The recent destruction of the Kakhovka dam in Ukraine has highlighted the environmental impact of Russia’s war in the country. As a response, Ukraine is focusing on attracting investments in low-carbon steel production and renewable energy, with the goal of becoming a global leader in these areas. The country’s rich natural resources, including iron ore basins, high wind speeds, and abundant sunshine, make it well-suited for these investments. Ukraine estimates that it would require $200 billion to achieve its low-carbon steel and renewable energy goals, in addition to the $14 billion needed for critical reconstruction this year. Despite the ongoing conflict, Ukraine has already secured commitments of half of the urgent reconstruction funds from domestic sources. BlackRock and JPMorgan are also assisting Ukraine in setting up a reconstruction bank to attract private investment. However, large-scale foreign investment in clean energy projects is expected to occur after the conflict has ended and security guarantees for Ukraine are in place. Furthermore, Ukraine believes that NATO membership will serve as the best security guarantee and “risk insurance” for attracting green funding. While some feasibility studies for investment projects are already underway, full-scale investments are more likely after the war and potential EU and NATO membership. Ukraine anticipates that confiscated Russian assets will be a major source of reconstruction funding in the future. Despite potential concerns of protectionism, Ukraine believes that “long-term wisdom” will prevail, and the EU will be won over by the country’s competitive and sustainable steel production.
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