Ukraine begins calculating the reconstruction bill

LondonAfter the war business will come the reconstruction business. On December 10, President Volodymyr Zelensky shared a significant message on social media. He was referring to the virtual meeting he held that day with, among others, US Treasury Secretary Scott Bessent; President Donald Trump's son-in-law, businessman Jared Kushner; and Larry Fink, the head of the world's largest asset manager. BlackRock, one of the true masters of the world, due to the extent and diversity of its financial tentacles. Zelensky wrote: "This could be considered the first meeting of the group that will work on a document relating to the reconstruction and economic recovery of Ukraine."

There is more than one of these, even though the bombs keep falling, and For now, it doesn't seem like they need to stop in the coming days.For this reason, it is impossible to make a reasonable estimate of the final cost – in material goods – that, after almost four years of war, has resulted the Russian invasion.

The World Bank, in collaboration with the European Union and the Ukrainian authorities, published in February the Fourth Rapid Damage and Needs Assessment (RDNA4), in which it quantified the "direct damages" caused by the war at $176 billion. This estimate only included the destruction caused in the years 2022, 2023, and 2024. Therefore, the total will be much higher, considering that Russian attacks have increased exponentially since 2025. Housing, energy, communications, industry, and agriculture account for the majority of the damage. The calculation does not include the healthcare costs associated with all of this.

Furthermore, it stated that "across all sectors assessed, the disruptions to economic flows and production, along with the additional costs associated with the invasion—debris management, for example: some 1.5 billion tons, according to Kiiv—are quantified as an economic loss greater than 0."

But that's not all, because the same analysis suggested that "recovery and reconstruction needs over the next decade are estimated at nearly US$524 billion." Current calculations predict that the sectors requiring the most investment are, in this order, those already mentioned: housing (33%), transportation (21%), energy and extractive industries (12%), and trade and industry (10%). But this figure of over half a trillion dollars does not include defense costs, which will be very high for the future Ukraine if it wants to maintain a deterrent force to prevent further attacks.

Before continuing, however, we must take a look at the state of Kyiv's coffers. According to estimates from the International Monetary Fund (IMF), the European Commission, and the Kyiv government, the country will need €135.7 billion over the next two years to cover both military expenditures and the operation of the state. This is in the best-case scenario that the war stops by the end of 2026.

Of that total sum, Ukraine will require approximately 71.7 billion in 2026, of which about 51.6 billion is related to military needs, while 20.1 billion will be allocated to civilian and public administration expenses. In 2027, a total of 64 billion is projected, with 31.8 billion for defense and 32.2 billion for ordinary operations. Without filling these gaps, Kyiv could go bankrupt in April, and the eastern front would collapse like a house of cards.

A first patch was put in place, the early Friday morning, the European UnionThe EU has issued €90 billion in debt to support the country over the next two years. However, nearly €46 billion is still needed, which currently lacks guaranteed funding. The EU has bought time. The elephant in the room continues to be the frozen Russian assets.These are issues that will be discussed again in the coming months.

With bankruptcy looming in the short term, the big debate is no longer just how to survive, but how to rebuild the country. And above all, with what money, under what conditions, and with whom. Because, unlike the Marshall Plan—financed entirely with US public funds—with which the United States rebuilt Europe at the end of World War II, the reconstruction of Ukraine is being designed as a hybrid ecosystem in which public money, multilateral loans, state guarantees, and international private capital coexist. Not by chance, as Zelensky revealed, Larry Fink participated in the aforementioned meeting. BlackRock doesn't rebuild countries out of philanthropy.

The EU will have to pay more than anyone else

The central pillar of this framework is the European Union, which has assumed the role of Ukraine's support. Brussels, most committed to Kyiv, follows the reasoning of Polish Prime Minister Donald Tusk, who, upon entering the European Council meeting on Thursday, expressed it dramatically: "Now we have a simple choice: either money today or blood tomorrow." Translated to the immediate future, this means: "money tomorrow or blood tomorrow." Because it is in the vital interest of the EU and the rest of the continent that Ukraine be militarily strong and economically reborn. Even more so after the betrayal of a Washington in the hands of Donald Trump.

With the liquidity bailout recently approved, Brussels has already launched the so-called Ukraine FacilityA tool endowed with up to €50 billion until 2027 combines grants and very long-term loans. The objective is not only to rebuild bridges, schools, or power plants, but also to condition aid on structural reforms: governance, the rule of law, the fight against corruption, and progressive alignment with the EU. In other words, to rebuild Ukraine in the image of the EU.

In parallel, the World Bank has become the great technical engine of reconstruction. It not only quantifies damages, as mentioned, but also manages multilateral trust funds that allow for the payment of public sector salaries, pensions, and basic services, preventing social collapse. This support is key: without a functioning state, no Marshall Plan, public, private, or mixed, is possible. The International Monetary Fund, for its part, acts as a guarantor of macroeconomic orthodoxy, with conditional support programs that pave the way so that, one day, private capital can enter without fear of financial collapse.

The US approach is very different. Washington has avoided European-style budgetary commitments and has opted for mechanisms to attract private investment. The reconstruction investment fund promoted by the US Treasury Department clearly points in this direction: to turn Ukraine into a long-term investment platform in strategic sectors. from energy to critical minerals...including logistics infrastructure.

And with the foreseeable intervention of private capital, the narrative shifts. It will no longer be just a humanitarian or geopolitical operation, but one of the major global business deals of the coming decades. Large European construction and energy companies—from Vinci or ACS to Siemens Energy, Enel, or Holcim—have a head start, due to geographical proximity and because the EU will bear the brunt of the cost.

North American companies, on the other hand, may find their niche in high value-added sectors: digitalization of the state, data infrastructure, secure communications, and cybersecurity. Players like Microsoft, Amazon, Palantir, and SpaceX come into play. And in a country that, even in peacetime, will always have to keep a wary eye on Moscow, the line between civilian reconstruction and security will be blurred, opening the door to the participation of large defense groups. The names are the usual ones: Lockheed Martin, Raytheon, Rheinmetall, and Thales, in projects that will combine infrastructure, technology, and military capabilities. Another crucial sector will also be involved: insurance, guarantees, and risk financing. Without coverage against political and security risks, no major private investment will come to Kyiv. Here, Western public institutions will have to act as insurers of last resort, socializing risks so that private capital can privatize profits. But, for now, the war continues. And the only certainty is that the bill is going to keep rising.