Infrastructure Policy Review of Ukraine

Executive summary

Ukraine’s infrastructure faces the dual challenge of sustaining operations amid wartime disruption and preparing for reconstruction and modernisation. The fifth Rapid Damage and Needs Assessment (RDNA5), undertaken jointly by the World Bank Group, the Government of Ukraine, the European Commission, and the United Nations, with support from additional partners, estimates recovery and reconstruction needs at USD 587.7 billion over 2026-2035, equivalent to almost three times Ukraine’s 2025 GDP. Ukraine must determine how to meet investment needs, the role that private participation can have in addressing them, and how priorities are converted into implementable projects that are delivered with integrity and value for money and managed across the asset lifecycle.

Planning for delivery: Core functions of infrastructure governance 

Ukraine is moving from project accumulation towards a more disciplined and credible portfolio. According to RDNA5, 2026 recovery priorities comprise 195 projects and programmes drawn from the Single Project Pipeline (SPP). The SPP contains priority projects that have undergone formal appraisal procedures and were identified as eligible for budget financing by the Strategic or Local Investment Councils. The 44% reduction in the number of public investment projects and programmes compared with 2025 signals tighter oversight, more realistic planning horizons, and improved portfolio management, rather than a contraction of investment ambition. Continued progress will depend on strengthened readiness assessments and better co‑ordination across levels of government.

The 2025 reform package strengthens the link between strategic priorities, the project portfolio and the budget. Stronger Ministry of Finance gatekeeping helps ensure that projects competing for public resources are assessed against medium-term fiscal ceilings. Inclusion in the funded portfolio is increasingly conditional on readiness, credible costing and financing plans, with clearer sequencing between ongoing commitments and new starts. To further reinforce the effectiveness of reforms, Ukraine could:

• Improve readiness discipline at portfolio entry: require minimum proposal-related evidence, realistic cost ranges and clear responsibilities for entry and continued inclusion, supported by periodic portfolio correction.

• Standardise project preparation: apply proportional methods for feasibility, appraisal and independent challenge and build preparation capacity so readiness is comparable across sectors and levels of government.

• Rebalance lifecycle governance: strengthen asset-management evidence and integrate lifecycle costing and decommissioning into preparation and budgeting.

The Digital Restoration EcoSystem for Accountable Management (DREAM) is intended as the digital “spine” linking concepts, appraisal, procurement and monitoring. It is important that DREAM is operationalised as a common project data environment rather than treated only as a transparency or registry tool. Its value depends on mandatory data fields, persistent project identifiers, role‑based validation responsibilities and traceable links between project concepts, appraisal records, budget decisions, procurement notices, contract modifications, payment information and implementation monitoring. For DREAM to become an instrument for better infrastructure governance and project management that connects project-related processes and operations and improves decision making process, as well as traceability and transparency of project information, Ukraine could:

• Operationalise DREAM for accountability. Prioritise persistent identifiers, mandatory data standards, interoperability with budget/procurement/treasury processes, validation responsibilities and interoperability with budget, Prozorro, treasury/payment and construction-monitoring systems, supported by audit and control arrangements that ensure identified risks are acted upon and reporting that supports oversight and portfolio learning.

Application of OECD’s Infrastructure Governance Indicators (IGIs) benchmarking suggests relative strengths in formal appraisal and fiscal-control disciplines, with weaker performance downstream where projects meet markets and assets enter operation. The largest gap is evidence‑informed decision making for infrastructure management, implying that upstream gates are necessary but insufficient.

Procurement strategy remains a weak bridge between preparation and tendering. Where key pre‑tender decisions – including delivery model choice, contract packaging and allocation of exogenous risks – are not made explicit before tender, the system is exposed to thin competition, defensive pricing and higher likelihood of disputed. These risks are amplified under wartime volatility. To address the issues related to infrastructure project delivery, Ukraine could:

• Make procurement strategy mandatory for major works. Assign ownership for delivery model choice, packaging, market engagement and risk allocation before tender launch.

• Rebalance lifecycle governance. Strengthen asset-management evidence and integrate lifecycle costing and decommissioning into project preparation, budgeting, and procurement decision making.

Ukraine’s upstream public investment management reforms have created a credible architecture; the decisive test is whether project readiness discipline, procurement strategy and lifecycle evidence become operational, repeatable practice across the delivery system. To ensure that reforms create a lasting positive effect on infrastructure governance and project implementation, public sector capacity has to build up to match the reform ambition. The infrastructure governance aspects represent one of the key pillars to ensure success in terms of public or private investment into infrastructure. The other key pillar is the creation of enabling conditions for investment that can support investor confidence and mobilise domestic and foreign private finance towards infrastructure.

Enabling environment for private infrastructure investment and private sector participation

The enabling environment for infrastructure investment in Ukraine is shaped by the risks that war conditions present in terms of loss, damage or disappearance of tangible assets (hereafter referred to as war risk), challenges related to integrity and corporate governance of state‑owned enterprises (SOEs), and limited financial market opportunities. These factors hinder private sector participation in infrastructure, which remains very limited.

Despite modernisation of its public-private partnership (PPP) and concession frameworks (including as part of Ukraine’s public investment management reforms), and stronger project-level feasibility criteria, few PPP projects reach financial close. Institutional capacity constraints and wartime legal uncertainty remain material to further develop PPPs in Ukraine. Further efforts are also needed to improve the management of environmental and social risks throughout the infrastructure asset lifecycle and strengthen frameworks that can support sustainability-aligned investments. To address these challenges, Ukraine could:

• Ensure macroeconomic and debt sustainability, which should be safeguarded to build investor confidence around the country’s capacity to manage long-term liabilities.

• Consolidate enabling conditions for investment in infrastructure through land acquisition reforms, improved corporate governance of SOEs and reinforced anti-corruption and integrity safeguards to reduce risk to investors.

• Strengthen key components that support PPP bankability, notably: feasibility, quality, affordability and fiscal risk assessments, as well as adequate public-private risk allocation.

• Support financial market development. The financial market is not sufficiently developed to provide long-term infrastructure financing at scale, or issue investible capital market instruments. There is a need to develop financial instruments, such as guarantees, that can mitigate the risks that face private investors who are interested in seeking opportunities in the Ukrainian market.

• Improve the governance and commercial discipline of state‑owned banks, expand domestic banking sector project finance skills through partnerships and syndications with international banks, and advance capital market reforms to enable longer tenor instruments and asset-backed financing.

• Shift to routine climate risk assessments and strengthened environmental and social reporting aligned with EU standards to unlock sustainable financing and safeguard long-term asset performance.