These are the findings of the annual Infrastructure Index 2024, conducted by the European Business Association in collaboration with law firms Arzinger and Sayenko Kharenko.
Investments and Recovery
In 2024, 59% of companies reported making such investments. The majority focused on modernising existing facilities (59%), developing new infrastructure and facilities (44%), and acquiring ready-made assets (16%).
Most businesses invested to improve logistics and expand their geographical reach within and outside Ukraine.
In 2024, 79% of companies relied on their own funds, while 30% used debt financing. Only 9% accessed grant funding for investments. Foreign investments accounted for 39% of funds, while Ukrainian sources made up 61%.
Key barriers to funding included a focus on maintaining existing infrastructure and the risk of asset loss due to the security situation. Other constraints were a lack of external funding and insufficient internal resources.
War-related Losses
In 2024, 53% of businesses reported direct damages from hostilities, with nearly half describing these losses as significant. Nevertheless, 41% have already restored the damaged assets, while others plan to do so soon (25%) or after the war ends (28%). Only 6% said recovery is impossible or impractical.
Plans to claim compensation for war-related damages have increased, with 45% of respondents intending to do so in 2024, up 25% compared to 2023. Companies are at various stages of the process:
- Documenting damage and gathering evidence (41%)
- Damage assessment (38%)
- Seeking consultants (23%)
- Initiating criminal proceedings (21%)
- Filing claims for compensation (10%)
Key Challenges for the Industry
The most pressing issue for 2024 is a labour shortage, reported by 69% of respondents. Rising logistics costs negatively impacted 65% of businesses. Other challenges include limited activity at seaports, shipping hazards, reduced demand, lower export and import levels due to decreased production, and power shortages.
Roads and Passenger Transport
82% of respondents support the introduction of toll roads, provided the quality of the existing infrastructure is improved beforehand.
Top three unresolved issues in passenger transport:
- Low quality and accessibility of public transport (57%)
- Unlicensed operators in intercity passenger transport (51%)
- Insufficient integration of transport modes for multimodal transportation (49%)
Government Priorities to Stabilise the Market
According to businesses, the government should focus on unblocking maritime transport and reopening ports, ensuring accessible risk insurance for investors, developing public-private partnerships, adopting the Railway Transport Act, and providing targeted support to restore damaged terminals and infrastructure.
75% of respondents support separating the Ministry of Communities and Territories Development to establish a dedicated transport authority.
Maryna Sharapa. Arzinger Partner
It is encouraging to highlight the results of the index, which demonstrate that despite significant losses, a labour shortage, and other challenges, the majority of businesses maintain a positive trend towards growth. An impressive 67% of companies are planning investments! Amid the war, this can be seen as another front the transport sector holds. In this context, the discussion at the infrastructure event about updates to the rules and procedures for investment mechanisms such as industrial parks, major investments, and public-private partnerships proved particularly timely.
Tymur Enkhbaiar. Counsel at Sayenko Kharenko
After some improvement in the situation last year, this year we are once again witnessing an increase in damages caused by military actions and the extent of harm incurred. Despite this, 59% of companies in the transport sector have invested in business development this year, and 67% plan to invest in 2025. Unsurprisingly, companies predominantly rely on their own funds and focus on improving logistics, expanding geographical presence, achieving energy independence, and enhancing security.
Source: https://eba.com.ua/en/67-transportnyh-kompanij-investuvatymut-u-rozvytok-biznesu-u-2025/