Ukraine Reconstruction Project: Challenges and Opportunities for Foreign Businesses

Ukraine Reconstruction Project:

By Deborah Ruff, Julia Kalinina Belcher, and Diana Danyshenko

For foreign businesses interested in getting a piece of the pie that is the Ukraine Reconstruction Project, there are challenges to consider before you commit. Let’s explore them.

In March 2023, the World Bank estimated the investment required to rebuild Ukraine at 411 billion USD. As the war continues, that figure continues to grow.
In June 2023, the Ukrainian Government pledged at the Ukraine Recovery Conference (URC) in London to “build back better”. This ambitious target will require the mobilisation of both domestic and international support and the collaboration of state and private actors from across the globe. Bringing about Ukraine’s recovery will be challenging but will also present stakeholders with significant opportunities.

The reconstruction process is already underway


Those waiting for the war to end before seeking to contribute to Ukraine’s recovery efforts may find that they are too late: reconstruction is already underway, focused mainly on clearing debris, removing explosive ordnance, and repairing critical transport and communications infrastructure. However, medium- to long-term opportunities will involve a wide range of programmes, including in the following areas:


Despite disruptions and risks, the energy sector is and will remain one of the top priorities for future investment.

The development of digital infrastructure will be key to ensuring not only fast and reliable connectivity but also to reversing the “brain drain” of Ukrainian academics, researchers and other human capital who will be key to Ukraine’s future.

The Ukrainian government’s Energy Strategy to 2050 aims to transform Ukraine into a source of clean, renewable energy for Europe with a mix of investment opportunities for new energy capacities in wind generation (capacity of 140GW), solar generation (94GW), energy storage (38GW), nuclear generation (30GW), combined heat and power (CHP) and bioenergy (18GW), and hydropower (9GW). Foreign and domestic companies operating in the green energy sector are expected to benefit from numerous opportunities.

Ukraine’s largely untapped biomethane resources, a sustainable alternative to conventional natural gas, present an opportunity for foreign and domestic investors. The first biomethane facility was connected to the gas distribution network earlier this year, and new legislation was passed in August 2023 with a view to attracting new investment in the biogas and biomethane sectors.

Ukrainian nuclear energy plans are equally ambitious. In April 2023, Ukraine’s Energoatom, the state-owned nuclear energy generating company, signed a deal for the expedited construction and commissioning of up to 20 small modular reactors, with a pilot project anticipated by March 2029.

Ukraine’s energy sector is an attractive investment destination due to its diverse energy resources, vast renewable energy potential, and strategic location as a European energy transit hub.


The Ukrainian government at the URC set out its vision for infrastructure and housing reconstruction. Part of this programme will involve expanding all existing transport infrastructure, from ports, harbours and waterways to airports, roads and railways. Ukraine aims to ensure quick links to Europe.

Several companies have already signed MOUs with the Ukrainian government with a view to collaborating on infrastructure projects.


Ukraine’s tech sector has emerged as a significant strategic asset, offering critical economic support, enhancing the nation’s cybersecurity capabilities, and equipping the Ukrainian military with cutting-edge innovations.

Engaging in reconstruction projects and financing may trigger compliance risks under complex US, EU and UK sanctions regimes as well as Ukrainian national sanctions laws.

The development of digital infrastructure will be key to ensuring not only fast and reliable connectivity but also to reversing the “brain drain” of Ukrainian academics, researchers and other human capital who will be key to Ukraine’s future. Investment in the country’s burgeoning tech sector, as well as partnerships and initiatives such as the UK-Ukraine Tech Bridge, will support inflows of talent. To encourage this, Diia City, a special low-tax regime for IT businesses, is being implemented by the Ukrainian government.


Foreign businesses

Foreign businesses could face some potential challenges.

Identifying opportunities

The Ukrainian government has established a new state digital “ecosystem” — DREAM— intending to implement the highest standards of transparency and accountability for all stages of reconstruction projects in real-time. However, the risks of uncompetitive behaviour and corruption remain. The support of international and local counsel will be paramount in order to ensure opportunities are grasped and rigid procurement requirements complied with.

Evolving regulatory landscape

As part of its application for EU membership, Ukraine will need to bring its legislation in line with EU law. Prospective participants seeking to take part in the reconstruction efforts will need to ensure they keep abreast of such developments.

As part of this process, the Ukrainian Parliament in August 2023 adopted Law No.5431, kickstarting the reform of competition law, and approved a law to prevent the manipulation of energy markets.

Choice of law

Certain contracts will be required to be subject to Ukrainian law before the Ukrainian courts, which will pose certain legal and enforcement risks. Parties to international contracts will likely favour English law and to some extent New York law when negotiating choice of law and jurisdiction agreements, with international arbitration being the preferred method of dispute resolution, not least because Ukraine is a signatory to the New York Convention on the recognition and enforcement of foreign arbitral awards.


Transparency and compliance with obligations derived from the U.S. Foreign Corrupt Practices Act and UK Bribery Act will play a key role and close monitoring will be required to ensure that funds are not misappropriated.
In light of the severe consequences of lack of transparency, including potential investigations into bribery, corruption, and compliance failures, stakeholders will need to anticipate scrutiny of contracts and integrate robust compliance measures to mitigate risks.

Insurance and sanctions challenges

War-risk insurance in Ukraine is a critical consideration for businesses looking to operate in the region. The UK government at the URC proposed a framework for war-risk insurance with a view to enabling private enterprise to aid in Ukraine’s reconstruction, and on 31 October 2023 signed a Statement of Intent on an EBRD war-risk insurance scheme for Ukraine. Other signatories to the Statement include the European Commission, Norway, Switzerland and Taiwan.

Marking a significant milestone, the World Bank’s Multilateral Investment Guarantee Agency (MIGA) recently granted the first investment guarantees for private investors in Ukraine, approving a ten-year insurance package, including war-risks cover, worth $9.1 million for an industrial park project.

Engaging in reconstruction projects and financing may trigger compliance risks under complex US, EU and UK sanctions regimes as well as Ukrainian national sanctions laws. Businesses will also need to be mindful of export controls on goods, software and technology, in particular concerning nuclear and tech sector projects.

Litigation risks

There are numerous potential high-value claims by Ukrainian and foreign entities for assets destroyed, damaged or expropriated in the invasion, or impacted by sanctions. For claims against the Russian state/entities, enforcement will be the main risk.

The evolving situation regarding frozen or seized assets of the Russian state/entities adds an additional layer of uncertainty, especially in terms of how these assets will be distributed.

While Ukraine holds immense potential for investment and growth, navigating through political uncertainties and economic challenges requires a strategic approach. The reconstruction effort will take years, if not decades, but the path to rebuilding Ukraine presents both opportunities and challenges for foreign businesses.

About the Authors

Deborah RuffDeborah Ruff is the Head of International Arbitration at Pillsbury. She has extensive experience in multi-jurisdiction disputes, with a focus on high-value and complex international arbitration in the energy, infrastructure and construction, telecommunications and financial sectors.

Julia BelcherJulia Belcher is a dispute resolution Special Counsel focusing on international arbitration, with substantial experience in complex international disputes.

Danysheko DianaDiana Danyshenko is a paralegal at Pillsbury and a member of the Ukrainian Bar Association and AJIA (International Association of Young Lawyers).




The views expressed in this article are those of the authors and do not necessarily reflect the views or policies of The World Financial Review.