Unused billions for reconstruction: what prevents Ukraine from effectively using resources
10 April 22:43
In 2024, Ukraine did not spend more than UAH 7 billion of the funds allocated for the country’s reconstruction. This is stated in the report of the analytical project “Controlling the Costs of Ukraine’s Recovery,” Komersant ukrainskyi reports.
According to the study, the Ministry of Community Development has funded 640 projects totaling UAH 17.7 billion, although it had almost UAH 25 billion at its disposal. Thus, about 7.3 billion remained unused.
Subventions from the state budget to local communities remained the main funding mechanism in 2024. However, even with the support of international financial organizations such as the World Bank and the European Investment Bank, actual expenditures were significantly lower than planned.
For example, only UAH 400 million of the envisaged UAH 2.3 billion was used for Ukraine’s recovery programs. Under the emergency loan program, UAH 721 million out of the planned UAH 4.5 billion was spent.
In general, underfunding was recorded for all key spending units. The Recovery Agency has used 78% of the funds, the Ministry of Community Development – 70% for reconstruction programs and 40% for national programs.
Ukraine currently has seven main sources of funding for reconstruction: The Fund for Elimination of the Consequences of Armed Aggression, international donors, the state budget reserve fund, local budgets, Ukraine24 funds, the Energy Support Fund, and charitable organizations.
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Why doesn’t the money work? Experts name several reasons.
First, it is bureaucracy. Projects are launched late, passports of budget programs are approved late, tenders are disrupted or delayed for months. For example, in one of the flagship projects – the comprehensive restoration of 26 settlements – only UAH 559 million of the envisaged UAH 3.35 billion was used by the end of 2023. This is less than 17%.
Second, legal complications and overregulation. In many cases, communities cannot quickly conclude contracts, hold transparent tenders, or approve documentation. In addition, there is often no standardized approach: each region “reinvents the wheel” on its own, which slows down the process even more.
Third, security. In many frontline areas, it is simply physically impossible to start reconstruction due to constant shelling, mine danger, and a lack of construction workers and equipment. And these are the regions that often need reconstruction the most.
And fourthly, there is a staff shortage and institutional weakness. Many local governments simply do not have specialists who know how to manage large infrastructure projects, plan funds, and keep records. There is money, but not enough people who can spend it wisely.
To change the situation, Ukraine needs not only financial assistance, but also institutional support: ready-made management personnel, clear algorithms, digital control systems, a more flexible legal framework, and political will at all levels.
