Latvian roofing companies and South Korean trade specialists. Fuel cell manufacturers from Denmark and timber producers from Austria. Private equity titans from New York and concrete plant operators from Germany. Thousands of businesses around the globe are positioning themselves for a possible multibillion-dollar gold rush: the reconstruction of Ukraine once the war is over.
Russia is stepping up its offensive heading into the second year of the war, but already the staggering rebuilding task is evident. Hundreds of thousands of homes, schools, hospitals and factories have been obliterated along with critical energy facilities and miles of roads, rail tracks and seaports.
The profound human tragedy is unavoidably also a huge economic opportunity that Ukraine’s president, Volodymyr Zelensky, has likened to the Marshall Plan, the U.S. program that provided aid to Western Europe after World War II. Early cost estimates of rebuilding the physical infrastructure range from $138 billion to $750 billion.
The prospect of that trove is inspiring altruistic impulses and entrepreneurial vision, savvy business strategizing and rank opportunism for what the Ukrainian chamber of commerce is trumpeting as “the world’s largest construction site!”
Mr. Zelensky and his allies want to use the rebuilding to stitch Ukraine’s infrastructure seamlessly into the rest of Europe.
Yet whether all the gold in the much-anticipated gold rush will materialize is far from certain. Ukraine, whose economy shrank 30 percent last year, desperately needs funds just to keep going and to make emergency repairs. Long-term reconstruction aid will depend not only on the outcome of the war, but on how much money the European Union, the United States and other allies put up.
And though private investors are being courted, few are willing to risk committing money now, as the conflict is entrenched.
Ukraine and several European nations are pushing hard to confiscate frozen Russian assets held abroad, but several skeptics, including officials in the Biden administration, have questioned the legality of such a move.
Nonetheless, “a lot of companies are starting to position themselves to be ready and have some track record for this time when the reconstruction funding will be coming in,” said Tymofiy Mylovanov, a former economy minister who is president of the Kyiv School of Economics. “There will be a lot of funding from all over the world,” he said, and businesses are saying that “we want to be a part of it.”
More than 700 French companies swarmed to a conference organized in December by President Emmanuel Macron. And on Wednesday, the Finnish Confederation of Industries sponsored an all-day webinar with Ukrainian officials so companies could show off their wastewater treatment plants, transformers, threshers and prefabricated housing.
Sergiy Tsivkach, the executive director of UkraineInvest, the government office dedicated to attracting foreign investment, is glad for the interest. He was in Lviv last week to meet with international investors. But he emphasized a crucial point.
“They all say, ‘We want to help in rebuilding Ukraine,’” Mr. Tsivkach said. “But do you want to invest your own money, or do you want to sell services or goods? These are two different things.”
Most are interested in selling something, he said.
“There’s so many initiatives, it’s hard to know who’s doing what,” said Sergiy Tsivkach, the executive director of UkraineInvest, the government office dedicated to attracting foreign investment. Credit...Maciek Nabrdalik for The New York Times
That was clearly evident at the Warsaw conference.
What Ukrainian and foreign companies wanted to know was: Who will decide on the contracts, and how do they apply?
“Hundreds of companies have been asking me this,” said Tomas Kopecny, the Czech government’s envoy for Ukraine.
For businesses, a crucial issue is who will control the money. This is a question that Europe, the United States and global institutions like the World Bank — the biggest donors and lenders — are vigorously debating.
“Who will pay for what?” Domenico Campogrande, director general of the European Construction Industry Federation, said from the stage.
Ukraine has made clear there will be rewards for early investors when it comes to postwar reconstruction. But that opportunity carries risk.
Danfoss, a Danish industrial company that sells heat-efficiency devices and hydraulic power units for apartment and other buildings, has been doing business in Ukraine since 1997. When the war started last February, Russian shelling destroyed its Kyiv warehouse.
Danfoss has since focused on helping with immediate needs in war-torn regions and in western Ukraine, where millions of people displaced from their homes have been forced to settle in temporary shelters.
“For now, all efforts are going toward maintaining a survival mode,” said Andriy Berestyan, the company’s managing director in Ukraine. “Right now, nobody is really looking for major reconstruction.”
Things had been going better for the company since last summer as Ukraine pushed back Russian advances. By October, new orders for Danfoss’s products were rolling in, and Mr. Berestyan restored Danfoss’s distribution center in Kyiv. Then Russia started dropping bombs en masse. Power and water were widely cut off, forcing Ukraine — and businesses — to swing back to dealing with emergencies.
Even so, he said, Danfoss is keeping its eye on the long term. “Definitely there will be rebuilding opportunities,” he said, “and we see a huge, huge opportunity for ourselves and for similar companies.”
A man and woman walk by a restaurant in Lviv whose awning reads “Epic Cheeseburger Cafe.” The man has a small dog on a leash by his side.
The question of who will control the money invested in Ukraine is one that Europe, the United States and global institutions like the World Bank are debating. Credit...Maciek Nabrdalik for The New York Times
That groundwork is being laid in places like Mykolaiv, one of the hardest-hit regions, where numerous Danish companies have been working. Drones operated by Danish companies have mapped every bombed-out structure, with an eye toward using the data to help decide what reconstruction contracts should be issued.
The information would help companies like Danfoss evaluate the potential for business, and eventually bid on contracts.
Other governments that are expected to contribute to Ukraine’s reconstruction are also offering financial support for domestic firms.
Germany announced the creation of a fund to guarantee investments. The plan will be overseen by the global auditing giant PwC and would compensate investors for potential financial losses if businesses were expropriated or projects were disrupted.
France will also offer state guarantees to companies doing future work in Ukraine. Bruno Le Maire, the finance minister, said contracts worth a total of 100 million euros, or $107 million, had been awarded to three French companies for projects in Ukraine: Matière will build 30 floating bridges, and Mas Seeds and Lidea are providing seeds for farmers.
Private equity firms, too, have an eye on business opportunities. President Zelensky sealed a deal late last year with Laurence D. Fink, the chief executive of BlackRock, to “coordinate investment efforts to rebuild the war-torn nation.” BlackRock, the world’s largest asset manager, will advise Kyiv on “how to structure the country’s reconstruction funds.” The work will be done on a pro bono basis, but promises to give BlackRock insights into investors’ interests.
Mr. Fink was brought into the effort by Andrew Forrest, a gregarious Australian mining magnate who is the chief executive of Fortescue Metals Group. Mr. Forrest announced a $500 million initial investment in November, from his own private equity fund, into a new pot of money created for rebuilding projects in Ukraine. The fund would be run with BlackRock and aims to raise at least $25 billion from sovereign wealth funds controlled by national governments and private investors from around the world for clean energy investments in war-torn areas.
Mr. Forrest has courted Mr. Zelensky, wearing a Ukrainian flag pin in his lapel and presenting the Ukraine president with an Australian bullwhip during a visit to Kyiv last year. But in a sign of how cautious investors remain, Mr. Forrest said capital would be made available “the instant that the Russian forces have been removed from the homelands of Ukraine” — but not before.
