According to the fifth Rapid Damage and Needs Assessment (RDNA5), direct damage to Ukraine’s infrastructure has already reached EUR 165 billion, economic losses amount to EUR 565 billion, and reconstruction needs over the next ten years are estimated at EUR 498 billion.
At the same time, only EUR 17.2 billion was allocated for reconstruction between 2022 and 2025, accounting for approximately 3.5% of total needs. For priority projects planned for 2026, the financing gap exceeds EUR 8 billion.
The report, prepared by members of the RISE Ukraine Coalition, including the DiXi Group team, ahead of the Ukraine Recovery Conference (URC 2026), highlights substantial progress in establishing Ukraine’s reconstruction architecture. Key building blocks are already in place, including public investment management (PIM) reform, the DREAM digital ecosystem, new mechanisms for prioritising reconstruction projects, civil society monitoring practices, and international financing instruments.
At the same time, the system continues to face a number of challenges, including:
- institutional overload and unclear distribution of mandates;
- insufficient human and managerial capacity at the local level;
- fragmented donor financing and inadequate coordination among stakeholders;
- limited participation of civil society in decision-making processes;
- the lack of full operationalisation of the Build Back Better principle as a practical reconstruction standard.
The core risk is that Ukraine may formally develop advanced rules and digital systems, while on-the-ground implementation remains constrained by weak coordination, limited capacity, incomplete and fragmented financing arrangements, insufficient transparency, and the lack of systematic engagement of civil society.
Key recommendations
Strengthen reconstruction governance
by clarifying mandates, and improving coordination among the Ministry for Development, the Ministry of Finance, the Ministry of Economy, SARDI, sectoral ministries, oblast authorities, and hromadas. Consider reforming the Agency for Restoration into a single legal entity with territorial units, and revising its functions, management procedures, oversight mechanisms, and implementation standards.
Make PIM the backbone of reconstruction planning and financing.
Align donor financing cycles with Ukraine’s PIM and budget cycles; strengthen feedback to hromadas; simplify procedures for smaller projects where appropriate; finalise sectoral strategies; and ensure DREAM is fully deployed and integrated into budgeting, implementation, and monitoring.
Invest in local institutional capacity.
Support hromadas with project preparation, feasibility studies, cost-benefit analyses, environmental assessments, procurement, supervision, and public consultations. Capacity building should also cover the State Treasury, the State Audit Service, sectoral ministries, local CSOs, and implementing agencies.
Improve IFI and donor coordination around national systems.
IFIs and international partners should align their support with PIM, DREAM, sectoral strategies, BBB, and local needs. They should consider financing not only assets but also project preparation, technical expertise, institutional capacity, supervision, and monitoring.
Transform transparency from a procurement-stage principle into a full-cycle accountability system.
Ensure the reliable operation of public digital tools, remove unlawful or unjustified data restrictions, disclose key implementation documents for major contracts, strengthen public access to project progress data, and use DREAM as a practical tool for official monitoring and civil society oversight including formal complaints management. Existing civil-society tools, including BRP.org.ua, can support coordination of civil monitoring of public investment projects.
Operationalise Build Back Better through clear national sector -specific criteria, benchmarks, guidance, and monitoring indicators.
BBB should be embedded across PIM, project design, procurement, technical documentation, financing decisions, and reporting. It should particularly address resilience, energy efficiency, accessibility, environmental sustainability, lifecycle costs, and social inclusion issues.
Strengthen governance of energy reconstruction as a key sectoral test of the reconstruction architecture.
The NECP should anchor reconstruction and long-term
transformation of Ukraine’s energy and adjacent sectors with Municipal Energy Plans and
Regional Resilience Plans aligned under a single multi-tier governance system. This should be supported by digital monitoring tools, open data on financing and implementation, predictable regulation, and the Energy Efficiency First principle. It also requires more proactive procurement of critical equipment with long production lead times, decentralised strategic reserves, and financing instruments that support distributed energy resources, decarbonisation, affordability, and private investment.
Strengthen the role of businesses in reconstruction.
Businesses are essential for project implementation, local supply chains, job creation, and long – term economic resilience. Their stronger involvement can help reduce excessive dependence on external financing and ensure that reconstruction resources support domestic economic capacity. This requires transparent and competitive public procurement, predictable regulation, proportionate qualification requirements, timely payments, fair access to reconstruction opportunities, and safeguards against market capture.
Integrate human-capacity constraints into reconstruction decisions.
Project pipelines should reflect not only damage and needs but also implementation capacity, labour availability, municipal staffing, contractor markets, supervisory capacity, and the long-term sustainability of reconstructed infrastructure.
Strengthen discipline in reconstruction financing.
Emergency funds should be reserved for genuinely urgent and unforeseen needs, while predictable infrastructure expenditure should be financed through stable budget programmes. Confiscated russian assets should become a more practical and predictable source of financing, supported by stronger domestic capacity to identify, manage, and allocate them transparently.