The Ukrainian government is preparing to launch a Reconstruction Fund with its own dedicated funding source, Deputy Minister for Communities and Territories Development Alyona Shkrum said in an interview with Forbes Ukraine. The ministry is working on establishing a separate institution that could, in the future, be financed through a special tax, similar to mechanisms previously implemented in Japan.
According to Shkrum, this step is necessary because no international bank has been designed to finance a country’s recovery during wartime, while existing institutions are burdened with lengthy bureaucratic procedures and strict requirements for state guarantees.
Ukraine faces an urgent need to mobilize funds, as grants account for only about 5–10% of the required financing, while loans would have to be repaid by future generations. The deputy minister stressed that this situation is unfair and requires the search for alternative financing mechanisms.
At the initial stage, the key task is to establish the fund’s structure, launch the institution, and begin accumulating contributions from international partners, even if these are relatively modest at the outset. “The most important thing is to get the fund operational,” Shkrum said.
According to the updated Rapid Damage and Needs Assessment (RDNA3), prepared by the Ukrainian government and the World Bank, the total cost of Ukraine’s recovery and reconstruction as of February 2025 is estimated at $524 billion, to be spread over the next decade.
The scale of destruction in Ukraine far exceeds that of many other conflicts. For comparison, damage in Gaza was estimated at $53 billion—ten times less than Ukraine’s losses—while the destruction in Bosnia after the Yugoslav wars amounted to roughly half of Ukraine’s losses. In Ukraine, 13% of the total housing stock has been destroyed, which Shkrum said is equivalent to four cities the size of Milan being completely wiped out.
