Ukraine needs $524 billion to recover, rebuild after three years of war, World Bank says

By Andrea Shalal

WASHINGTON (Reuters) - The estimated cost to rebuild Ukraine's economy after Russia's invasion has risen to $524 billion, nearly three times its expected 2024 economic output, the World Bank, United Nations, European Commission and the Ukrainian government found.

A new study by the institutions included data from Russia's invasion three years ago through December 31, including a 70% increase in damages to Ukraine's energy infrastructure from Russian attacks.

It showed an increase of over 7% from the last estimate of $486 billion one year ago, with housing, transport, energy, commerce and education being the most affected sectors.

The study quantifies the direct physical damage to buildings and other infrastructure, the impact on people's lives and livelihoods and the cost to "build back better," the institutions said in a joint news release.

U.S. President Donald Trump is pushing to end the war through separate talks with Russia and Ukraine, telling reporters during a meeting with French President Emmanuel Macron that a deal could be reached in weeks.

"In the past year, Ukraine's recovery needs have continued to grow due to Russia's ongoing attacks," Ukraine's Prime Minister Denys Shmyhal said in a statement.

Ukraine's government has allocated $7.37 billion to address priority needs for 2025, with support from donors, but still has a financing gap of nearly $10 billion, the joint statement said.

The latest assessment, using a universal methodology to assess damages and needs, found that direct damage in Ukraine from Russian attacks has risen to $176 billion from $152 billion reported in February 2024.

About 13% of Ukraine's total housing stock has been damaged or destroyed, affecting more than 2.5 million households.

It cited a 70% increase in damaged or destroyed assets in the energy sector since the last assessment one year ago, including power generation, transmission, distribution infrastructure and district heating.

The housing sector accounted for about $84 billion of the total long-term needs, followed by transport with almost $78 billion, energy and mining with almost $68 billion, commerce and industry with over $64 billion, and agriculture with over $55 billion.

The cost of debris clearance and management alone was pegged at almost $13 billion, the report said.

Antonella Bassani, the World Bank's vice president for Europe and Central Asia, said the assessment showed the progress Ukraine has already made on physical and economic recovery, reforms and reconstruction needs.

It excluded over $13 billion in needs across eight sectors that have already been met by Ukraine with the support of its partners and the private sector. That includes some $1.2 billion disbursed from state budget and donor funds for housing needs and over 2,000 km (1,243 miles) of emergency road repairs.

(Reporting by Andrea Shalal; Editing by Richard Chang)