Investing in Ukraine’s economic resilience and future remains EBRD’s priority. So far this year we have invested €2.2 billion in Ukraine’s real economy, surpassing our goal of investing between €1.5 and €2 billion annually. We are also laying the foundation for the country’s reconstruction, supporting crucial policy reform to achieve impact beyond pure investments.
This month, our Ukrainian partner banks told us about the challenges they face and the opportunities ahead at our third Annual Roundtable on Banking Sector Resilience in Wartime Ukraine. Scroll down to read five things to note about the state of the banking sector in the country. We also released our latest economic forecasts for Ukraine. Amidst the continuation of the war and its impact on investment and trade, we cut our outlook, forecasting growth at 2.5% this year.
Our Managing Director for Ukraine and Moldova, Arvid Tuerkner, has just returned from his trip to Ukraine. What made this one particularly special, was his visit to the Chornobyl Power Plant. He shares his thoughts below.
Thank you for reading our new edition of EBRD in Ukraine Monthly. Scroll down for a recap of the latest news on the EBRD’s activities in the country.
Ukraine’s Wartime Banks Look Ahead
Resilience is the keyword, but challenges remain when it comes to Ukraine’s financial sector.
Liquidity remains strong with banks holding buffers several times above regulatory requirements, with no systemic stress despite the ongoing war.
Lending is cautiously recovering, boosted by risk-sharing facilities from IFIs and the government: MSME lending is expected to rise by over 30% in the next 12 months, while corporate and residential by ~25%. Risk appetite is still restrained, but improving.
Non-performing loans (NPLs) are falling. After spiking in 2022, NPLs have gradually declined to ~27% of portfolios. Most NPLs, however, represent legacy exposures.
Profitability is robust. Most banks remain solidly profitable. In 1H 2025, our partner banks delivered ~33% Return on Equity (ROE) on average, with state-owned banks achieving ~45%.
Optimism is on the rise. Sentiment is notably stronger than a year ago, confirmed by both our partners’ feedback and the NBU’s latest surveys.
At the same time labour shortages, operational risks, and an unpredictable tax policy remain the top challenges raised by our partner banks
From the field: Arvid Tuerkner in Chornobyl
EBRD delegation inside Chornobyl Nuclear Power Plant
Managing Director for Ukraine and Moldova, Arvid Tuerkner, shares his thoughts on his most recent visit to Ukraine, where apart from meeting clients and partners, he also got to visit the Chornobyl Nuclear Power Station.
Why was this trip to Chornobyl special?
This was the first time I got to visit Chornobyl and see firsthand the colossal New Safe Confinement that the EBRD financed as part of a decades’ long international effort to seal off the damaged nuclear plant. It is a true feat of modern engineering: a giant arc made of more than 80 elements and weighing 36,000 ton, which has transformed the site of one of world’s worst ecological catastrophes into an environmentally safe and secure area. The NSC or “shield” as some call it, has been one of the EBRD’s landmark projects. I also got to inspect the damage done to it following Russia’s drone attack on the plant this February.
What was the damage and why is this important?
The giant structure seals out wind, snow, and rain and has been confining radioactivity inside since its completion in 2019. But Russia’s drone strike has damaged the structure. Not only has it caused a 15-metre hole in the shield, but it also ignited a fire inside the sandwich structure of the NSC. In order to extinguish it, 340 holes had to be drilled into the cladding all over the surface. This has caused water to leak inside the plant and risks the possible release of contaminated dust. That’s why it is vital to restore the NSC’s functionality, so the facility continues to perform its originally envisaged function – preventing the toxic radioactive dust from spreading out and enabling the safe dismantling of Soviet-era Sarcophagus covering the 4th reactor underneath it.
What is the EBRD doing to remediate this?
Since the February attack, our Nuclear Safety team has been working on carrying out emergency repairs to the NSC. Our teams were on the ground in Chornobyl days following the attack, to assess the situation. But while repairs are ongoing, much more will need to be done to avoid further deterioration and restore the NSC to adequate safety levels. This is something we continue to work with our Ukrainian counterparts on, and hope this work can be supported by all of Ukraine’s partners.
Earlier this month, the Governing Board (the Board) of the United States-Ukraine Reconstruction Investment Fund (the Fund) held its inaugural meeting, adopting its operating rules. The Fund was officially established in May 2025 by means of an agreement between the United States and Ukraine (the Agreement) in order to foster economic cooperation and support investments for the development of Ukraine’s natural resources and related infrastructure.
This blog post outlines the objectives and key terms of the Agreement, highlights potential legal rights for investors and suggests risk mitigation strategies.
The scope of the Agreement and its key terms
The Fund will support investments in natural resource mining and related infrastructure in Ukraine from investors based in the United States, the European Union and other States backing Ukraine’s defence against Russia’s invasion. “Natural resources” covered by the Agreement include sites, reserves and deposits of a vast list of mineral assets (such as, for example, copper, lithium or nickel) in Ukraine’s territory, as well as oil, natural gas (including liquified natural gas), and other hydrocarbons.
The Fund is established as a limited partnership, jointly owned and managed by the United States and Ukraine through the respective States’ agencies (the US-Ukraine Partnership). The US-Ukraine Partnership will enjoy exclusive and preferential rights with respect to investment projects in Ukraine, in particular:
Investment Opportunity Rights. Licences and special permits for subsoil use of the relevant natural resources issued by Ukrainian authorities will include a provision requiring licensees and permit holders seeking to raise capital to disclose certain investment information to the US-Ukraine Partnership. The same will apply to public-private partnership contracts, concessions, and other agreements to construct or operate significant infrastructure assets that are up for approval by Ukrainian authorities. Should the US-Ukraine Partnership express interest in participating in such projects, investors must engage in good faith negotiations with the Partnership and may not grant third parties more favourable financial terms.
Market-Based Offtake Rights. Licences and special permits will include a provision allowing the United States (or its designees and assignees) to negotiate offtake rights on market-based commercial terms during the licence or permit term. Investors will have to refrain from offering more favourable financial terms to third parties for the offtake of such products.
With regard to the contributions to the Fund, Ukraine will transfer 50% of the State budget’s revenue (royalties, licence fees, amounts payable under production sharing agreements etc.) from the issuance of new licences or special permits for the exploration, mining or other use of the relevant natural resources in Ukraine, as well as from the exploitation of any unexploited (“dormant”) licences and permits. A permit is considered “dormant” if no work has been carried out in the past ten years (or, if less than 1% has been extracted to date). As of May 2025, there were more than 150 “dormant” subsoil use permits in Ukraine.
For its part, the United States will contribute by way of the new military assistance (in any form) provided to Ukraine and, possibly, further funds. It is expected that for the first ten years, investment returns will not be shared between the United States and Ukraine but will be re-invested in new projects on the terms set out in the limited partnership agreement (the LP Agreement), which is not yet public.
Incentives for investors
While it is estimated that about 5% of the world’s critical minerals are in Ukraine, most of these remain undeveloped. The situation is further complicated by a lack of reliable, up-to-date geological data. This historic partnership aims to speed up development in the sector, opening up investment opportunities in Ukraine’s rich natural resources to foreign investors. Against this background, the Agreement offers preferential rights to the US-Ukraine Partnership, which include:
Tax guarantees. The Fund’s income, the payments under the LP Agreement, as well as distributions and other payments from the Fund will not be subject to taxes, levies or other charges in Ukraine.
Free transfer and conversion of funds.Subject to certain exceptions related to Ukraine’s macro-financial stability,Ukraine will ensure free convertibility and transferability of funds to the Partnership’s accounts.This should enableexecution of payments under the Agreement “without cost, condition, or delay”.
No less favourable treatment.Notwithstanding any new legislation adopted in the future, Ukraine will continue to accord to the US-Ukraine Partnership treatment no less favourable than that required by the Agreement. Further, Ukraine may not invoke the provisions of its domestic laws to justify any failure to perform its obligations under the Agreement.
It is understood that although these rights are granted to the US-Ukraine Partnership, they are meant to safeguard and foster the underlying investment projects. Any non-compliance or modification of the rights granted under the Agreement to the Partnership may in fact also impact the relevant investments, making them commercially less attractive and ultimately affecting their value. In order to ensure that legal risks are – to the extent possible – mitigated, it is paramount for foreign investors to consider available legal protections, and structure their investments accordingly.
Key contractual risks and mitigation strategies
In return for its investment, the US-Ukraine Partnership will have economic and governance rights in future projects. While at this stage it is unclear to what extent investors will be able to negotiate the relevant contractual terms with the Partnership, it may be beneficial to consider the following aspects:
Degree of control.The degree of the US-Ukraine Partnership’s involvement in the projects must be clearly defined. Investors should aim to retain – to the extent possible – control over key decisions related to the investment, as well as any changes to the business or potential exit strategies.
Decision-making. The Fund is organised as a limited partnership on a 50:50 basis, which means that neither the United States nor Ukraine will have a preferential vote. All important decisions would have to be made by consensus of a six-member Board (with three members from the United States and three from Ukraine). This means that both sovereigns – through their delegates – will have to align on major decisions to avoid deadlocks, which may prove difficult given the geopolitical issues involved. The interests of the US-Ukraine Partnership will have to be balanced with those of the investors. One would therefore need to ensure that the underlying contracts provide for a fair and effective decision-making process. This should include clear mechanisms available in case of tied votes and disagreements between the stakeholders.
Dispute resolution.Ideally, investors should seek to include a dispute resolution clause to ensure the effective resolution of any claims. One way to achieve this may be to include an arbitration clause in the underlying investment contract,ensuring a neutral venue and a neutral applicable law (as opposed to litigation in Ukrainian or US courts). It is reported that the LP Agreement (not yet publicly available) provides for Delaware law to apply to the limited partnership matters and New York law to corporate matters with disputes to be solved by a three-member ad hoc tribunal seated in London.
Available investment treaty protection
Moreover, investment risks are inherent in any long-term project requiring significant upfront commitment of capital. The investment projects the Agreement aims to foster are no exception. In an ever-changing geopolitical environment, this inevitably carries risks of uncertainty, particularly in highly volatile markets such as Ukraine.
International investment treaties provide a number of legal protections to foreign investors, including the possibility to seek compensation for damages caused to their investments via international arbitration. Foreign investors could bring claims directly against Ukraine under one of its 65 bilateral investment treaties (BITs) in force, including those with the United States and with many EU Member States. Investors need to ensure that their investments are covered and protected by the relevant BITs.
In the long term, one area where we envisage possible policy shifts or legislative changes is Ukraine’s accession to the European Union (the EU). There were several significant steps forward in this regard:
Ukraine has already made extensive commitments under the EU-Ukraine Association Agreement signed in 2014, which identifies the areas where Ukraine needs to harmonise its domestic legislation with EU law. For example, Ukraine must ensure the enforcement of competition law, which should gradually be aligned with EU law.
In recognition of its progress in implementing the Association Agreement, on 23 June 2022, Ukraine was granted candidate status for accession to the European Union. This paves the way for the accession negotiations, during which the EU and Ukraine will identify further areas where harmonisation is needed calling for further legislative changes.
The incentives to be granted under the Agreement raise concerns as to their potential non-compliance with EU law, particularly EU competition law. For instance, any financial assistance provided by the Fund to projects might qualify as unlawful State aid giving an investor an unfair advantage over its competitors. In such case, if Ukraine is to harmonise its competition laws with EU law, certain incentives under the Agreement may need to be reviewed and even revoked as incompatible with EU law. This could in turn impact the rights of investors who may want to seek redress for the damages caused to their investments by such changes.
In this context, EU investors seeking to benefit from the Fund’s support may be advised to consider structuring their investments through their non-European subsidiaries. This would ensure that EU law does not constitute an obstacle to the enforcement of investors’ rights under applicable investment treaties.
Outlook
The Agreement is an important step in strengthening economic relations between Ukraine and the United States and has the potential to attract foreign investment to support Ukraine’s recovery and reconstruction. The Agreement envisages cooperation for decades to come, with many steps to be taken by investors with the support of the US-Ukraine Partnership before exploration and mining can begin. Once the Agreement has been fully implemented, it will be important to see how it aligns with any potential peace framework agreement. Other States supporting Ukraine’s reconstruction and defence efforts may also be willing to benefit from co-investing in Ukraine’s natural resources, which could lead to changes and rearrangements to the initial plan.
On 1 September 2025, the State Property Fund of Ukraine has announced the date of the electronic auction for the sale of a state-owned 99.5667% stake in JSC “Odessa Port Plant”. The electronic auction for the sale thereof will be held on 25 November 2025.
About JSC “Odessa Port Plant”
JSC “Odessa Port Plant” (“OPP”) is a state-owned joint-stock company active in chemical industry, a major producer of ammonia and carbamide and a major provider of overloading services for the export of ammonia, carbamide, methanol, and other bulk and liquid goods (e.g., grain, ore).
OPP’s production facilities include:
► 50,000 to 60,000 metric tons Vessel capacity range accommodated by Panamax-class ships at OPP’s dry and liquid bulk berths, supported by comprehensive port infrastructure.
► 2 ammonia production units Each with an annual capacity of 550,000 tons.
► 2 urea production units Each with an annual capacity of 430,000 tons.
► 4 million tons (annual capacity) Ammonia transshipment complex, with a storage facility of up to 120,000 tons.
► 3.6 million tons (annual capacity) Urea overloading complex, with a storage warehouse for 80,000 tons.
► 1 million tons (annual capacity) Methanol transshipment complex, with a storage facility for 36,000 tons.
► 16,000 tons (annual capacity) Department of liquid carbon dioxide production.
► 1,436 employees As of 30 June 2025, this is the total number of staff employed by OPP. For key financial indicators consult the privatization teaser published by the State Property Fund of Ukraine here.
Key terms of the auction
• UAH 4,488,523,000.00 (~USD 109 million) Starting price for the auction.
• UAH 224,426,150.00 (~USD 5.5 million) Guarantee deposit amount, or an equivalent bank guarantee that is irrevocable and compliant with statutory requirements. This deposit is non-refundable if the auction winner fails to execute the protocol, sign the share purchase agreement, or pay the purchase price on time.
• UAH 80,000 (~USD 1,940) Registration fee for participating in the auction.
• English auction with conditions Auction format: incremental bidding with investment and other covenants imposed in the share purchase agreement.
• 19:30–20:30 p.m. on 24 November 2025 Submission window for applications (the day before the auction). If submitting a bank guarantee, the original must be submitted before 18:00 on the same day.
• 2 bidders (minimum) Required for the auction to proceed.
Next steps
Investors interested in participating in the auction would need to, among others:
Select and register with the trusted electronic platform for the participation in the electronic auction (list thereof can be found here).
Sign NDA with the operator of the electronic platform to access the OPP dedicated data-room (free of charge) and draft shares purchase agreement for legal and financial due diligence review.
Conduct legal and other due diligence reviews, submit additional inquiries for information to the operator of the electronic platform (to be processed by the operator together with the State Property Fund of Ukraine), and decide on whether to participate in the auction.
Pay registration fee and guarantee deposit (or provide bank guarantee) to the bank account of the operator of the electronic platform to obtain the status of participant of the auction and apply electronically for the participation in the auction.
Participate in the auction.
Content is provided for educational and informational purposes only and is not intended and should not be construed as legal advice. This may qualify as “Attorney Advertising” requiring notice in some jurisdictions. Prior results do not guarantee similar outcomes. For more information, please visit: www.bakermckenzie.com/en/client-resource-disclaimer.
September 2025 – Despite the ongoing war and significant challenges, the Ukrainian legal framework continues to encourage an open and flexible investment environment.
Specifically, it expressly recognizes a wide variety of investment forms and ways to repatriate investments.
Below we summarize the current status of capital control rules as they apply to the key types of investment instruments.
On 21 August 2025, the Parliament of Ukraine adopted a package of draft laws introducing a special legal regime for defence industry enterprises, known as Defence City.
In order to benefit from the tax and customs incentives under this regime, a defence industry enterprise must first obtain Defence City resident status.
These legislative changes are part of a broader governmental strategy to develop Ukraine’s defence-industrial complex, aimed at accelerating the creation and implementation of advanced military technologies, ensuring inflows of private and foreign investment, and strengthening national defence capabilities by systematically equipping the Armed Forces of Ukraine and other security and law enforcement agencies with modern weapons.
Legislative Framework
The Defence City regime has been established through the adoption of two fundamental laws:
Draft Law No.13420 of June 25, 2025, “On Amendments to the Tax Code of Ukraine and Other Laws of Ukraine Regarding Support for Defence Industry Enterprises”
Draft Law No.13421 of June 25, 2025, “On Amendments to Section XXI ‘Final and Transitional Provisions’ of the Customs Code of Ukraine Regarding Support for Defence Industry Enterprises”
The detailed procedures for the operation of Defence City residents are expected to be further regulated in a new section to be added to the Law of Ukraine “On National Security of Ukraine.”
Key Provisions
1) Establishment of Defence City and Resident Status
The new regime defines the category of Defence City resident and sets out the procedure for obtaining such status, the requirements to be met by residents, and the grounds for refusal or revocation.
To acquire Defence City resident status, a legal entity must submit an application to the Ministry of Defence of Ukraine. The application procedure will be determined by a forthcoming resolution of the Cabinet of Ministers of Ukraine. Status is granted only if the applicant meets the statutory requirements, including:
Income criteria for the preceding calendar year:
at least 75% of total income (general rule)
at least 50% for aircraft manufacturers, as provided by the Law of Ukraine “On the Development of the Aircraft Industry.”
“Qualified income” includes income from the sale of domestically produced defence goods, performance of defence-related works, or provision of defence-related services (development, manufacturing, repair, modernization, disposal)
“Defence goods” encompass weapons, military and special equipment (including unmanned systems, electronic warfare and reconnaissance equipment, and counterintelligence countermeasures), and ammunition
Absence of disqualifying circumstances, including:
registration under the laws of a foreign state
failure to pay income tax or existence of significant tax debt/arrears of social security contributions (exceeding 10 minimum wages)
inclusion in the Register of Non-Profit Institutions and Organizations
violation of legal requirements regarding disclosure of information about ultimate beneficial owners and/or submission of information about the ownership structure of a legal entity, and failure to remedy this violation
association with aggressor states, sanctioned persons, or non-compliant offshore jurisdictions
pending bankruptcy or liquidation
material violations of state defence contracts within the preceding 12 months
registration or operation in temporarily occupied territories
Residents must comply with these requirements throughout their residency. Breaches may lead to revocation of resident status by the Ministry of Defence.
Applications must be reviewed within 10 business days, with decisions rendered to grant or deny status. The form, submission process, and calculation methodology for qualified income will be established by the Cabinet of Ministers.
2) Tax Incentives
Residents of Defence City may apply for a special tax regime under which they are exempt from corporate income tax until 1 January 2036, or until the date of Ukraine’s accession to the European Union (whichever comes first).
Such an application may be submitted only once during the period of validity of this status. An application for exemption from income tax must be submitted by the taxpayer in any form to the controlling authority at the place of registration through the taxpayer’s electronic cabinet.
Exemption applies only if the resident:
maintains Defence City resident status
is not simultaneously a Diia City resident
does not pay dividends (except to state-owned enterprises)
has no violations in transfer pricing or controlled foreign company reporting (Articles 39 and 392 of the Tax Code of Ukraine)
Exempted profits must be reinvested in defence-related activities, such as:
creation or modernisation of production facilities and fixed assets
improvement of production processes and adoption of new technologies
acquisition of intellectual property rights under state defence contracts
R&D and manufacture of new weapons or equipment
acquisition of corporate rights in defence-industrial enterprises
Voluntary waiver of the exemption is permitted only after the year following the first year of its application.
In the event of termination or loss of Defence City resident status, the taxpayer shall determine its corporate income tax liabilities in the ordinary manner for the reporting period in which the relevant application was submitted or the violation occurred. If, as of the date of submission of the application, there remains any portion of unused exempted profit, such portion shall also be subject to calculation and payment of income tax.
Upon the loss of resident status or violation of the applicable requirements, a Defence City resident immediately forfeits the right to the exemption, effective from the first day of the month of the reporting period in which the violation or non-compliance took place. In such cases, the resident is required to submit a revised tax return, calculate the corresponding tax liabilities, and pay both the tax and applicable penalties within 30 calendar days (or no later than the day following the violation). The tax and penalties shall be calculated from the beginning of the reporting period in which the violation or non-compliance occurred. Importantly, the limitation periods set forth in Article 102 of the Tax Code of Ukraine shall not apply in this situation.
Furthermore, residents of Defence City (excluding taxpayers who also simultaneously hold Diia City resident status) are exempt from paying land tax, environmental tax, and real estate tax. This exemption does not require the submission of a separate application, as it applies automatically from the moment of acquiring Defence City resident status.
3) Confidentiality of Information
During martial law, the financial reporting data of Defence City residents shall not be publicly disclosed.
The Cabinet of Ministers must adopt procedures within one month to restrict public access to information in electronic registers concerning Defence City residents.
Amendments to the Law “On Public Electronic Registers” provide that, for the duration of martial law and one year thereafter, general access to such information is restricted. Registers affected include:
Unified State Register of Legal Entities, Individual Entrepreneurs, and Public Organisations
State Register of Rights to Immovable Property
State Land Cadastre
Unified State Register of Enterprises and Organizations of Ukraine
State Register of Industrial Designs
State Register of Trademarks
and other registers specified by the Cabinet of Ministers
In addition, Defence City residents that are legally required to publish annual and consolidated financial statements, along with audit reports, management reports, consolidated management reports, reports on payments to the state, and consolidated reports on such payments, must ensure full publication of all such documents within three months after the termination or cancellation of martial law (state of war). This obligation applies to the entire period during which such reports were not published.
At the same time, if a Defence City resident loses or terminates its resident status earlier, the reports must be published no later than 30 days from the date of such loss or termination.
4) Simplified Export Controls
Defence City residents that develop or manufacture military goods may export such goods without Cabinet-level authorizations normally required under Article 13 of the Law of Ukraine “On State Control of International Transfers of Military Goods and Dual-Use Goods.”
5) Expanded Powers of the Ministry of Defence
The Ministry of Defence is authorised to obtain information from the State Tax Service and State Customs Service regarding compliance of residents. Regulators must also notify the Ministry of any misuse of tax-exempt profits or violations by Defence City residents.
6) Interaction with Diia City
Although current legislation does not expressly prohibit dual residency, simultaneous Defence City and Diia City status prevents the application of preferential tax benefits.
Personal Income Tax (PIT): Diia City’s preferential 5% PIT rate does not apply if the taxpayer also has Defence City status; instead, income is taxed at the general 18% rate.
Single Social Contribution (SSC): Diia City’s reduced SSC benefit (minimum contribution level for employees and gig-contractors) also does not apply in cases of dual residency.
7) Currency Regulation
Draft Law No. 13420 instructs the National Bank of Ukraine to establish, within two months, special rules for currency transactions and currency supervision applicable to Defence City residents. Thus, additional privileges in this area are expected.
8) Customs Procedures
Certain customs procedures are expected to be simplified, including exemptions from document submission requirements and streamlined conformity assessments.
The laws will enter into force one month after publication, provided they are signed by the President of Ukraine.
When “the special operations” began in February 2022, almost all the container lines had stopped their port calls to Odessa and Chornomorsk due to their safety concerns. Then they also suspended their services to and from Russian ports indefinitely, presenting it as a collective stance by the business community against the inhumane actions that cost thousands of lives in Ukraine.
Afterwards of their sugar-coated and publicly praised actions, almost all the major container lines resumed their services to Russian ports through their proxies by newly established shipping companies that nobody had heard of before. Small-to-medium-sized container lines filled the market with different names and shadowed ownership information. Brands did not even bother changing their corporate colours, logo types, and in some examples, emails. Very noble behaviour, indeed.
But my main interest is why those big ones that were waving flags of Ukraine, manifesting their sincere and positive approach to the Ukrainian economy in every interview, after each summit in the past, at the first occasion backed off, despite the reimplementation of nearly all safety regulations to Ukrainian ports? Why do shipping giants still keep delivering to Yemen and Israel? Are they not risk zones?
Major shipping lines continue regular services to ports in the Red Sea region, where Houthi attacks resulted in over 100 incidents affecting commercial vessels in 2023-2024, the Persian Gulf, and various African ports despite ongoing security challenges. Insurance premiums for Red Sea transits increased by 300-500%, yet services continued.
Major maritime insurers have begun offering coverage for Ukrainian port calls at rates only marginally higher than standard Black Sea premiums — a stark contrast to the 300-500% increases seen for Red Sea transits. War risk insurance for Ukrainian ports currently adds approximately $50,000-75,000 per voyage, compared to $200,000-300,000 for certain Middle Eastern routes where major carriers continue to operate over a hundred weekly container ship calls.
The International Maritime Organization and European Maritime Safety Agency have both issued updated guidance confirming that Ukrainian ports meet international safety standards for commercial operations. The European Union’s inclusion of Ukrainian ports in its TEN-T network expansion plans, backed by €7.4 billion in committed infrastructure investment through 2030, signals transformative institutional support for maritime development.
The answer lies not in genuine safety concerns but in the cold calculus of boardroom-level decision-making and profit margins. The major carriers fear potential backlash from shareholders, insurers, and global collaborators more than they value the substantial revenue opportunities that Ukrainian trade represents.
This strategic withdrawal reveals the shipping industry’s true priorities. Ukraine’s pre-2022 container throughput reached approximately 850,000 TEU annually across its major ports. But the Big Three (Maersk, MSC, and CMA CGM) prefer the perceived safety of established trade routes. They’ve effectively abandoned one of Europe’s most strategically important maritime corridors, leaving Ukrainian exporters dependent on costly overland alternatives through Poland, Romania, and the Danube River system, which cost 40-60% more per ton than direct maritime shipping.
Ukrainian port authorities have invested heavily in security infrastructure, implementing NATO-standard safety protocols and maintaining 24/7 coordination with international maritime security agencies. The ports of Chornomorsk and Odesa have demonstrated their operational readiness through successful grain corridor operations, having facilitated over 33 million tons of agricultural exports since the Black Sea Grain Initiative’s implementation. Current port capacity utilization stands at merely 15-20% of pre-2022 levels, despite maintaining 85% of operational infrastructure.
The technical infrastructure remains largely intact, with modern container handling equipment and deep-water berths capable of accommodating vessels up to 200,000 DWT. Ukrainian port workers, renowned for their efficiency and expertise, achieved the impressive pre-war pace of 25-30 container moves per hour, competitive with major European ports. The missing element is not capacity or capability — it’s the willingness to stand up and lead.
This strategic abandonment carries implications far beyond immediate profit calculations. Ukraine’s pre-war trade volume reached $84 billion annually, with maritime transport accounting for approximately 60% of this figure. Ukraine’s integration into European supply chains depends heavily on reliable maritime connections. By maintaining their absence, major carriers effectively impede Ukraine’s economic recovery and its deeper integration into global trade networks.
The transportation industry has historically prided itself on connecting global markets regardless of political challenges. Major shipping lines built their reputations by maintaining services to destinations others deemed too risky. Their current approach to Ukrainian ports represents a departure from this tradition and raises questions about their commitment to free global trade.
While major global carriers hesitate, regional players and smaller lines are quietly positioning themselves to capture Ukraine’s extraordinary maritime potential. Middle Eastern carriers, including those from the UAE and Qatar, have shown increasing interest in Ukrainian routes, with preliminary agreements for 15-20 weekly services once full operations resume. Even some Chinese state-owned enterprises are exploring opportunities through third-party arrangements, understanding that Ukraine’s reconstruction will create decades of unprecedented shipping demand.
This shifting dynamic presents a critical paradox for the Big Three: their conservative approach may preserve short-term stability, but it simultaneously creates space for competitors to establish footholds in what industry analysts project will become a $4-5 billion annual maritime market by 2030. Ukraine’s strategic position connecting European, Asian, and Middle Eastern trade corridors positions its ports to handle an estimated 2.5-3 million TEU annually within the next decade, nearly triple pre-war volumes.
History shows that post-conflict reconstruction phases often reshape entire industries, and shipping is no exception. Companies that enter early typically secure long-term exclusive partnerships, preferential rates, and strategic port allocations that become nearly impossible for latecomers to match.
The time for excuses and proxy arrangements has passed. If major container lines genuinely support Ukrainian recovery, they must demonstrate this commitment through direct action, not public statements. Until then, their Ukrainian port absence remains an indictment of an industry that has chosen comfort over courage when courage was needed most.
For carriers seeking to position themselves in Ukraine’s spectacular post-war economic transformation, the message is crystal clear: you must step forward now, not tomorrow. Ukraine’s maritime sector is poised for unprecedented growth, with government projections indicating port throughput will reach 4.2 million TEU by 2035, five times pre-war levels. The country’s planned deep-water port expansion at Yuzhny alone will add capacity for 1.8 million TEU annually, while Odesa’s planned terminal automation will increase efficiency by 40-50%. Early movers will secure preferential partnerships, prime berth allocations, and lasting business deals that will define the next two decades of Ukrainian trade.
Ukraine’s recovery represents one of Europe’s most magnificent post-conflict reconstruction opportunities, with maritime infrastructure investments alone expected to generate 15,000 direct jobs and contribute €2.1 billion annually to the regional economy by 2032. The country’s strategic position will make it the gateway for an estimated €85 billion in annual trade flows between Europe and Asia within the next decade.
The maritime industry’s leaders must decide whether they want to be architects of this historic revival or mere observers watching others claim the extraordinary rewards of courage and foresight in what will become the Black Sea’s most advanced and profitable port network.
Transport infrastructure was the main topic at the 2025 Ukraine Recovery Conference (URC) hosted by Italy. Nevertheless, this topic was not overlooked. What could the aviation, port, railway, and road sectors stand to gain as a result of the conference?
The Ukrainian Railways joint-stock company (Ukrzaliznytsia) will receive grants totaling EUR 54 million. Poland will invest in roads and railways, as well as in the development of Ukrainian-Polish border crossings. The Ukrainian Sea Ports Authority (USPA) and the Ukrainian Reconstruction Consortium signed a memorandum that provides for the development of Ukrainian ports… Although the transport sector was not the main focus of URC 2025, these announcements were all made during the two-day event.
This year’s conference took place in Rome from 10 to 11 July. It was the latest in a series of international conferences dedicated to Ukraine’s reconstruction, following those in Lugano (2022), London (2023), and Berlin (2024). More than 4,000 people attended this year’s conference, including heads of state and government from over 100 countries, as well as representatives of international organizations.
An important announcement on the creation of the European Flagship Fund for the Reconstruction of Ukraine was made by European Commission President Ursula von der Leyen. According to von der Leyen, the fund’s initial partners include France, Germany, Italy, Poland, and the European Investment Bank. The fund is expected to channel investments into Ukraine’s critical recovery sectors.
The participants in the event discussed the development of the defense sector, Ukrainian technologies and dual-use innovation for global security, the restoration of Ukraine’s energy infrastructure, investing in energy resilience, etc. A workshop on “Bridging Europe: Ukraine’s Path to Transport Integration” was also held. Panel discussions during the third session focused on modern infrastructure as a path to recovery.
The Center for Transport Strategies (CFTS) has identified several transport-related decisions and statements made at the Rome conference.
The USPA and the Ukrainian Consortium for Reconstruction signed a partnership memorandum for the restoration and development of Ukraine’s port industry.
The primary benefits of the memorandum include the potential involvement of leading Italian and European companies in the reconstruction of ports, the development of “smart” port systems with automated cargo handling, the integration of Ukrainian ports into the Trans-European Transport Network (TEN-T), support in securing access to financing from the European Investment Bank (EIB), the European Bank for Reconstruction and Development (EBRD), the World Bank, and various European funds, the development of partnerships with European ports, and the implementation of environmentally sustainable technologies.
The memorandum provides for cooperation in the following areas: adoption of international standards and advanced technologies; implementation of joint infrastructure projects; establishment of partnerships between Ukrainian and Italian ports; financial and technical partnerships; development of innovative, environmentally friendly transportation solutions; promotion of sustainable recovery of the port industry; consultations on improving and harmonizing Ukraine’s maritime legislation with EU, IMO, and UNCTAD standards; and sharing of experience.
The USPA signed cooperation memoranda with Italian port authorities.
During the second day of the conference in Rome, the Ukrainian Sea Ports Authority (USPA) announced that it had signed memoranda of cooperation with the Eastern Adriatic Sea Port Authority and the Western Ligurian Sea Port Authority.
The former manages the ports of Trieste and Monfalcone. The Port of Trieste is one of the largest cargo ports in Italy and a key element of the TEN-T. It is actively implementing digital solutions and has deep-water infrastructure.
The Western Ligurian Sea Port Authority unites the ports of Genoa, Savona, Pra’, and Vado Ligure.
The memoranda provide for the development of long-term partnerships, the sharing of best practices, support for the digital transformation of Ukrainian ports, and the strengthening of Ukrainian ports’ integration into the European logistics network.
“These memorandums open up new opportunities for digitization and the implementation of modern logistics solutions, as well as the adaptation of ports to new challenges. This is another step towards integration into the European logistics space — through concrete cooperation, training, and investment,” said Oleksandr Semirha, head of the USPA.
The Ukrainian State Air Traffic Services Enterprise (UkSATSE) signed a memorandum of cooperation with two Italian technology partners: the aerospace equipment manufacturer Leonardo S.p.A. and the air navigation service provider ENAV S.p.A.
This document is an important step in the joint effort to restore and modernize Ukraine’s air traffic control system as part of the Ukraine Air Traffic Management Restoration and Recovery Plan (UARRP).
According to Andrii Yarmak, the head of UkSATSE, two additional agreements were signed alongside the memorandum. These agreements provide for the donation of five en-route primary radar systems and associated equipment to UkSATSE. The systems are expected to play a significant role in restoring Ukraine’s surveillance capabilities and enabling a phased reopening of its airspace for civil operations.
Poland will invest in roads, railways, and the development of border crossings with Ukraine.
Viktor Dovhan, a former Ukrainian deputy minister of infrastructure, announced this on the sidelines of the conference. This was reflected in the signing of a memorandum of cooperation between Poland’s Industrial Development Agency (ARP) and Ukraine’s State Agency for Reconstruction and Development of Infrastructure. The document provides for joint efforts to identify and implement various projects, including infrastructure projects.
“The signing of this agreement represents an important step towards practical cooperation between Poland and Ukraine,” said Wojciech Balczun, president of the ARP. “Operating within the framework of the Polish Development Fund Group, the ARP has the experience and tools to support Polish entrepreneurs in participating in reconstruction projects. We want Polish companies to become genuine partners in rebuilding Ukraine’s infrastructure, industry, and energy sector. This is an opportunity for Ukraine’s recovery and for strengthening Poland’s economic position in the region.”
In comments to the CFTS, Dovhan, who currently advises the Polish construction giant Budimex, explained that these national agencies reached this agreement because the Poles want to speed up the implementation of reconstruction projects. To avoid the establishment of contacts between individual firms, they decided to establish a working group to submit ready-made projects to the governments of both countries within three months for financing approval.
Funding is expected to be provided through the Ukraine Facility mechanism, using loans from the Polish national development bank, BGK.
“The Poles are candid about their interest in making profits. That is why the emphasis is on practical implementation — they will not consider raw projects. The goal is to begin implementing one or two projects before the next recovery conference, which will take place in Warsaw next year. We definitely have time to hold a tender for one road and one railway project,” said Dovhan. He added that Polish companies are interested in highways in western Ukraine, the Mostyska-Sknyliv European-gauge railway, and border crossings between Poland and Ukraine.
The former deputy minister of infrastructure also noted that while Polish firms will understandably participate in BGK-funded tenders, Ukrainian subcontractors will most likely carry out at least 50% of the work because the Polish side is unlikely to be willing to send personnel and equipment to Ukraine due to security concerns. As a result, Dovhan believes that both sides will definitely benefit because Ukraine will gain new infrastructure and access to concessional financing.
Other statements related to the transport sector in one way or another were also made at the Rome conference. One such statement was the announcement of a new bilateral agreement on cooperation with Switzerland regarding reconstruction efforts. The Swiss government considers the reconstruction of Ukraine as a strategic priority and plans to allocate CHF 5 billion (EUR 4.8 billion) for it by 2036. The agreement provides for the provision of non-refundable financial and technical assistance to purchase goods and services from Swiss companies in various sectors, including transportation and mobility.
Ukraine and the Netherlands also signed a memorandum on the provision of additional financing (EUR 30 million) under the Ukraine Partnership Facility program. This memorandum is expected to enable Dutch companies to participate more actively in Ukraine’s reconstruction efforts in areas in which they have experience, such as water supply, healthcare, agriculture, and renewable energy. The memorandum also provides for the development of ports, among other things.
In total, the number of agreements signed during the 2025 Ukraine Recovery Conference in Rome is estimated to be in the hundreds. “Over 200 different agreements worth more than EUR 10 billion, a new European support package worth more than EUR 2 billion, a Finnish reconstruction-focused program worth more than EUR 300 million, a Dutch package worth EUR 30 million…” President Volodymyr Zelenskyi said, summing up the first day of the conference.
Now, all that remains is to hope that all these commitments will quickly materialize from memoranda into tangible projects on the ground.
On 19 June 2025, the Ukrainian Parliament adopted a new Law “On Public-Private Partnership” (the “PPP Law”), replacing the outdated 2010 legislation. The new Law aligns Ukraine’s PPP framework with international standards (including UNECE PIERS) and offers a simplified, more flexible and investororiented approach.
The PPP Law is currently awaiting the President’s signature and will enter into force three months after its official publication. Additional secondary legislation will be required to implement the new rules in full.
The We Build Ukraine think tank develops systemic solutions for the restoration and development of key sectors of the Ukrainian economy, including transport infrastructure and logistics.
In the short and medium term, our goal is to prepare an action plan and recommendations to strengthen cooperation with international partners, as well as to create conditions for attracting large-scale investments in the country’s recovery and modernization.
This policy brief outlines the key challenges and opportunities in the field of logistics and transport infrastructure, summarizes relevant analytical data, and draws on the results of a sectoral conference on logistics held by the We Build Ukraine team.
INTRODUCTION
The Economic Growth Strategy of Ukraine, developed jointly by the Boston Consulting Group and the We Build Ukraine think tank, identifies logistics as one of the four key drivers of growth, along with access to finance, labor, and telecom infrastructure. Logistics has become a critical pillar for the resilience of the Ukrainian economy since the start of the full-scale invasion in 2022: it has helped to maintain export channels, ensure defense capabilities, and support critical imports.
However, during the first decades of independence, the transportation system remained chronically underfunded. And the war led to large-scale destruction, further complicating the development of logistics and deepening structural challenges.
In this context, European integration is of key importance. The opening of EU accession negotiations in 2024 means that Ukraine needs to adapt its transport policy and logistics routes to EU standards on a large scale. In particular, Ukraine needs to implement the acquis communautaire directives in the transport sector, modernize its infrastructure in line with TEN-T requirements, and ensure long-term integration into the European transportation market. The development of connectivity through Solidarity Lanes is only the first step in this direction.
To effectively transform the infrastructure sector, Ukraine needs strategic program planning at both the central and local levels. Such programs should be integrated into the overall economic strategy and based on a clear system for evaluating, prioritizing, and monitoring investment projects.
As of March 2025, Ukraine has updated its National Transport Strategy until 2030, is preparing roadmaps as part of the negotiation process with the EU, and is developing strategic projects in the logistics sector under the Ukraine Facility Program. Some communities have already approved mobility plans, including the development and consideration of multimodal hub concepts, but there is currently no unified approach or guidelines for the local level.
Updating the legal framework should be an integral part of the reform. We are talking about:
the Law on Railway Transport;
a law on the specifics of privatization of port infrastructure facilities;
updating legislation on concessions and public-private partnerships;
reforms in the area of tariff setting (railroad, port, and airline fees);
strengthening the capacity of regulators.
High-quality preparation of investment projects is impossible without legal certainty and institutional capacity. It is necessary to ensure a link between the scale of an infrastructure project and the real economic prospects of the region. To do this, it is important to assess the match between infrastructure supply and projected demand for logistics services, production clusters, agricultural or industrial activity in the project’s area of influence.
According to the EBRD, it is impossible to evaluate a logistics center in isolation from the overall infrastructure. Each logistics facility must be considered in conjunction with the rail, road, sea and air transport network, as well as trade flows, access roads and the geo-economic perspective of the region.
Today, it is not just about physical restoration; the goal should be to create a new quality of logistics: digital, multimodal, EU-oriented, energy efficient, and open to private capital. This requires the simultaneous modernization of assets, updating the regulatory framework, adjusting tariff policy, and launching tools to attract large-scale private investment, including in the form of public-private partnerships.
RAILWAY TRANSPORTATION
Transformation of Ukrzaliznytsia and new regulation
The railway industry remains strategic for Ukraine, both in the defense sector and in the context of European integration and sustainable exports. As part of the Ukraine Facility program, Ukraine’s key commitment is to adopt the Law on Railway Transport in the third quarter of 2025. This law should become the basis for gradual liberalization of the market, opening access for private traction, establishing an independent regulator, and introducing fair and transparent rules for access to infrastructure. As of March 2025, the draft law was registered by the Government of Ukraine in the Verkhovna Rada of Ukraine.
The law sets out the framework for market liberalization, tariff regulation, transport safety guarantees, and conditions for investment in the industry, as well as the separation of passenger and freight transportation into separate legal entities, and the creation of an infrastructure company.
Tariff policy and efficiency
The current tariff model does not encourage the efficient use of rail transport. This is especially true for transportation to ports, where delivery costs are often uncompetitive. A step-by-step adjustment of the tariff policy is needed, which should be based on:
the real cost of transportation,
the needs of export-oriented industries,
competitiveness with alternative logistics routes.
Asset optimization
UZ needs a systemic transformation of its asset management model. It should focus on the development of key operating segments (infrastructure, traction, freight rolling stock, logistics hubs) and gradually withdraw non-core assets from the balance sheet. This will allow the company to focus financial and management resources on modernization and improving the quality of services.
1435 mm projects: interoperability with the EU
The development of 1435 mm railway infrastructure is a prerequisite for Ukraine’s integration into the European transportation market. Projects of this type help to reduce border crossing time, minimize transshipment costs and ensure the continuity of logistics chains.
Example: Mostyska II – Nyzhankovychi – State Border – Khyriv project. As part of this pilot project, preparations are already underway for the construction of infrastructure for a 1435 mm gauge, including the modernization of border sections. This will directly connect Ukraine with the TEN-T corridors of Poland, which will have a significant effect on agricultural exports, container transportation, and freight transit.
SEAPORTS
Challenges and reserves
Ukraine’s seaports remain the main channel for exports of agricultural, metallurgical, and other products, but their capacity has been significantly reduced due to the hostilities and security risks. RDNA4 estimates that direct losses of port infrastructure amount to about $0.6 billion. Due to the blockade of the Greater Odesa ports, part of the cargo flows were redirected to alternative routes, in particular to the ports of the Danube cluster.
The Danube ports of Izmail, Reni, and Ust-Dunaisk have become a critical reserve for exports, including grain, oil, containers, and steel products. In 2023, transshipment through the Danube exceeded 14 million tons, almost twice the pre-war volume. At the same time, the cluster’s capacity is almost exhausted, requiring intensive investment in expansion, dredging, logistics, and railway infrastructure.
Support for the Danube Cluster
In order to ensure the functioning of the Danube cluster ports in the event of partial or full opening of the Black Sea ports in the territories controlled by the Government of Ukraine, it is necessary to take urgent measures to stimulate the competitiveness of the Danube ports, which can always serve as a kind of plan B for access to the Black Sea, to maintain their financial and operational stability, it is proposed to introduce a program to support these ports, including:
optimization of the level of port dues by amending the regulatory documents of the body that forms the policy in this area, which will allow for the creation of incentive conditions for transshipment;
introducing separate tariff regulation for rail transportation for the directions serving the cluster’s ports.
Financial autonomy for ports
State-owned enterprises that manage port infrastructure should be given the financial flexibility to invest in rehabilitation. After years of underfunding and significant war damage, the Black Sea ports’ infrastructure is in critical condition: worn-out berths, insufficient capacity, need for dredging and upgrading of access logistics.
To return the ports to pre-war levels of operational efficiency, it is necessary to implement a set of capital projects, ranging from the reconstruction of hydraulic structures to the modernization of logistics approaches. Approximately, in the ports of Mykolaiv, Kherson, Odesa, and Chornomorsk, the total investment needs could reach $200 million.
In this context, it is advisable to provide a mechanism for releasing the internal resources of state-owned enterprises by exempting USPA and other water companies from the obligation to pay part of their net profit to the state budget for 5 years after the end of the war, or limiting this amount to 20%. Provided that the freed-up funds are used exclusively for capital investments in strategic facilities, this will create an effective model for the restoration and development of port infrastructure.
Institutional steps
To ensure long-term attraction of private investment, the legal framework needs to be updated.
The law on the peculiarities of privatization of port infrastructure facilities should regulate the procedures for transferring hydraulic structures, berths and terminals to private use on transparent and predictable terms.
The Cabinet of Ministers should approve a unified procedure for allocating water fund land for the reconstruction and construction of port and hydraulic structures. This will accelerate the implementation of projects in the Danube and Black Sea clusters, as well as increase the confidence of donors and private investors.
AVIATION
Role in the logistics system
Ukraine’s aviation sector is of strategic importance for both population mobility and high-value logistics. We are talking about critical cargo: medicines, electronics, spare parts for high-tech production, and defense products.
As of the end of 2024, some airports are completely destroyed, while others are mothballed or in need of major repairs. This requires careful assessment, prioritization, and coordination with the post-war civilian airport network to avoid a fragmented approach to recovery.
Given the possible conclusion of peace agreements and a ceasefire in 2025, the opening of some airports to civil aviation may become a reality. Priority will be given to Boryspil, Lviv, Kyiv (Zhuliany), and Odesa airports. At the same time, full recovery of the industry is impossible without a comprehensive vision of its role in the country’s new logistics system.
The infrastructure of many key airports is in critical or deteriorated condition and requires significant investment to improve. The reconstruction of runways and other infrastructure at other airports in Ukraine will require a more detailed study and prioritization of projects in accordance with the defined post-war civilian airport network.
The post-war model of aviation infrastructure can be based on the development of regional airports with cargo functions integrated into multimodal chains. The priority is to create logistics hubs with high cargo handling speeds, convenient access to road and rail infrastructure, and modern navigation and security systems.
Support tools
Suggested:
create a special fund within the state budget (for a period of 5 years after the end of the war) to finance the war:
restoration and development of airport infrastructure,
covering sustainable capital (CAPEX) and operational (OPEX) expenditures for operational airports;
develop a mechanism for compensating operating costs for selected regional airports (on a competitive basis) that are ready to accept civilian flights or create cargo services;
involve the private sector in the management of passenger and cargo terminals, in particular through concessions, management contracts, and public-private partnerships.
MULTIMODALITY
The development of modern logistics in Ukraine is impossible without a transition to multimodal solutions. This means integrating rail, water, road and air transport into a single transportation system with a focus on efficiency, environmental friendliness and business convenience.
Ukraine should synchronize infrastructure development with the requirements of TEN-T and the EU’s DG MOVE strategies, in particular in terms of:
development of domestic and border logistics hubs;
connecting ports, airports and railway junctions to the TEN-T network;
digitalization of logistics routes.
RDNA4 estimates the need to restore multimodal infrastructure at more than $3.6 billion, including hub stations, combined transport terminals, rail approaches to ports, and logistics centers. Some of these facilities are already included in the Ukraine Facility’s project portfolio.
Roads
Road transport remains critically important for internal mobility, humanitarian logistics, border crossing services, and connections to multimodal hubs.
Restoring the operation of the State Road Fund (SRF) and ensuring proper financing of road infrastructure are critically important for Ukraine.
According to the World Bank’s RDNA4 report, about $30 billion is needed to restore state roads over the next 10 years. An important part of this will be spent on restoring bridges and municipal roads.
Stable funding from the State Road Fund, which consists of the excise tax on fuel and other sources, will not only restore the existing road infrastructure but also maintain it in good condition, which, in turn, will stimulate economic development and improve the quality of transportation services in Ukraine.
The economic impact of road rehabilitation will be manifested in the creation of new jobs, attraction of private investment, and increased competitiveness of transport corridors. Improving the condition of roads and bridges will help reduce transportation costs, increase logistics efficiency, and facilitate market access for local producers.
Green transport and digitalization
New logistics should be energy efficient, digital, and transparent. It is suggested, if possible:
stimulate the use of electric traction, the purchase of zero-emission locomotives, and support for green port terminals;
to ensure the introduction of electronic consignment notes (e-CN) and unified digital solutions in customs clearance that are compatible with the EU;
use analytical platforms to manage cargo flows, monitor congestion, and optimize routes.
Particular attention should be paid to the deployment of digital services at border crossings, including automation of clearance and synchronization with data from foreign customs services.
CONCLUSIONS
A single strategy for recovery
Ukraine needs a consolidated, integrated strategy for the post-war reconstruction of its transportation and logistics infrastructure. Such a strategy should include:
railway infrastructure and interoperability projects;
restoration of ports, including the Danube cluster;
development of multimodal logistics hubs;
digital transformation of logistics;
rebuilding roads and bridges;
resuscitating the aviation industry as part of high-value cargo logistics.
This document should become not just a framework, but a practical tool for programming investments (including for the purposes of the Ukraine Facility), setting priorities for international partners, and synchronizing the actions of all levels of government.
The strategy should not focus on creating new institutions but on strengthening the capacity of existing structures to implement projects. The focus should be on:
transparent mechanisms for project selection and implementation;
reforming tariff policy;
deregulation and legal predictability for investors;
creating conditions for long-term attraction of private capital.
All infrastructure decisions should be made on the basis of an assessment of the economic potential of the regions, forecasted cargo flow, realistic models of operation and integration into European transport corridors.
Only such a holistic model will allow not only to restore what has been destroyed, but also to create a competitive, sustainable and strategically oriented new generation of logistics.
Maintaining and improving the efficiency of Ukraine’s transport system for international trade is vital in supporting the competitiveness of the country in global markets, especially since most of Ukraine’s exports are low-profit-margin commodities that are sensitive to transport costs. While the sector’s resilience has been remarkable in adapting to the challenges experienced since February 2022, the existing infrastructure is being stressed by these new trade dynamics for which the system was not initially designed to serve in full. Congestion at land border crossing points, downscaled operations at the ports, and a lack of specialized equipment, to name three factors, have driven up transport costs and reduced operational efficiency. Besides such current challenges, in the medium term, Ukraine’s reconstruction and economic recovery will require transport services and infrastructure that support its growth and competitiveness in the region and internationally. Responding to this context, the objective of this Report is twofold: to present the major developments in Ukraine’s transport sector for international trade since February 2022, elucidating how alterations in trade structure and the changing availability of road, rail and port infrastructure have affected freight volumes, how freight is moved, and the costs of moving it; and more forward-looking, to identify high-level strategic actions that can not only make the transport sector more efficient in responding to current trading challenges but also enhance its operational capacity in the medium term, based on expected developments in freight transport.
