Ukraine said it would need $750bn to fund a national recovery plan as it maps out a strategy to rebuild its shattered infrastructure and revitalise its economy after war with Russia.
Prime minister Denys Shmyhal said Russia’s invasion had caused more than $100bn of damage to infrastructure and demanded that the “key source” of funds for reconstruction should be the confiscated assets of the Russian government and its oligarchs.
“The Russian authorities unleashed this bloody war and caused this massive destruction, and should be held accountable for it,” the prime minister told the Ukraine Recovery Conference in Lugano, Switzerland. “Our goal is not just to restore glass and concrete but to build a new country.”
Ukrainian officials are meeting representatives of the European Commission and lenders including the European Bank for Reconstruction and Development in Switzerland for two days of talks over the costly rebuilding programme once war ends.
The rebuilding plans will involve governments and agencies around the world including lenders such as the World Bank and European Investment Bank. Talks were given momentum by the EU’s decision last month to acknowledge Ukraine as a candidate to join the bloc.
However, the country’s partners are just in the early stages of identifying how to fund the vast cost of reconstruction.
The EU is still trying to finalise up to €9bn of emergency assistance to help shore up Kyiv’s public finances, before it begins to map out how to raise the enormous sums needed for longer-term reconstruction.
Shmyhal said the funding would need to be grants and soft loans from international organisations and partner countries, as well as from the private sector and corporations, and from Ukraine’s own national budget. But he added: “We believe the key source of recovery should be confiscated assets of Russia and Russian oligarchs.”
EU member states have frozen slightly less than €14bn of assets belonging to sanctioned people and entities including yachts, cars and houses, according to figures compiled by the commission. The value of the Russian central bank’s frozen foreign exchange reserves could be much higher.
Russia said in March that it had lost access to about half of its reserves, or about $300bn, after G7 nations imposed sanctions on the Russian central bank.
Josep Borrell, the EU’s high representative for foreign policy, said in May that he would be in favour of seizing Russia’s frozen foreign exchange reserves and using them for reconstruction, describing such a move as being “full of logic”.
However, confiscating Russian assets and using them to pay for Ukraine’s reconstruction is legally and politically complex.
US Treasury secretary Janet Yellen has said confiscating the Russian central bank’s assets should only be done in co-ordination with allies and was a step not to be undertaken lightly.
Shmyhal said there would be three phases of the recovery plan — an immediate stage focused on rebuilding basic infrastructure such as water pipes; a second stage involving the construction of schools and temporary housing; and a final stage targeting the “long-term transformation” of the country and its economy.