Policy brief “Ukraine energy sector recovery: mitigating corruption risks”
In cooperation with the European Union Anti-Corruption Initiative in Ukraine (EUACI), DiXi Group think tank has prepared a policy brief on the key risks in the management of recovery process of the energy sector. The analysis and recommendations provided focus on optimization of anti-corruption measures during the planning and performance of reconstruction works.
Ukraine’s needs for immediate recovery in the energy sector are as pressing as its ambitions in longterm reconstruction and economic transformation. According to the Rapid Damage and Needs Assessment (RDNA2), in 2023 alone, 3.3 billion USD should be spent in energy. Total needs in energy and extractives, for the whole period of reconstruction (2023-2033) are estimated at 47 billion USD. Yet despite the high total recovery bill and urgent need to secure stable energy supplies before the 2023/2024 winter season, there is no single entity taking primary responsibility (ownership) for the reconstruction process. As identified, among the actors responsible are Ukrenergo (~600 m USD), distribution system operators, the Ministry of Energy (~210 m USD), and the Ministry of Infrastructure
jointly with the State Agency for Recovery (~700 m USD).
As the system for recovery and reconstruction management is being established, we identified andanalyzed following options (models) of its design:
● “Donors leadership” with responsibility for project management, incl. procurement and corruption risks management, transferred to the international (donor) community;
● “National leadership” with full responsibility on entities (SOEs and public authorities) having the capacity to implement projects both under ‘standard’ public and donor procurement standards;
● “Special (centralized) procedure” with the Agency for Recovery being a key central governmental authority responsible, acting as ‘single window’ for the donor community and coordinating all the projects.
Depending on the design and role of respective players, different models of anticorruption ‘infrastructure’ – i.e. properly educated and trained staff that is responsible for ensuring transparency, integrity and preventing appearance of corruption practices – apply.
