconstruction but also for creating a sustainable, energy-independent future for Ukraine.

Sources : EIB, EU Neighbours east 

● UK announces £55 million support package for Ukraine

On 5 February, during the visit of Foreign Secretary David Lammy to Ukraine, the UK announced a new support package totalling £55 million to enhance resilience and growth in the country.  This initiative strengthens Ukraine’s recovery efforts amid ongoing Russian aggression and includes key investments in humanitarian aid, energy sustainability, economic recovery, and social development.

1. Humanitarian assistance

The UK is allocating £3 million for deliveries of Ukrainian grain and other food supplies to Syria. In collaboration with the World Food Programme, this initiative will provide a crucial lifeline to vulnerable populations in Syria.

2. Energy sector support

A further £17 million will be used for innovative energy projects aimed at supporting Ukraine’s recovery and ensuring long-term energy sustainability. The InnovateUkraine competition will foster partnerships between British, Ukrainian, and international businesses and research institutions to develop resilient, scalable, and sustainable energy solutions for the future.

3. Economic recovery

As part of efforts to strengthen Ukraine’s private sector, the UK is providing a £10 million boost to the economic recovery programme, initially announced by the Prime Minister under the 100 Year Partnership. This funding will help renew, rebuild, and reform Ukraine’s economy, focusing on small and medium-sized enterprises.

4. Strengthening social systems and services

An additional £25 million will be directed towards enhancing Ukraine’s social systems and services. The UK will work closely with Ukraine to revitalize family and community-based services tailored to support women, children, people with disabilities, and marginalized groups.

The goal is to ensure access to effective, inclusive, and efficient social services and a safe, nurturing family environment for every child. The UK’s SPIRIT (Social Protection for Inclusion, Resilience, Innovation and Transformation) programme will bolster Ukraine’s resilience against Russian aggression by helping Ukraine build a more resilient, prosperous and barrier-free future for all.

Since the start of Russia’s full-scale invasion, the UK has committed £977 million in aid, including £477 million in humanitarian assistance. For the 2024-25 period, the UK will provide £282 million in additional support, alongside the Prime Minister’s pledge of £3 billion in military aid for this year and beyond.

Source: Gov.uk, Ministry of Foreign Affairs of Ukraine

● Switzerland commits CHF 1.5 billion to Ukraine's reconstruction and development in 2025–2028

On 12 February, the Federal Council of Switzerland adopted the 2025–28 country programme, which marks the start of a twelve-year federal support process for reconstruction, reform and sustainable development in Ukraine. CHF 1.5 billion from the international cooperation budget has been earmarked up to 2028.

Three key pillars of the 2025–2028 country programme

The Federal Council’s newly adopted country programme provides a structured approach to emergency relief, peacebuilding, and sustainable development in Ukraine. The plan prioritizes:

1. Economic recovery

The war has severely impacted Ukraine’s economy, and Swiss support aims to help rebuild it by:

• Assisting Ukrainian SMEs in gaining a foothold on the global market.
• Reconstructing urban infrastructure and repairing war-damaged areas, particularly in frontline regions.

2. Public services

A well-functioning public sector is essential for Ukraine’s stability. Switzerland will facilitate improvements in energy supply, public transportation, and water services by:

• Supporting the Ukrainian authorities in providing good quality public services free from discrimination and corruption.
• Encouraging local and regional government involvement in the reconstruction process.

3. Protection of the civilian population & peace

With the ongoing conflict, protection and security remain top priorities. Switzerland’s efforts will include:

• Providing emergency aid and humanitarian mine clearance.
• Assisting in the search for and identification of missing persons.
• Supporting documentation and prosecution of war crimes and human rights violations.

Swiss expertise will be leveraged through partnerships with governmental authorities, the private sector,the science community, and non-governmental organizations. Approximately CHF 500 million of the allocated funds will be dedicated to reconstruction efforts involving Swiss companies.

Source: The Federal Council of Switzerland

● EBRD and Citi Ukraine allocate $ 100 million revolving credit facility to support Ukrainian clients

The European Bank for Reconstruction and Development (EBRD) and Citi Ukraine have signed a US$ 100 million revolving credit facility in Ukrainian hryvnia. This initiative aims to increase the availability of the national currency to local businesses affected by the war, following a similar agreement signed a year ago.

Objectives

The primary goals of the credit facility include:

• Securing access to hryvnia liquidity,
• Providing local-currency loans directly or through domestic financial intermediaries,
• Supporting the clients liquidity, short-term working capital, and trade-finance needs,
• Reducing exposure to currency exchange-related risks.

Over the past decade the EBRD has been working increasingly with domestic stakeholders in its regions to improve the Bank’s access to local currency and support the development of domestic financial markets. The new facility in hryvnia adds to the EBRD’s local-currency toolkit in Ukraine.

Citi Ukraine’s role

For this collaboration between the EBRD and Citi Ukraine, Citi relies on its Local Currency Financing Solutions initiative for development finance institutions, launched last year. Through this initiative, Citi aims to facilitate capital mobilisation in local currencies to deliver financial stability by reducing risk, aligning with responsible banking practices and empowering local borrowers to navigate their financial obligations with greater confidence.

This partnership between the EBRD and Citi Ukraine marks an important step in supporting the country’s private sector, providing crucial resources to businesses and contributing to the stability of Ukraine's economy during the ongoing war.

Source: EBRD

● Ukraine and the United Arab Emirates signed first of its kind Comprehensive Economic Partnership Agreement

On February 17 in Abu Dhabi, Ukraine and the United Arab Emirates (UAE) concluded a Comprehensive Economic Partnership Agreement. This historic document was signed by Ukraine’s First Deputy Prime Minister and Minister of Economy, Yulia Svyrydenko, and the UAE Minister of Foreign Trade, Thani bin Ahmed Al Zeyoudi. This is the first agreement in Ukraine's history with the Gulf states.

Trade and investment liberalization

The agreement introduces free trade between Ukraine and the UAE and the liberalization of market access for goods in both countries. 99% of Ukrainian products will gain full access to the UAE market, creating substantial opportunities for exporters.

According to Ukraine’s Ministry of Economy, this partnership is expected to sustain a positive trade balance, which stood at $51.5 million in 2023, and contribute to a 0.1% increase in real GDP in the medium to long term.

New opportunities for businesses

Beyond goods trade, the agreement extends to services, investments, and digital commerce, opening up significant growth potential. Key benefits for Ukrainian businesses include:

• Simplified access to UAE markets and those of other countries in the region;
• More predictable trade conditions;
• Elimination of barriers to exports and investments.

Sectors expected to benefit include:

• metallurgy,
• food processing (especially flour milling and oil production),
• metal,
• vegetable oils.

Expanding digital trade and innovation

The agreement also opens up new opportunities for digital trade by:

• Removing tariffs on digital and electronic data transfers, including digital content;
• Establishing clear commitments on digital payments and personal data protection;
• Creating transparent rules for businesses that develop the digital economy and cross-border trade.

According to Yulia Svyrydenko, the agreement is mutually beneficial, as Ukraine and the UAE are competitive in complementary sectors. This synergy will help enhance trade flows between the two countries and strengthen their economies.

Source: Ministry of Economy of Ukraine, Ministry of Foreign Trade of the UAE

● The European Commission offered a new energy security package for Ukraine

The European Commission has announced a new support package aimed at securing Ukraine's energy system and fully integrating it within the European energy market.

Strategic leap toward energy independence

This package will allow for the full coupling of Ukraine's electricity market with the EU by early 2027, together with Moldova, as well as further integration in the EU gas sector, provided that Ukraine significantly accelerates the necessary market reforms. The European Commission will also support gas purchases to bolster energy security in Ukraine and the broader region.

Key measures

• Electricity market integration :  Full coupling of Ukraine and Moldova’s electricity markets with the EU by spring 2027, as well as further integration in the EU gas sector.
• Funding of gas purchases: The Commission, through the Ukraine Facility and its implementing partners, will assist in gas purchases, ensuring ample reserves to safeguard supply for both Ukraine and the wider region.
• Accelerated investments in renewable energy. The package will inject significant funding into Ukraine’s renewable energy sector, adding up to 1.5 GW of new generation capacity - a 25% increase in total renewable energy generation.

These new measures will build on over €2 billion of EU support delivered over the past three years to increase the resilience of Ukraine's energy system and to guarantee people's access to energy. By strengthening its ties to the EU energy market, Ukraine not only secures its power supply but also ensures the stability required for broader reconstruction efforts.

Focus on the private sector

● CourtAvenue acquires BotsCrew to expand AI Innovation

CourtAvenue, a leading digital transformation agency specializing in strategy, experience, and innovation announced the acquisition of BotsCrew, a global leader in artificial intelligence solutions, AI agents, and chatbot development. The acquisition strengthens CourtAvenue’s AI capabilities, accelerating the development of next-generation AI-driven experiences for businesses across industries.

BotsCrew: a pioneer in AI solutions

Founded in 2016 in Lviv, Ukraine, BotsCrew has established itself as a frontrunner in AI development, specializing in AI-powered agents that enhance customer interactions, streamline business operations, and drive revenue growth. Their work extends beyond chatbots, leveraging large language models (LLMs), natural language processing (NLP), and machine learning to create highly intelligent AI-driven assistants capable of autonomous decision-making and complex task execution.

Strengthening CourtAvenue’s AI portfolio

The acquisition allows BotsCrew to operate as part of CourtAvenue’s Collective companies. The team of over 60 experts, including the co-founders, will continue to lead BotsCrew within the CourtAvenue Collective, focusing on:

• AI-powered agents & automation,
• Natural language processing (NLP),
• Enterprise AI solutions at scale.

With the demand for generative AI, AI-driven automation, and enterprise AI agents at an all-time high, the acquisition positions CourtAvenue as a leader in the evolving AI landscape, delivering scalable, intelligent AI solutions that enhance efficiency and engagement.

Source: BotsCrew, CourtAvenue

● Swedish-Ukrainian software developer acquires US based IT company A Society Group, Inc

Sigma Software Group, a leading Swedish-Ukrainian global IT services provider, has announced its acquisition of A Society Group, Inc., a North Carolina-based IT and engineering consulting firm. This strategic move marks a significant milestone in Sigma Software’s expansion strategy, reinforcing its commitment to broadening its footprint in the U.S. market.

Strategic benefits of the acquisition

Sigma Software Group has been a trusted partner to North American businesses for over two decades, supporting both industry leaders like AOL, AT&T, and Motorola, as well as innovative technology startups. Since establishing its first U.S. office in 2014, the group has consistently worked to grow its local presence and ensure excellent delivery.

By integrating A Society Group, Inc., Sigma Software aims to:

• Reinforce its position as a premier IT service provider in the U.S.,
• Enhance the ability to support enterprise clients with both local and global resources, as well as premium-quality IT solutions and services,
• Solidify its reputation as a trusted partner in digital transformation, engineering, and IT consulting.

A Society Group, Inc., previously a subsidiary of Sweden-based A Society, has built a strong reputation in IT and engineering consulting, serving major clients in automotive, manufacturing, defence, and other sectors. The decision to divest its U.S. operations aligns with A Society’s strategic focus on its core brokerage services in Europe.

Source: Sigma Software Group, InVenture

● Ukrainian Defense Industry and Thales International SAS to establish joint defense enterprise

Ukraine’s state-owned defense company, Ukrainian Defense Industry, and Thales International SAS have signed an agreement to establish a joint venture. The signing took place on the sidelines of the Munich Security Conference, in the presence of Herman Smetanin, Ukraine’s Minister for Strategic Industries.

Key areas of collaboration

The joint enterprise will focus on developing cutting-edge technological solutions and providing optimized, rapid support in the following critical areas:

• Air defense systems,
• Radar technologies,
• Electronic warfare,
• Tactical communications,
• Electro-optical systems.

According to Oleh Huliak, CEO of Ukrainian Defense Industry, this collaboration with Thales will help strengthen Ukraine’s air defense against Russian threats and give Ukrainian defense engineers valuable experience working with the latest military technologies.

Event

● Business delegation to Ukraine: focus on tech and innovation

We’re excited to invite you to join a delegation of French companies exploring Ukraine’s dynamic economic and tech ecosystem. Organized by French Tech Kyiv, CCI France Ukraine, Business France Ukraine, Ukraine Committee of the French Foreign Trade Advisors, and the Economic Section of the French Embassy in Ukraine with financial support from the French Tech Community Fund, this event offers a unique opportunity to uncover Ukraine’s business potential!

Why Ukraine?

1)  Resilient IT sector

• 🚀Despite challenges, IT exports grew by almost 6% in 2022, underscoring the resilience and growth potential of this sector.
• 🖥 38% of Ukraine’s total services are computer services, making IT the largest exporter of services.
• 📈 The IT sector represents 11.6% of total exports of goods and services ranking second after food exports.

2)  French tech companies leading the way

• 🚗 BlaBlaCar, with an R&D center and bus marketplace solution, has been in Ukraine since 2014.
• 🎮 Ubisoft, employing 800+ professionals in Kyiv, is at the forefront of gaming innovation.
• 📡 NJJ Capital (personal holding company of Xavier Niel, the founder of Free in France) recently acquired Lifecell and DataGroup-Volia, strengthening its presence in telecommunications and digital services

What to expect:

• A deep dive into Ukraine’s tech ecosystem.
• Networking with top Ukrainian startups, tech leaders, and investors.
• Insightful sessions from the industry experts.
• B2B meetings and access to cutting-edge tech hubs.
• Exclusive contacts with Ukrainian governmental authorities and international financing providers.
• Personalized support from a team of experts to maximize your experience

Details

🗓 Dates: May 19–20, 2025

💶 Price: €1,850 (excl. VAT) from Warsaw for one participant per company, with the option to add an additional participant for €800.

Includes: travel (bus and train), accommodation, and meals.

📋Provisional programme for the visit: View here

Don’t miss this chance! Express your interest by March 15 via the link.