The updated Rapid Damage and Needs Assessment (RDNA2), released in March, estimates that the current cost of reconstruction and recovery stands at $411b over the next 10 years and combines both needs for public and private funds. In 2023 alone, Ukraine will need faces a funding gap of $11b for this year. This includes $6 billion in unfunded budget needs, $3.3 billion in financing for state-owned enterprises (SOEs), and $1.5 billion to mobilize the private sector.
The highest estimated needs are in transport, housing, energy, social protection and livelihoods, explosive hazard management, and agriculture.
Ukraine Needs in Numbers
- 22% transport
- 17 % housing
- 11% energy
- 10% social protection and livelihoods
- 9% explosive hazard management
- 7% agriculture
The RDNA2 covers the one year since Russia’s invasion, from Feb 2022 to Feb 2023, and evaluates war impacts across 20 sectors. This analysis is helping the Government and donors to identify the priorities for recovery while continuing to support the provision of core services like health, education and social protection.
World Bank Group Financing
The World Bank Group is leveraging its broad range of financing instruments to facilitate the rapid disbursement of funds to meet Ukraine’s urgent needs is mobilizing financing and donor partner support. The Bank have expanded existing projects, established multi-donor trust funds, and channeled guarantees and parallel financing from donor countries.
The World Bank Group is uniquely positioned to provide a fast and flexible platform for donor contributions with corresponding supervision to verify that money goes where it is intended.
Since the start of Russia’s invasion, a large part of support mobilized through the World Bank has been through the project Public Expenditures for Administrative Capacity Enhancement (PEACE) to help the Government of Ukraine meet urgent needs, including the provision of core public services such as health, education, and social protection. This support has reached 13 million Ukrainians, and is helping to provide wages for hospital workers, government and school employees, pensions for the elderly, salaries for public servants, and social programs for the vulnerable. The Bank has deployed a range of mechanisms, including expenditure verification, beneficiary complaint monitoring, procedure reviews, and surveys, to ensure that money goes where it is intended.
The World Bank has introduced Framework Projects to support recovery and build capacity for reconstruction in health, energy and transport sectors. These are Bank-supported emergency operations that mobilize partner resources through an innovative and flexible design that allows funds to be disbursed quickly, can be scaled as necessary, and can absorb additional financing as it becomes available. They include appropriate fiduciary, environmental and social safeguards. IBRD funding for these projects is secured thanks to the bilateral guarantees provided by development partners.
The URTF is part of the World Bank Group’s Multi-Donor Resources for Institutions and Infrastructure (MRII - МРІЇ) for Ukraine Facility to support Ukraine through a coordinated WBG approach among the World Bank, IFC, and MIGA. The MRII takes a phased and multi-pronged approach to mobilizing financing and coordinating sources of support through guarantees, co- and-parallel financing, and other financial instruments. All MRII facilities allow donors to support Ukraine in addressing its immediate needs to sustain key public services, the private sector, and wider recovery and reconstruction needs identified in the RDNA2.
To swiftly mobilize efforts for reconstruction, the Bank has established the Ukraine Relief, Recovery, Reconstruction and Reform Trust Fund (URTF), a multi-donor fund to channel grant contributions from donor partners. The URTF’s objectives are to help sustain the country’s administrative and service delivery capacity, and conduct relief efforts, as well as to support the planning and implementation of Ukraine’s recovery, resilient reconstruction, and reform agenda.
The URTF supports the Bank’s Framework Projects and ensures that Ukrainian authorities can quickly and effectively utilize these critical investments and leverage the multiple sources of financing efficiently and at scale. Contributors to the URTF include Austria, Canada, Iceland, Japan, Lithuania, the Netherlands, Norway, Sweden, Switzerland.
IFC is providing working capital to businesses and helping to keep Ukraine’s trade lines open. IFC has made investments totaling $95m, including injection of capital, to help create jobs, accelerate the growth of Ukraine's technology sector and contribute to food security through sourcing and exporting grains from Ukraine. IFC and the EU are also channeling €50m in grants to provide temporary accommodations for internally displaced people and to restore war-damaged residential buildings. In December, IFC announced a $2b package to support Ukraine’s private sector focusing on agribusiness and on the provision of essential goods and services. IFC is also supporting the government to develop an approach to attract private investment and know-how for the reconstruction.
MIGA has issued more than $116m in guarantees to Ukraine since the war began. To address the shortage of insurance capacity for war risk, MIGA has established a trust fund that has been seed-funded by Japan. This and future donor contributions, combined with MIGA’s own capital, could help mobilize public and private reinsurance in support of projects in the energy, agribusiness, manufacturing, and logistics sectors. MIGA also is partnering with EBRD to support short-term trade finance guarantees for Ukraine to serve humanitarian needs and help keep industries like agriculture going while providing critical imports needed for production.
Donor governments: The United States, Austria, Belgium, Denmark, Finland, Germany, Italy, Japan, Latvia, Lithuania, Iceland, Netherlands, Norway, Sweden, Switzerland, Spain, and United Kingdom.
IFIs: EIB, EBRD, EC, IMF, CEB
Learn more: World Bank Financing Support to Ukraine